A Connecticut digital bank launched a credit card last week to bridge the financing gap for small businesses.
The new business credit card at Owners Bank, the small business-focused fintech arm of Liberty Bank, offers a competitive interest rate and a rewards program, which gives 10,000 points for the first $1,000 spent that can be used toward cash back, gift cards, and merchandise.
The card allows a business to delegate portions of their credit limit – up to $50,000 – to as many as six employees, ensuring that they have the credit necessary to pay for business expenses like gas and related tools.
“We believe business credit cards are a necessity for maintaining and growing a business of any size. We were tired of seeing small businesses losing out via application denial or being forced into a consumer card that ultimately would not properly serve their business,” said Owners founder and CEO David Mitchell in a prepared statement.
“With just a driver's license, owners can apply today for our business credit card, delegate purchasing power to their employees and bolster operational excellence," he said.
Several banks have honed their focus this year on solving the same problem as Owners aims to solve with the card launch. Grasshopper Bank and Ramp partnered in January on a card launch for small to midsize business clients, and U.S. Bank and TravelBank saw their 2021 deal materialize in a card launch for businesses graduating to the middle market.
“One of the big dynamics here is that while there is an enormous amount of small businesses, the options for small business credit cards are relatively limited to the choices offered to larger businesses, or even consumers,” Jeremy Bohne, who previously worked as an institutional investor in the banking space and now runs a wealth management firm, told Banking Dive.
“From the standpoint of the small business owner, cards provide another layer of protection for purchases they make, and make life a lot easier with bookkeeping and expense tracking. On top of that, some provide rewards similar to what consumers have become accustomed to,” Bohne said.
Owners was born out of 200-year-old, $7 billion-in-assets Liberty Bank this spring.
Mitchell, at the time, noted, “As the backbone of America, small businesses deserve better banking options. Our leadership team is not made up of typical bankers. In fact, many of us have owned small businesses ourselves so we know what this group needs from a banking partner. We’re here to fix the systemic issues in banking that small businesses have faced in every transaction with the launch of Owners Bank.”