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Brex’s new e-commerce card offers a 60-day, interest-free credit line, with limits ranging from tens of thousands to millions of dollars. Those limits will be three to five times higher than traditional corporate cards, CEO Henrique Dubugras says. And no matter what day of the month you make a purchase, you won’t have to pay it off for another 60 days. That means Brex is collecting money from its customers daily, instead of setting fixed due dates and requiring lump-sum payments.
Maha Ibrahim, a general partner at venture capital firm Canaan who invests in e-commerce startups, thinks traditional banks don’t serve these customers well. “E-commerce startups are growing too fast, outpacing the existing bank-related credit lines,” she says. If a company is expanding quickly, say from $5 million in revenue to $15 million the next year, it may have to re-architect its credit line. That process can take months with a bank, involving deep financial dives.
Brex evaluates applicants by linking to their bank accounts to monitor their cash balances and connecting to their payment-processing software, like Shopify, to gain a real-time view of revenue. For its startup-targeted card, cash was its most important underwriting factor. But for the e-commerce card, it will focus on revenue, since many e-commerce firms operate with little cash, Dubugras says. Historically, Brex has approved half of customers instantly, and the other half, within 24 hours.
Sorry this company could care less about start up small e-commerce companies. Were they not a start up once? Just disappointed and thought they’d do better
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What do we call the IT team of Brex? Brex-IT
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