The startup’s guide to modern banking.
- Choosing the right financial partner is critical for startups.
- Why isn’t startup banking better?
- Where do most startup banking services fall short?
- Why startups need modern banking solutions more than ever.
- What a modern startup banking solution looks like.
- The benefits of Brex business account banking solutions for startups.
- Launch confidently and scale quickly with modern banking solutions.
Choosing the right financial partner is critical for startups.
Cash is king for any business, but it’s especially true for a startup. It’s the fuel that helps transform your idea into a sustainable, mission-driven business.
But according to CB Insights, 38% of failed startups fail because they run out of cash. And for the startups that do gain traction, it takes four years for them to become profitable. With cash being one of the most critical factors for startup success, effectively managing the money you have separates the winners from the also-rans.
So how can founders optimize cash flow, maximize working capital, and make every dollar count? It starts with choosing the right banking partner.
This sounds simple, but it's not. New fintechs offer confusing and potentially risky options, while legacy banks rebrand themselves as modern without investing in capabilities that support modern companies. Further, basic deposit accounts and payments are table stakes. The right banking partner also helps grow your cash faster, unlock high-limit corporate cards, and accelerate your growth with financial solutions that scale as you scale.
And more owners and operators are taking notice. Forrester Research says two-thirds of US small-business owners are willing to try modern fintech services, with the most enthusiasm for more accessible payment, deposit, card, and lending products that traditional banks don’t offer.
This book will help you identify the best banking solutions for startups by examining where other approaches break down—from hidden fees and poor yields to slow processes and limited growth tools. You'll leave with the blueprint for a modern banking solution that maximizes your cash, minimizes fees, and streamlines operations so you can focus on the important work of growing your startup.
“Our Brex business account allows us to generate yield on our cash through a money market fund while seamlessly processing wires and ACH transactions. It's the best of both worlds.”
— John Melas-Kyriazi, Co-Founder & CEO, Standard Metrics
Why isn’t startup banking better?
Today’s startups need quick access to flexible bank accounts, high credit limits, 24/7 global service, and faster payment services from a provider they can trust. Most banks, however, fail to deliver such services.
A recent McKinsey survey says that the best banking partners for startups and small businesses tailor their products and services to these clients. The survey says providers will specifically win over founders and finance teams if they can offer:
End-to-end cash flow solutions
Consolidated payment products with lower costs
Integrated enablement tools like payroll and accounting
Ultimately, startups want their bank to be more than just a parking lot for their cash. Banking solutions needs to grow and activate that cash, but other approaches have thus far let down modern startups:
Traditional banks stuck with decades-old technology struggle to offer the flexible, digital, and global financial tools today’s startups need to grow.
Modern neobanks offer more digital tooling and decent interest rates, but they often lack global reach, flexible treasury options, and integrated bill pay services.
Bank partners like Silicon Valley Bank (SVB) and First Republic Bank brought startup banking into focus, but their failures stoked distrust and left founders looking for safer alternatives.
When demands are not being met, the market is ripe for innovation. Startups and other high-growth businesses are already benefiting from fresh approaches to banking solutions with innovative financial partners like Brex.
Brex serves one in three startups with financial services and software that enable them to grow. We recognize the crucial role that modern banking solutions play in helping founders manage their cash, extend their runway, and secure capital, and we’re continuing to reimagine what startup banking could be.
Brex took the best things about banking, savings, and treasury and combined them in one powerful account to unlock new financial flexibility and security for startups and other high-growth businesses. See why this approach is unique in the market and how it can help any business take every dollar further.
“Having the Brex business account set up during the SVB crisis was a huge asset. We were able to diversify our institutional risk by having another account where we can send money that offered up to $6M in FDIC insurance.”
— Jake Disraeli, co-founder and CEO at Treet*
Where do most startup banking services fall short?
A basic service such as banking has somehow become an obstacle for startup and early-stage businesses.
Founders want to jumpstart their operations, but slow account opening processes, delays in obtaining an EIN from the IRS, and “banker’s hours” delay access and stall progress. Additionally, traditional underwriting processes prevent founders, especially international ones with no personal credit history, from getting adequate credit limits without a personal guarantee. Founders need a partner that’s ready to support their vision immediately.
Commercial banking built on legacy infrastructure and processes set those precedents, but even the neobanks fall short. Neobanks helped raise the bar on digital accessibility but still require you to track money on multiple platforms, require hidden minimums, subject you to long waiting periods, charge high fees for treasury products, and limit visibility into where funds are held.
The costs for startups using these services add up through:
High fees. Most banks charge fees for money-moving services like wire transfers, ACH payments, or international wires. You may also have to maintain high minimum balances or pay monthly fees to unlock value-added services and better support, unlike solutions offering perks like free same-day ACH.
Low yield. The interest rates on your parked cash are minimal.
Confusing yields. And when higher yields are available, they often come with strings attached, like high minimums, poor liquidity, or riskier investment vehicles disguised as simple savings.
Liquidity issues. Long withdrawal and transfer waits can jeopardize daily operations and hinder potential growth opportunities.
Slow payments. Time-consuming ACH transfers, wires, and paper checks can lead to late vendor payments, impacting supplier relationships.
Minimum FDIC protection. Most banks offer up to $250,000 of FDIC insurance on deposits, but startups coming off a fresh raise will need to protect larger balances.
Poor service. Cumbersome application processes, paper-based workflows, and long support wait times — commercial banks were not designed to support scrappy, high-growth businesses. Even “founder-friendly” neobanks do not provide 24/7 global support.
Lack of innovation. Legacy banks often rely on expensive middleware to piece together new services. Modern banking solutions embrace integrations and APIs that enable fast, automated financial services and provide a frictionless user experience.
