Growth companies are more than just their credit history or their cash balance. That’s why we take a holistic approach to underwriting.
High growth companies demonstrate their potential in a variety of ways, from investing in R&D and growing the leadership team, to improving unit economics and expanding operating margins.
So imagine a founder’s frustration when card providers take a narrow view of their business.
The truth is, most financial institutions can’t be bothered or don’t have the resources to fully understand your organization and its future when it comes to underwriting and setting a credit limit.
But advances in predictive analytics have made it easier for tech-forward platforms to assess a business holistically across a number of data points. Which is to say, there’s no reason to accept a lower or less stable credit limit than you deserve when there are more thoughtful and growth-oriented solutions on the table.
Below, we weigh the shortcomings of traditional underwriting methods, explore some of the alternatives, and consider how modern card providers like Rho are empowering growth companies to reach their full potential.
A two-pronged obstacle to growth
Existing underwriting practices tend to disappoint when it comes to growth companies—but they disappoint in different ways.
On one end of the spectrum, legacy financial institutions are famously conservative. They want to see years of revenue data when establishing a credit limit and often require a personal guarantee or collateral before issuing a corporate card.
If you’re a high-growth company, the problem with that is obvious. When you’re growing 100% quarter over quarter, last year’s financials represent a mere fraction of who you are today. And the end result is usually an inaccurately low credit limit.
Typically, major card providers like American Express and Capital One are too big to be nimble or attentive, and their outdated underwriting models can’t keep up with your real-time expansion. You’re still small compared to the enterprise clients they serve—and they make you feel it.
Conversely, some newer fintechs embrace high-growth companies with thinner financial histories and limited revenue data—but they only care about your cash balance.
This approach has three key drawbacks. Firstly, tying your credit limit to your cash balance sets you up for a limit that fluctuates abruptly as you spend. Secondly, by relying solely on cash balance, underwriters only see a sliver of your company, failing to take more meaningful and predictive factors into account. This often leads to an overcorrection when determining a credit limit. Finally, considering your cash balance independently of, say, your payables or short-term debt, can put both parties at risk.
Ultimately, they miss an important opportunity to serve a wider swath of the market and to be real advocates for growing businesses.
Flexible, comprehensive underwriting
Modern financial platforms understand that a business is made of more than its bank account. And they use cutting-edge technology to combine and improve upon existing underwriting methods.
The best card providers today get to know your business beyond your bank account. That means tapping into nontraditional data points to understand not only where your business has been, but also where it is headed. It’s what digs up the hidden but valuable merits that secures your company the highest possible credit limit.
Maybe you’ve just secured a significant customer contract. Perhaps your business has a favorable cash conversion cycle. Or potentially you’ve amended the terms with your lender in your favor. These things matter to the right card provider.
In some cases, of course, taking a closer look means the bar to credit is raised. But ultimately, it means that promising companies, if paired with the right card provider, should enjoy higher and more stable limits that fuel their growth. It’s all about having more information on the table and finding reasons to give credit where it’s due.
Higher credit limits in action
Rho understands growth companies—it’s in our financial DNA—and we’ve made it our mission to support them when it matters most. That’s why the Rho Card offers the highest possible, and more stable credit limit that grows as your business expands.
If your credit limit keeps decreasing even as your business outperforms, you are with the wrong card provider - period - and you now need a sustainable credit solution that scales alongside you.
Finally, being an advocate for growing businesses means never introducing arbitrary costs and terms that would offset higher limits. With the Rho Card, there’s no interest, annual fees, personal guarantees, or collateral.
High-growth companies are scaling month over month, quarter over quarter, year over year, and they deserve a high, stable credit limit on a corporate card that matches their success.
So if you don’t have three years of revenue at your back—or if you’re consistently reinvesting your cash balance in your business—we see you. You’re doing everything right, and you need a credit limit that proves it.
Want to learn more about high-limit corporate cards?
Check out our article on choosing the best corporate card for your team.
Or, if you’re ready to reach higher, set up a meeting, and discover how the Rho Card can transform your finances.