Credit cards for small businesses in Mexico

Small businesses need access to several financial instruments to effectively manage their day-to-day business expenses. While the two personal credit cards and business credit cards can give you access to lines of credit, business credit cards are recommended for business expenses, even for small businesses.

You don’t need to manage multimillion-dollar operations — you can open a business credit card to cover small business expenses, including freelance gigs, for-profit activities, and more.

Small business credit cards are designed to help fund business expenses, track business purchases, and record transactions systematically. In this article, we will briefly discuss the accessibility of lines of credit for small businesses and the best credit card offers in Mexico.

Accessibility to Small Business Line of Credit in Mexico

Mexico lags behind other countries with similar levels of development in terms of financial inclusion. Small and medium enterprises provide 70% of employment in Mexico, but only around 11% use bank credit due to lack of affordability and accessibility, according to the World Bank.

SMEs are fundamental to the Mexican economy. It is estimated that there are 5 million registered SMEs and 5 million unregistered businesses in Mexico.

According to Bank of Mexico records, of these, 25% have loans of some kind. Only 5% of these companies are financed by the big banks. Non-bank lenders serve 3% and 17% through alternative lending sources. This means that 75% of Mexican SMEs do not have access to formal loan services.

The COVID-19 crisis has only made the situation worse. In response to the economic shock, the Mexican government has dedicated more resources to improving the business environment through innovative solutions such as better access to loans, higher subsidies, investments in fintech and digitization of cross-border payments or the remittance sector.

These investments have exponential benefits for people, businesses and the country. Take the example of the digitization of cross-border payments, which has made it possible to send money to Mexico fastercheaper and more secure.

Read: The best way to send money to Mexico

Why should you get a small business credit card?

Credit cards in Mexico are a good financing option for small businesses that do not have the elaborate financial data sought by traditional banks to extend credit.

Most SMEs (small and medium-sized enterprises) find it difficult to obtain credit due to lengthy bureaucratic procedures and excessive fees.

The current Mexican banking system has left a huge percentage of businesses underfunded. A small number of large corporations make up the majority of the bank’s loan portfolios in Mexico. IMF data show that 80% market share is controlled by the seven largest banks (BBVA, Santander, Citi, Banco de Mxico, HSBC, Scotiabank, Banco Inbursa).

Meanwhile, Moody’s reports show that SMEs make up about 90% of businesses in Mexico, but account for only 9% of total bank lending. This means that Mexican SMEs are underserved by the banking system, causing them to seek credit from alternative sources.

With banks only focused on the top of the market and non-bank lenders (SOFOM) expensive (interest rates up to 40%), Mexico’s fintech sector is stepping up to fill the gap and contribute to the growth of SMEs by providing access to affordable and rapid credit. Neobanks such as Oyster Financial which we will discuss later in the blog are an example of this.

Let’s find out which credit cards are best for small businesses in Mexico.

Best Mexican Credit Cards for Small Business

Covalto American Express credit card

The Covalto American Express credit card is issued by Credit, a technology-based small business lender in Mexico and backed by i2C, a leading provider of digital payments technology and banking technology. The card is supported on the American Express network.

The Covalto American Express Credit Card is a one-of-a-kind business solution with digital integration. The card and financial software offer businesses an innovative way to control spending, simplify financial management and increase business visibility through a mobile app.

Features of the Covalto American Express Credit Card

  • Digital company cards
  • Unlimited Cashback
  • Next Generation Security
  • No cost and no pension
  • 40 day financing
  • Buy payment options up to 5 monthly installments
  • Virtual card capabilities with an all-digital experience through the Covalto app
  • Reduce boarding times
  • Immediate access to credit lines

Mexican Visa Business Cards by Tribal Credit

Tribal Credit, a payments fintech, issues local business Visa cards in Mexico for SMBs looking for a better way to pay business expenses and optimize their financial management, including cross-border B2B digital payments.

Their Mexican card issuance program allows customers to grow faster using higher credit limits and optimal interchange rates. In addition, it frees SMEs from the shackles of local financial barriers imposed by traditional banks.

Mexican Business Visa Features by Tribal Credit

  • Proprietary AI-based approval process
  • Accepted worldwide (wherever Visa is accepted)
  • Zero interest
  • Ten days to settle your balance each billing cycle
  • Physical company cards
  • Virtual corporate cards: create unlimited cards
  • Online access to team expenses

Jeeves-MasterCard credit card

Mastercard and Jeeves are offering physical and digital cards to many Mexican businesses to help ease credit access issues in Mexico.

Jeeves is an all-in-one expense management platform for global startups. It is the first banking and expense management entity approved to be a primary member of Mastercard in Mexico.

Jeeves claims to offer fast credit card approvals without personal guarantees and is the preferred fintech among over 700 Mexican SMEs such as Runa, Monns, Bitso, Kavak and many others.

Features of the Jeeves-MasterCard credit card

  • mobile first
  • Hassle-free registration
  • Physical and virtual cards
  • Credit card approval in record time
  • Possibility to pay 30 days of credit in local currencies (wherever Mastercard is accepted)
  • No fees and no transaction fees
  • Of no interest
  • Free unlimited virtual cards
  • Up to 4% cash back
  • No personal guarantee

Konfo Visa credit card

Mexican fintech, Konfo, in partnership with Visa, offers a credit card for SMEs for whom low credit lines are hindering the growth potential of their business.

Business owners can order the digital format of the credit card on the Konfo website and have access to a line of credit within 6 minutes of approval. It is a lifesaver when funds are needed and fast. A physical card is then sent to the applicant a few days later.

The line of credit offered depends on the financial behavior of the business owner.

Features of the Konfio Visa credit card

  • Use the card immediately after approval
  • Requirement: 25-75 years old, three months billing, valid ID
  • Spend and defer payments with a preferential rate
  • Interest-free monthly purchase
  • Benefit from discounts, payment facilities & Cashback with your purchases
  • Three additional cards at no cost
  • Share purchasing expenses and responsibilities with your team
  • Monitor expenses and payments from the Konfo app
  • Get protection and coverage on travel and purchases by VISA
  • Annual cardholder fee (after one year of issue): $1,250
  • Late payment fee: $500

Oyster Financier

Oyster Financial is a leading neobank for small and medium businesses in Latin America.

Unlike most large Mexican banks and financial institutions that do not serve SMEs, Oysters directly helps small businesses make or receive payments efficiently and optimize their operations through business support tools.

And it focuses on providing quick access to credit to small businesses that are the cornerstone of new job creation for about 95% of private sector jobs in Mexico.

Features of Oyster Financial

  • A lifeline for the cash flow of many Mexican SMEs
  • Oyster offers instant credit (between $500 and $1,500)*
  • Revolving lines of credit
  • It’s fast and free to register
  • Actively engaged Oyster customers can be approved for revolving lines of credit of up to $5,000 within months of opening a new account.

*available to small businesses in Mexico when opening an Oyster business account.

At the end of the line

Business credit cards are useful when you’re running a small business, especially in the beginning. This not only helps separate personal and business expenses and can help establish business credit so it’s easier and more convenient later with loans and leases. You also get additional cards for your team members.

Mexico is the largest fintech hub in Latin America, slightly ahead of Brazil. No wonder fintech has started to seize the opportunity to address the large unmet need of Mexican SMEs by bringing automation and technology-driven services to improve access to financial services.