Perhaps the biggest shortcoming of traditional and neobanks, however, is that their banking services are rarely built to work with other financial software and systems.
This makes basic business operations slower and more complex. Key processes take longer and have a higher margin of error when multiple systems are involved, whether you're paying vendors, trying to earn interest, or running payroll.
For example: You have a business checking account with Bank of America or Wells Fargo. But to activate that money behind simple withdrawals and transfers, you typically need other software — like Bill.com for bill pay, Kyriba for liquidation, Rippling for payroll. Then your card program may be Amex or Chase because they gave you a higher credit limit, so you’ll need another solution to automate the management of those card expenses and sync them to your ERP.
This creates a complicated network of money movement that puts you at risk of missing payroll, delays in paying vendors, or racking up interest charges due to late card payments.
"Brex has the best business banking account. We can move so much faster with one seamless solution for banking, invoicing, expenses, and AP from Brex.”
– Monica Nagano-Young, Senior Project Manager, Operations, Rechat
Why startups need modern banking solutions more than ever.
Gone are the days of growth at all costs. The new business mandate is profitability — and getting there faster. But founders and finance teams are struggling to balance costs with growth especially as the cost of working capital increases.
With high interest rates, expensive lines of credit, and venture funding slowing, the cost of capital is greater than ever. Cash is once again king, and it’s critical to give it the royal treatment so you can continue to scale.
Finance teams looking to manage burn may opt to shrink teams or cut tooling and do more with less. But one area they can unlock valuable efficiencies is within their banking partnerships. Does your current banking partner help you:
Protect more of your cash?
Maximize yields on that cash?
Access 100% of your cash at any time?
Increase spending power and extend working capital?
Make fast payments with no hidden fees?
The best startup banking solutions are purpose-built to optimize cash flow, extend working capital, and provide financial agility for growth-minded companies. Here’s how Brex designed the ideal financial stack.
“The biggest problem that Brex solves for me is I know where our money is at all times. I know money going out. I know money coming in. I know who transacted with which card. Having a fast and easy way to move and track money is so important since that's really the last thing I want to think about.”
— Lydia Han, CEO & Co-Founder, ModernLoop
What a modern startup banking solution looks like.
If you built your dream financial stack, it wouldn't be a patchwork of disjointed accounts across several banks, multiple corporate card programs, and complicated investment funds to earn yield.
It would be much simpler, cleaner, and integrated. It would start with a bank account built to perfectly integrate with your corporate card, bill pay, and expense management solutions on a single, global platform. That’s what Brex does.
Brex is building better banking and payment products for startups and growth-stage companies. The core tenets — a simpler and more flexible experience that gives you better ways to manage cash, earn yield, and maximize your working capital.
To do this, the Brex business account combines the best parts of banking and treasury via three customizable services:
Checking, a demand deposit account* used for payments, payroll, and transfers.
Treasury, a money market fund used for generating yield.
Vault, an FDIC sweep program used to securely store your cash with program banks.
They are intentionally built to be stronger together to increase your working capital (without the need for working capital loans), save time, reduce friction, and scale more efficiently. It’s banking solutions that banks wish they could offer.
The benefits of Brex business account banking solutions for startups.
With this innovative banking solutions approach, startups can balance returns, security, and liquidity with one account and gain:
Higher returns. Grow your cash with industry-leading money market fund returns invested in government-backed securities.
Same-hour liquidity. Access your cash faster with our direct treasury integration.
Fee-free bill pay. Pay vendors on time, build supplier trust, and get more convenient payment options for domestic and international transactions, including free same-day ACH.
Integrated invoicing. Invoice customers right from Brex and get paid 1-3 days faster.
More spending power. Unlock 10-20x higher limits on a Brex card.
Improved cash management. Optimize cash flow and maintain liquidity with no account minimums, automated sweeps, and virtual cards.
More FDIC protection. Stay protected with up to $6M in FDIC insurance that diversifies your institutional risk across 20+ program banks.
Business transparency. Improve visibility into your company’s finances and automate manual processes.
Brex business account banking solutions also integrate with popular accounting software like QuickBooks Online, simplifying data accuracy, improving visibility and reporting, and automating accounting workflows.
“How do you create the best banking for startups and in a way that is seamless and easy to use across the board? I do believe that Brex is one of the only solutions out there focusing on solving the problem in its entirety.”
— Richard Mensah, Founder & CEO, Salley
5 ways to optimize cash management with Brex
With Brex, banking is just the start. Brex business account banking solutions are part of a complete, scalable financial stack for startups, so you can optimize cash and extend working capital in key ways beyond just banking:
Earn industry-leading yield while staying liquid
Get 40x credit limits by pairing Brex business account and Brex corporate card
Earn cash back on all vendor spend with bill pay by card
Unlock operational and cost efficiencies with a streamlined financial stack
Use automations and integrations to manage operational cash and pay vendors faster
Launch confidently and scale quickly with modern banking solutions.
No other financial partner offers modern full-stack banking solutions like Brex. This powerful integration of financial services and software finally delivers the banking solutions fast-moving startups require.
See why one in three startups trust Brex for banking, corporate cards, reimbursements, bill pay, travel, and expense management. Discover the value of a financial partner that can scale to support you from MVP to IPO and beyond.
Securities are offered through Brex Treasury LLC. Funds in Treasury are not FDIC-insured. Funds in Vault at program banks are eligible for FDIC insurance. Funds are not FDIC-insured until they arrive at program banks. Conditions apply. Investing in securities involves risk and loss of money. Yield and return are variable and fluctuate. Past performance is not a guarantee of future results. This is not an offer to, or implied offer, or a solicitation to, buy or sell any securities. Brex Treasury LLC does not provide legal, tax, or investment advice.