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Comment by fizx | Hacker News Reader

I ran a bootstrapped company with $150k/mo of well-documented, above-board recurring revenue and Chase wouldn't give it a credit limit above $5k.

Entrusting my finances to another startup like Brex is scary, but damn is the pitch compelling compared to mainstream banks.

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I think you could easily buy an hq (or any other relatively liquid asset that would also help the business in other ways) outright with that kind of money and use that to collateralize a much larger credit limit

GP said $150k in revenue, not profit. If their operating costs are $149k there isn’t much anyone can do without a loan or outside investment.

What's an hq?

Headquarters (real estate)

uh that’s not liquid

Real estate (especially smaller, less customized office space) is usually liquid enough to use as collateral for a loan

Wouldn't Chase be more interested in net profits and/or collateral?

Indeed, Tesla or Uber have revenues. But their bonds are still lower rated than Argentinian bonds. Can't expect creditors to like you if you're not showing excess cash flow.

Shareholders, on the other side, well. Let's just say that in the 60's or even 80's issuing IPOs was not something a professional investment bank would do. It was considered an undignified exploitation of the naive investor (from "The Intelligent Investor").

Why is it scary using Brex? In the end they are just providing credit, so the risk is on them.

Having your credit disappear overnight will disrupt your business.

Isn't Brex relying on Mastercard underneath?

They continuously track your financial data and sell it to VCs.

There must be something more to the story. I have several chase business cards that I use solely for points. I use "self employed" and 10k annual revenue from contracting as my business income. I don't have a limit below 15k.

No doubt. I ran a retail business that did 150k MRR and Chase gave us 30k and Amex gave us 100k.

It sounds like you had low (or likely negative) cashflow and no liquid assets. That's a very high-risk loan, and it's good that banks are averse to those.

It sounds like you were in a perfect position to raise a round without losing your control of the company. If you want a risky loan, you go to investors.

What did you ultimately end up doing for a line of credit for the business? That's obviously a very tight threshold of max credit to run a $1.8m sales business on. At the time did you consider trying to get a private line of credit (private as in from an individual)?

We ended up leaving a few hundred thousand in the bank and running it off debit.

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