Where to Turn Now That Brex Left Small Business

Where to Turn Now That Brex Left Small Business

Where to Turn Now That Brex Left Small Business

Brex created a gap when it left the small business market last month. The company announced that tens of thousands of its small business clients would need to find financial services elsewhere. With Brex leaving SMB customers, many small businesses were left looking for an alternative for their business funding and bank account needs.

In this article, learn what happened with Brex, who was most affected, and the best business financing options for small business owners who had to leave Brex.

What’s Going On With Brex?

Brex is a lender to many startups in Silicon Valley that started pursuing the traditional small business market in 2019. However, due to factors like the current rough economy brought about by the pandemic and complications within the company, Brex decided to drop tens of thousands of SMB customers

Brex’s founder said the company’s new goal was to focus on its original customers that were backed by venture capital — and that the affected small business owners needed to withdraw their funds from their accounts and find a new provider. This announcement surprised many Brex customers who relied on the company for its business bank account and credit card.

How the Brex Situation Played Out

In 2019, Brex decided it wanted to expand from its original startup customer base into supporting traditional small businesses. But it soon realized that it had taken on too much. As Brex co-CEO Henrique Dubugras told Protocol in June, “By the end of 2021, it got to a point where we started questioning: What do we do from here? Do we sacrifice experience for our core customer? Do we allow our best customers to leave because we’re not serving their needs?” 

The main issue, according to Dubugras, was that startups and small businesses have very different needs. Startups could receive a hands-on, white glove service but there were too many small businesses for it to be economical for the company to offer the same personal touch. Thus, the onboarding process for small businesses needed to be highly automated in a way that Brex couldn’t handle. Brex decided that serving two distinct markets was not working and it would drop its small business clientele.

However, Brex created confusion in the way that it notified customers. The notice for account closure was supposed to go only to small business clients, but Protocol found that some startups also received the notice. “Did we misclassify any company? Probably,” Dubugras said in the same interview. “It’s a lot of customers. We’re not perfect.” He said he would have been more clear about the difference between small businesses and startups if he could re-do the notice. 

Mom and pop shops and other small businesses were told they had to remove their funds from their accounts by mid-August of 2022.

Which Small Businesses Were Affected?

The small businesses that could no longer remain a Brex customer included most:

  • Restaurants
  • Retail shops
  • Bakeries
  • Florists
  • Hairdressers
  • Small design firms

Small businesses make up the majority of the U.S. economy but were left unsupported by Brex. If you were a former Brex customer and are still looking for a good replacement for business credit cards or small business loans, Nav has your back. Use Nav to get personalized loan recommendations.

Who Could Remain a Brex Customer?

Some small business owners could stay at Brex if they met one of the following criteria:

  • Received any amount in an equity investment
  • Made over $1 million in annual revenue
  • Employed more than 50 people
  • Had over $500,000 in cash
  • Were a tech startup that is close to meeting these requirements and an existing customer or partner could refer them

If a Brex small business customer couldn’t meet any of these eligibility criteria, they had to find another small business credit card or bank account.

Top Brex Alternatives 

Here are some great options if you’re looking for a business card that can compete with your former Brex Card. 

Revenued Business Card

The Revenued Business Card works more like a merchant cash advance than a credit card because its interest charged is factor based. Your creditworthiness matters less than factors like business revenue when applying. You can earn a great welcome offer: N/A. Earn 3% cash back on every single purchase. Domestic use only

The is a charge card that has a annual fee. so there’s no interest paid. You may help build your credit by using this card and making on-time payments. The foreign transaction fee is .

The is a charge card that offers rewards. There’s a annual fee as well. You’ll pay a foreign transaction fee to use this card abroad: .

Capital One Spark Cash Select for Excellent Credit

The Capital One Spark Cash Select for Excellent Credit is a business credit card that charges a $0 annual fee and has a great welcome offer: $750 Cash Back once you spend $6,000 on purchases within the first 3 months from account opening. Its rewards program lets you earn 1.5% Cash Back on every purchase and 5% Cash Back on hotels and rental cars booked through Capital One Travel. The purchase APR is between 18.49% - 24.49% (Variable).

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