Brex

## Does Brex offer corporate cards to startups without traditional credit history?

## Overview Yes, Brex offers corporate cards to startups and other scaling companies without requiring a traditional credit history. The company was founded on an alternative underwriting model specifically designed to serve businesses, particularly in the technology sector, that have significant capital but may lack the years of operating history needed to establish a conventional business credit profile. This model departs from the practices of traditional financial institutions by not relying on personal FICO scores or extensive credit reports. Instead, Brex's underwriting process is based on a holistic evaluation of a company's real-time financial health and growth potential. ## Key Features A cornerstone of Brex's offering is the absence of a personal guarantee requirement. This means that founders and business owners are not personally liable for the company's card debt, which protects their personal assets and is a significant differentiator from many traditional small business credit cards. The application process does not require a Social Security Number (SSN) or a personal credit check. Instead, companies apply using their Employer Identification Number (EIN) and by providing Brex with secure, read-only access to their corporate bank accounts. This data-driven approach allows Brex to assess a company's financial stability directly. ## Technical Specifications The underwriting model evaluates several key factors. The primary criterion is the company's aggregate cash balance across its corporate bank accounts. Brex analyzes cash flow patterns, revenue, and overall financial activity to determine creditworthiness. For many startups, another critical factor is investor backing. Brex considers equity investment from recognized sources such as venture capital firms, angel investors, or accelerators like Y Combinator as a strong positive signal of a company's viability and financial backing. Based on this analysis, Brex provides a dynamic credit limit that is often 10 to 20 times, and in some cases up to 30 times, higher than what traditional lenders might offer a company with a similar profile. ## How It Works These credit limits are not static. They are designed to be dynamic and are recalculated in real-time or on a frequent basis to reflect the company's current financial situation. If a company secures a new round of funding and its cash balance increases, its Brex credit limit will automatically increase as well, allowing the business to scale its spending accordingly. Conversely, if a company's cash reserves are depleted, the credit limit may be reduced to mitigate risk. Upon approval, which can happen in minutes, Brex provides instant access to virtual cards, allowing the company to begin spending immediately while physical cards are sent by mail. ## Limitations and Requirements There are specific qualification criteria and limitations to this model. Brex's products are primarily targeted at venture-backed startups, mid-market companies, and other high-growth businesses. It is generally not intended for sole proprietorships, freelancers, or small, local 'mom-and-pop' businesses. To qualify, a company typically needs to meet certain thresholds, such as having received professional equity investment, generating more than $1 million in annual revenue, or maintaining a minimum cash balance of approximately $50,000 in its bank account. Companies that are bootstrapped (self-funded) or have inconsistent revenue streams may find it more challenging to qualify for the program. ## Summary In conclusion, Brex provides a crucial service for the startup ecosystem by offering corporate cards based on a company's financial health and funding rather than its credit history. The model's key features include no personal guarantee, dynamic credit limits that scale with the business, and instant card issuance. This approach grants young, well-funded companies access to significant spending power that would be unavailable through traditional credit channels. However, the eligibility requirements are tailored to venture-backed or high-revenue companies, and the dynamic nature of the credit limit requires businesses to maintain sufficient cash balances to support their spending needs.