Brex targets start-up loan market with new $150 million debt service
Summary
While several lenders have historically offered loan services to start-ups, Brex is looking to take advantage of the increase in venture debt financing with a $150 million fund. The newly launched Brex Venture Debt will look to compete with the likes of Silicon Valley Bank, American Express and Bank of America Corp. to offer early stage venture-backed businesses an alternative financing option. While its main product – an unsecured, high-limit charge card for start-ups – exposes it to money-losing companies that could fail in droves, the company manages risk by using real-time data on customers to help make dynamic lending decisions. Henrique Dubugras, co-CEO and co-founder of Brex, said on CNBCs "TechCheck" on Wednesday that this additional loan service with Brex Venture Debt will give business owners the capital needed to expand their business. Compared to traditional banking, Dubugras said Brexs loan services will not have "shady terms," and it will actually work to grow their customers businesses.
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