There’s an assortment of choices for small business banking, so it’s important to sort through your options and see what works best for your business and the stage it’s in — in addition to the future you’re looking to create. Brex Cash is a fintech company that offers an alternative to banking and is more like a cash management account set up to take deposits, payments, and track expenses. 

What Is Brex Cash Management?

Brex Cash Management allows small businesses to control their cash flow more effectively. Their goal is to focus on the new generation of small business owners and the core of how they do business in a virtual world. It is a financial management platform that helps businesses:

• Track expenses
• Integrate software including Quickbooks and Xero
• Earn rewards through their Brex account
• Build business credit through the Brex Mastercard
• Pay bills automatically (schedule payments, forward invoices, etc.)

There’s no actual physical locations, like banks. So, everything is done digitally.

How Brex Cash Works

Brex Cash is a cash management account provided by Brex Treasury LLC. In the simplest terms, you can envision Brex as banking in the cloud. 

The Brex Cash account offers two ways for small business owners to store funds. The first option was previously through LendingClub Bank and is currently in the stages of migrating to JP Morgan Chase. Your funds are stored and uninvested in Brex’s program bank, which is FDIC-insured up to $250,000. The second option allows you to invest your funds in the Dreyfus Government Cash Management Fund — a money market fund that allows entrepreneurs to earn yield. 

Brex Cash also allows business owners to choose between two ways of how their money is stored. If you opt to keep your deposits at a Brex partner bank, you’ll be eligible for FDIC insurance up to $1.75 million. You can also invest your deposits into a government money market mutual fund, or do both.

Can Brex Be Used as a Bank Account?

Brex was not created as a bank account, so it won’t come with all of the features of a typical business checking account. However, it does come with a routing and an account number, specific to your account. This allows for ACH, deposits, withdrawals, and transactions that are related to a traditional banking account.

It functions similarly to a bank account with a focus on cash and expense management that’s completely digital. Brex offers a business credit card that functions like a debit card, but reports to the business credit bureaus. The credit card offers 10-20 times the credit limit of traditional cards, without the need of a personal guarantee. This means that their focus is more than just storing money, but actually helping businesses achieve financial goals that will also give them the access to capital they’ll need for the business. 

With the many integrations, you must also link your actual bank account so that Brex can see your cash balance to adjust your credit limit. Unlike traditional bank accounts, spending habits can be a huge factor in creating more accessibility to accessing a direct connection to your businesses credit.

Fees and Terms of Brex Cash Accounts

One of the biggest benefits of having a Brex Cash Account is that there are no costs associated with it. This can be extremely beneficial for startups and small businesses that are just getting started and don’t have access to extra methods of funding to store and manage their money like the business banking structure.

Brex is a free account and does not charge fees for:

• Opening an account
• ACH (international and domestic)
• Sending and receiving checks
• Wires (international and domestic)
• Account maintenance fees

As of April 1, 2022, through the money market fund, your account earns yield on an annual basis and may fluctuate as market conditions change. 

Pros and Cons of Brex Cash

With everything, there are pros and cons. For business owners who need a standard business checking account that offers in-person services and ATM access, what Brex offers may not fit in your current scope of business needs. However, if your business requires a more digital, online experience where you can enjoy the convenience and perks of working solely online, Brex may have exactly what you need.

Brex Cash Rewards

One of the benefits that small businesses making daily payments can expect is through the Brex Card. Brex offers point multipliers based on the merchant category of the transaction: 1x equals one point earned for every dollar spent:

• 8x on rideshare (e.g. Uber, Lyft, Taxi)
• 5x on travel booked via Brex Travel
• 4x on restaurants
• 3x on eligible Apple purchases through the Brex Rewards portal
• 1.5x on ads
• 1x on everything else

There are also specific benefits for tech-based or life-science businesses.

Tech Rewards

• 8x on rideshare
• 5x on travel booked via Brex Travel
• 4x on restaurants
• 3x on eligible Apple purchases through the Rewards portal
• 3x on recurring software
• 1x on everything else

Life-science Rewards

• 8x on life science conference tickets
• 5x on travel booked via Brex Travel
• 3x on eligible Apple purchases through the Brex rewards portal
• 2x on lab supplies
• 1x on everything else

Brex points are also uncapped and never expire. Brex rewards points balance can be found under “Rewards,” located on the left-hand side of the Brex dashboard. Admins can use this feature to check their company’s current rewards status. 

Who Brex Cash Is Best For

Brex Cash is best for small business owners and startups that:

• Are C-corps, S-corps, or LLCs
• Like to manage their finances online
• Don’t need to deposit cash or withdraw cash from an ATM or physical location
• Want unlimited transactions with their free cash management account
• Businesses who want to build business credit

If your business is primarily functional through the use of financial platforms that are strictly online, Brex is a great option. Some examples of businesses that may benefit from using Brex Cash Management are:

• Businesses that use technology, primarily
• Restaurants that sell through delivery apps
• Ecommerce businesses
• Startups looking to build business credit

Ecommerce businesses whose core traffic is online customers, signing up for Brex Cash gives instant payouts. This removes having to wait 10 – 14 business days like Amazon sellers and will allow you to receive payment within seconds. In order for you to qualify for instant payouts, you must have proof of an operating history of one month and $500 in monthly net sales volume, minimum. 

If you enjoy a good rewards program, instant payouts, boosting your credit score, and not having the hassle of having a physical charge card, Brex.com can point you in the right direction. In addition, if your business requires a lot of travel, Brex is set up for that. Brex travel helps businesses use rewards towards flights and hotel stays.

How to Open a Brex Business Account

Opening a Brex Business account is pretty simple. You have to create an online account and fill out an application on the Brex website. However, unlike traditional banks, the only businesses that are currently eligible to apply for a Brex Cash account are incorporated businesses — which include C-corps, S-corps, LLCs, LLPs — registered in the United States.

Brex uses the information to analyze your company’s spending patterns, source of funds, business model, and any area that could potentially pose a risk to them and their partners. So, although you may meet the requirements, this does not guarantee approval.

What It Takes to Qualify for a Brex Cash Account

Brex does have an application process in order for businesses to get an account.

To qualify for a Brex Cash Account, you need:

• Identification that is currently active. They accept passports, state IDs, and driver’s licenses. 
• Be incorporated in the United States. 
• Have a US Employer Identification Number (EIN). 
• Operate in the U.S. 
• Provide or have plans to provide services and products to U.S. customers 
• Employ/contract (or have plans to employ/contract) U.S. personnel

It can take up to 15 business days for Brex to review your application. There can also be some instances where your application will be approved, but Brex will still require additional information. You can check your application status by signing in to the Brex dashboard at any time.

Bottom Line

Brex Cash offers great features that are beneficial to small business owners who are interested in alternatives to traditional banking and require a tool to help monitor cash flow transactions like deposits, payments, and expenses.