Brex vs. Novo: A Banking Alternative Comparison Guide

Business banking can be a powerful solution to your business’ financial needs. In fact, you may be surprised just how much the right bank can transform the way you do business. 🙌 And with Brex no longer serving small and medium-sized businesses, many business owners are in need of a Brex alternative. Of the most popular digital banking options, Brex and Novo come to mind. 

In this article

• 🏦 What is Brex?

• 🏦 What is Novo?

• 🆚 Differences between Brex vs. Novo

  • 📋 Brex vs. Novo comparison chart

  • 🔐 Qualifying for an account

  • 💵 Business bank accounts

  • 💰 Cashback and rewards

  • 🗄 Accounts payable features

  • 🧑‍💼 Banking experience

• ⚖️ Which is better, Brex or Novo?

• Take control of your cash flow with Relay

For those that are looking for a new banking platform, you may be curious to learn the differences and similarities between Brex and Novo. So let’s go ahead and dive into the top differences between Brex vs. Novo and compare the key qualifications and features of each. 🔎

🏦 What is Brex?

Brex is an all-in-one financial management and banking platform that helps founders, finance teams, and employees spend smart and grow fast. Brex offers banking services, charge cards, capital and spend management features in one place.

Though Brex previously served businesses of all sizes, including SMBs, it announced that starting August 15, 2022, the company will no longer serve thousands of small business customers. This is part of a renewed focus on high-growth tech startups. 

If you still qualify, Brex’s charge cards and cash back rewards may be a good option for you. But for those that are affected by Brex news, now’s a great time to consider the financial services your business needs most and whether Brex meets those needs. 

🏦 What is Novo?

Novo is a financial technology company built for SMBs that are looking for better cash flow and budgeting transparency. It’s key to note that Novo is not technically a bank itself and banking functionalities are provided by Middlesex Federal Savings. With Novo, you can manage your business finances on the go by connecting to a suite of integrations, sending invoices and paying vendors.

Freelancers, startup founders and small business owners can open a business checking account securely and easily online. You do not need to maintain a minimum balance to hold an account, though a $50 deposit is required to get started. 

Novo offers an invoice creation feature, making it a great option for service-based SMBs. Additional perks include refunds on all ATM fees, plus discounts on Quickbooks Online, Hubspot and Zendesk.

🆚 Differences between Brex vs. Novo 

When it comes to Brex vs. Novo, there are a few distinct differences between the two. The biggest difference is that Brex serves tech and venture capital startups, whereas Novo serves SMBs with an emphasis on sole proprietors.

📋 Brex vs. Novo comparison chart

Take a look at the below comparison chart to understand the main differences between the two, like pricing, bookkeeping and business credit cards. 

Not the perfect fit? Check out Relay, rated 4.5 on Trustpilot! Learn more about how Relay compares vs Brex here.

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🔐 Qualifying for an account

Since Brex recently announced that they will no longer serve small businesses, qualifying for an account is very different between Brex and Novo. 

According to Brex, here are the qualifications to be eligible to use their banking services:

• You have received an equity investment of any amount (accelerator, angel, VC or web3 token)

• You have more than $1 million a year in revenue

• You have more than 50 employees

• You have more than $500k in cash

• You’re a tech startup on a path to meeting the criteria above and are referred by an existing customer or partner

In comparison, Novo doesn't have nearly as many stipulations to qualify for an account. Since Novo accepts all SMBs, most businesses should qualify. Opening a checking account with Novo is a fairly simple process. All you have to do is fill out an online application form. 

💵 Business bank accounts

While both Brex and Novo offer free banking with no monthly maintenance fees, they differ in the amount of free checking accounts offered. With a Brex Cash account, you get up to 8 checking accounts per venture-backed startup, each with unique account and routing numbers. 

With Novo, you get 1 checking account and 5 envelopes. While using digital envelopes is great for categorizing your expenses, they don’t offer the full benefits of separate checking accounts. That said, 1 Novo account and multiple envelopes should suffice for small businesses with simple finances.

💰 Cashback and rewards

When it comes to perks, both Novo and Brex offer unique advantages. 

Brex offers businesses cash back and rewards options on charge cards. Brex’s rewards program includes discounts on business apps and supplies, as well as cash back and travel points. To get the best rewards with Brex, businesses need to prove card exclusivity, otherwise, cash back rewards are greatly diminished.

Novo, on the other hand, doesn’t offer charge cards which means they don’t offer cash back perks. But they do offer their own unique perks, like discounts on Quickbooks Online, Hubspot, Stripe and more. This means more cash savings for you. 

🗄 Accounts payable features

Brex focuses on streamlining expense management for large organizations with many team members. This means there's less focus on managing cash flow. Startups can create expense policies for employees, and employees can request the ability to make purchases using API access, increase limits or get vendor-specific cards. While Brex does not directly pull unpaid invoices from your accounting system, like Xero or QuickBooks Online, businesses can send their unpaid invoices to Brex by email.

With Novo, you can create and send invoices to customers for ACH, Stripe, PayPal and Square payments. But this is where the capabilities end. While you can send invoices, Novo doesn’t allow bills or invoices to be imported for payment. 

🧑‍💼 Banking experience

It’s a good idea to weigh the differences in small business banking experience before making a decision. While both Brex and Novo are digital banks, the experiences are different. 

Since Brex is designed for large fintech startups, the experience is better suited for large teams with complicated finances. On the other hand, Novo is a better experience for small businesses that have simple finance needs. Novo’s mobile app makes it easy for business owners to carry out simple transactions like check deposits, payments, transfers and wires. 

⚖️ Which is better, Brex or Novo?

It’s time for the million dollar question: which is better, Brex or Novo? The answer to that question largely depends on the size and complexity of your business. 

If you’re a large venture-backed tech startup with multiple different teams and business expenses, then Brex might be better suited for you. But if you’re a small business that needs basic cash flow organization and easy-to-use integrations, then Novo might be a better option. 

And for those that need more advanced cash flow services, consider an online banking and money management platform like Relay. Relay makes it easy to control your cash flow and understand precisely what you’re earning, spending and saving so you can make the smartest decisions for your business. 

Take control of your cash flow with Relay

Relay puts you in control of your finances. Collect income in one place, use up to 20 checking accounts to organize expenses and categorize payments for a crystal-clear picture of your cash flow.

Relay goes beyond the everyday banking basics with:

• ✅No account fees, overdraft fees or minimum balances

• ✅Up to 20 individual checking accounts

• ✅50 virtual or physical Mastercard® debit cards

• ✅Payments and deposits via ACH, wire and check

• ✅Deposits from payment processing providers like PayPal, Stripe and Square 

• ✅Direct integrations with accounting software like QuickBooks Online and Xero

If you’re looking for an online banking solution that puts you in control of your cash flow, check out Relay—you can sign up here!