| 7 min read

How Does Divvy Work?

Divvy’s main product for small business owners is an expense management platform accessed through a credit card. Benefits include spend management, AP automation and rewards. Here we’ll explain how Divvy for small business works. 

What is Divvy?

Divvy describes itself as an all-in-one expense management solution. This Bill.com company offers a wide range of products to help Divvy customers grow their business while streamlining spending and expense management.

How Does Divvy Work?

Divvy’s flagship product is expense management tied to a credit card. Here’s an overview of Divvy products. 

Credit Card

Divvy offers an unsecured business credit card. This credit card has:

  • $0 annual fee 

  • Free virtual cards

  • Free employee cards

Cardholders also earn rewards on purchases. Each set of points below corresponds to the frequency with which you pay your Divvy balance off. Those paying weekly get the highest rewards, then those paying semi-monthly, and finally those paying monthly get the lowest reward points. 

It is also important to understand that you can earn points during your first year, but you can’t start redeeming them until you’ve been a customer for at least a year. Also, if you don’t use at least 30% of your available credit per month you won’t earn points for that month. 

  • 7/4/2 points per dollar on restaurants

  • 5/3/2 points per dollar on hotels

  • 2/1.75/1.5 points on software subscriptions

  • 1.5/1/1 points on all other eligible business purchases

Learn more about Divvy rewards here

There are of course eligibility requirements for the card. You need a good credit score to qualify, your business must be based in the U.S., and you must have an active bank account with at least $20,000. 

Credit Builder

Divvy’s Credit Builder is available to small business owners who may have trouble qualifying for the regular Divvy card. The main difference between the Credit Builder and the regular credit card is that this is more like a secured credit card while the main card offers an unsecured line of credit. 

With Divvy Credit Builder, you’ll need to preload funds before you spend them. 

With both cards, Divvy will report your payment history to Dun & Bradstreet and SBFE which can help build business credit.

Spend Management

The spend management product from Divvy offers big and small businesses tools to help control what a business is spending. With Divvy’s spend management, you can review and forecast budgets, approve fund requests through the mobile app, look at spending from the department level all the way down to projects and individuals, track spending in real-time, and more.

Expense Management

Divvy’s expense management product offers several tools to make managing expenses easier. Not only can you review transactions, categorize transactions, and view transactions in real-time, but you also have the ability to automate expense reports and easily reimburse employees.

AP automation

Divvy is a Bill.com company; the AP automation they offer goes through Bill.com. The AP automation helps you digitize invoices, send invoices to the right personnel, streamline paying invoices, syncs with accounting software, and updates your general ledger. 

Pros and Cons of Divvy

Each program and product is going to have positives and negatives. However, two things that are good to keep in mind are that Divvy is free and all the programs and products are in one spot. You don’t have to worry about integration or multiple accounts, they are in one place. 

However, there are some drawbacks. First, the regular Divvy card may be hard to for newer businesses to qualify for as it requires $20,000 in an active bank account and good or excellent credit scores. 

The rewards program is generally competitive but the fact that you can’t redeem rewards in the first year, combined with several reasons why your business may not earn rewards in a given month (or forfeit them) makes it less competitive than rewards programs where you earn and can redeem rewards more quickly.

Some business owners may want a line of credit they can repay over time. With Divvy your options are limited to paying monthly or more frequently. 

Alternatives to Divvy

One of the most commonly mentioned alternatives to Divvy is Brex. Brex also offers a card tied to expense management software. However, in the summer of 2022, Brex announced that they will soon be providing services exclusively to venture capital-backed companies or those that have received angel funding or similar outside funding, which means many traditional small business owners won’t qualify. 

Dash.fi can be an excellent alternative for businesses with high spending requirements. It is designed for businesses that need higher limits (often 10-20x industry average), want to control spend, and that want to stabilize ad spend at scale. It also offers a competitive rewards program with 3% unlimited cash back for the first 60 days, and 1.5% unlimited cash back after that. Unlike Divvy you don’t have to wait a year to redeem your cash back.

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