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3 Reasons You Need a Brex Alternative

Reviewed by Ty Crandall

November 14, 2023


Brex alternative Credit Suite

Brex is a fee free banking alternative for businesses. They offer many services, but the big draw for startups and small businesses is the option for a business credit card that reports to Experian and Dun & Bradstreet, thus helping them build a strong business credit score. It’s not enough though. You need a Brex alternative.

You Need More Than One Brex Alternative to Get Everything You Need for Your Business

First, I highly recommend Brex for a number of things.  Yet, while Brex does offer a lot of great options for businesses, it really can’t be an all in one solution.  For many reasons, including building business credit, you are going to need a Brex alternative.  Actually, you are going to need a few of them.

Using Brex to Build Business Credit

While Brex is a fabulous option for managing business finances, it doesn’t really work for business funding when it comes to startups.  Here’s why. The corporate credit card that most startups qualify for only has a limit up to the amount of cash you have in your Brex cash account.

Now, that’s not a bad thing for managing financing or building business credit. There are no fees, and there is no personal guarantee required.  Your on-time payments are reported to two of the big three business credit reporting agencies. It’s a pretty sweet deal.

However, you are only able to use up to the amount of money you already have. Payment is taken from your cash account daily, and you cannot carry a balance. This means that, while this card is a great tool for helping you build business credit and managing funds you already have, it doesn’t actually help you get additional funds for your business.

Furthermore, one account reporting is not enough to effectively build business credit.  You need to find a Brex alternative, really a few, to do that.

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Brex Benefits

That’s not to say that you shouldn’t use Brex at all.  It is a useful tool, and actually has many benefits aside from helping you build business credit for your business.  It can definitely help you manage your cash flow. It’s also a great way to help keep your business expenses separate from your personal expenses.

The card also offers a pretty great rewards program. You can earn points at various levels depending on the type of purchase. Points can be redeemed for cash, statement credit, gift cards, and most recently, crypto!

Brex Drawbacks

With the standard Brex corporate card, you only have access to the amount of money you already have in your cash accounts.  What if you need more? There is the possibility of qualifying for a card that works more like a regular credit card.  The limit can be from 10 to 20 times higher than traditional cards.  You have the option to pay it monthly rather than daily, and you can pay from the account of your choice.

The thing is, not everyone qualifies for this card.  Qualification is based on a number of factors, including investors, cash balance, and spending habits.  Brex then sets the limits accordingly.  This isn’t bad in and of itself, as it’s a chance to get a credit card without a credit check, and it reports to Experian and Dun & Bradstreet.

However, you still cannot carry a balance, and again, one card is simply not enough to build strong business credit.

Why You Need a Brex Alternative

If Brex is so great, why would you ever need a Brex alternative?

# 1: You Need Actual Financing

Other than the one step up card where you have the possibility of a higher credit limit, there is no real financing available through Brex. Even if you get the higher limit card, it isn’t revolving credit. It’s more like net 30 credit, as the balance has to be paid at the end of the 30-day billing cycle.

If you need actual financing like a revolving line of credit, you are going to have to find a Brex alternative. Of course, finding financing that is as easy to qualify for as Brex is not easy.

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

#2: You Need More than Brex Reporting to Your Business Credit Profile

If building business credit is your goal, and it should be, Brex is not enough.  The business credit building process has many steps.  These steps must be completed in order, and the first one after establishing a business credit profile for accounts to report to, is to get accounts that will report.  Brex is one.  You need a lot more than that to build a strong business credit score.

#3: You Need More Funding Than Brex Offers

Even if you get the higher limit card option from Brex right away, one card will likely not be enough. Besides not being enough on its own to build business credit, you may very well need more funding than that to run your business.  It depends, of course, on the limit they set based on the specific qualifications of your business.  Even if the limit is fairly high, you need more than one business credit card to build a well-rounded business credit portfolio.

Is There a Brex Alternative?

A Brex alternative is not necessarily to be used instead of Brex, but rather as an additional tool for your tool box to be used in conjunction with Brex.  Here are a few other tools for your tool box.

Credit Line Hybrid

Brex alternative Credit SuiteThis is a unique and powerful business funding tool that, like Brex, can also help you build your business credit because it reports on-time payments to your business credit profile. Unlike Brex however, the Credit Line Hybrid works as an actual, revolving credit line up to $150,000.

You do not have to submit any documents, and you can get an interest rate as low at 0% initially. You can get approved with a personal credit score of 700 or better, or like many other businesses, you can use a credit partner with a high enough score to qualify if you do not. The credit is still in your business name, so you will still be building credit for your business.

401K Financing

This is another powerful funding tool that few business owners know anything about.  It is a way of funding your business that uses funds from a 401K, but it is not the same as a loan from your retirement account.

In fact, with 401K financing, called a ROBS by the IRS, you can fund your business and still keep earning interest on your investments. A qualifying account will have at least $35,000 in it, and you cannot still be contributing. It also needs to be from a previous employer, not your current employer.

Starter Vendors

How about a Brex alternative for building business credit? If one account is not enough, how do you get more? How many more do you need? You need 5 to 8 accounts initially reporting to be able to qualify for most business credit cards. These have to be accounts that will both extend credit without a credit check, and that will report those payments to the business credit reporting agencies, just like Brex does.

The issue with that is, only 7% of companies that extend credit to businesses report payments. They may report missed payments, but that doesn’t help. There are some vendors however, that will do just that. We call them starter vendors.

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

They will issue net terms on invoices without a credit check and report payments.  They use other factors to determine creditworthiness, like time in business, balance in business bank accounts, and more. Sometimes, they will require a few initial purchases before approving for net 30 terms.

These types of accounts, combined with Brex, can help you build strong enough business credit that, eventually, you will be able to qualify for any business credit card out there.  Then, you can be sure you always have the funding you need to run your business.

Brex Is Great, But You May Still Need a Brex Alternative

While Brex can work very well as a business money management tool, it’s not really intended to be a funding source.  Furthermore, even though it can be a wonderful addition to your toolbox for building business credit, it is not possible to build business credit with just one account reporting. You would never try to build a house with just a hammer or just a screwdriver. It takes a toolbox full of tools. That’s what Brex is. It is one very useful, multipurpose tool in the toolbox to help you build business credit, which is the foundation for a strong, well-rounded business credit portfolio.

About the author 

Faith Stewart

Faith has a BBA with a major in Accounting, and a combined 20 years of experience in the fields of finance and account.

Before switching to writing, she spent 10 years working in various areas of small business and personal finance and accounting, including working as a public auditor at BKD, LLP, Financial Director at Central Arkansas Development Council, and Commercial Credit Analyst at Farmer's Bank and Trust.

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