A new alternative for small and medium sized businesses
Oct 31, 2012 Sean Albert
Alternative financial services have been incredibly popular and important in the years following the recession, as many consumers have viewed traditional bank accounts as dangerous and unpreferable. Now, businesses seem to be entering the alternative finance arena as well, likely resulting from increased needs for working capital and a depleted number of traditional resources. Prepaid cards have been increasingly popular with consumers, while businesses have rolled out new options to reach new demographics. While ACH cards have experienced growth in the business-to-consumer process, small and medium sized companies have used similar services to improve operational efficiency and give employees more options for their paychecks. The birth of a new small business prepaid card
TechCrunch recently reported that one company released the PEX Card, which is essentially a prepaid card that small businesses can use for a variety of purposes. According to the news provider, the creator was allocated more than $3 million in additional funding to make the product more widespread, bringing the grand total to roughly $5 million. Many small and medium sized businesses have started using the card for employee expense purposes, as it gives these firms an enhanced ability to budget and track spending among traveling staff members. The card system comes standard with a customizable online dashboard, further empowering employers who use the prepaid option, TechCrunch noted. "The traditional method for companies to issue a card to an employee is with a credit card, so even charge cards have some element of short-term credit that's being issued to a business," Toffer Grant, CEO of PEX, explained to the source. "In our model as a prepaid debit card, the company has to fund the amount of money they want to have on deposit for employee spend ahead of time. In essence, they're self-crediting." Better managing budgets
As the economy continues to recover from the lulls of the Great Recession, small and medium sized businesses need to do everything in their power to manage their operations in the leanest way possible. Tools like this prepaid card for expenses and other employee purposes can help business owners do just that, as they will avoid the risks of negligent workers using company cards. Additionally, alternative financial services can be extremely helpful when faced with a budget shortfall and the need to have cash immediately. Many small businesses have been able to keep their operations running by using short-term financing and other alternative resources for capital.
TechCrunch recently reported that one company released the PEX Card, which is essentially a prepaid card that small businesses can use for a variety of purposes. According to the news provider, the creator was allocated more than $3 million in additional funding to make the product more widespread, bringing the grand total to roughly $5 million. Many small and medium sized businesses have started using the card for employee expense purposes, as it gives these firms an enhanced ability to budget and track spending among traveling staff members. The card system comes standard with a customizable online dashboard, further empowering employers who use the prepaid option, TechCrunch noted. "The traditional method for companies to issue a card to an employee is with a credit card, so even charge cards have some element of short-term credit that's being issued to a business," Toffer Grant, CEO of PEX, explained to the source. "In our model as a prepaid debit card, the company has to fund the amount of money they want to have on deposit for employee spend ahead of time. In essence, they're self-crediting." Better managing budgets
As the economy continues to recover from the lulls of the Great Recession, small and medium sized businesses need to do everything in their power to manage their operations in the leanest way possible. Tools like this prepaid card for expenses and other employee purposes can help business owners do just that, as they will avoid the risks of negligent workers using company cards. Additionally, alternative financial services can be extremely helpful when faced with a budget shortfall and the need to have cash immediately. Many small businesses have been able to keep their operations running by using short-term financing and other alternative resources for capital.
