Divvy Review – Credit Cards & Expense Managment for Businesses

Call it a cliche, but credit really is the lifeblood of most small businesses. All the talk of bootstrapping and expense-slashing can’t hide the fact that your company’s fortunes depend on reliable access to capital now — and not three months or even three weeks from now.

Divvy is one of many business credit providers that helps small and midsize businesses tap cash when they need it most. It goes a step further with powerful spend tracking and expense management tools too. It’s an impressive tool that every growing business should think seriously about adding.

Oh, and Divvy is totally free for users, which makes it all the more impressive. I analyze business bank accounts and small business credit cards for a living, and while I can’t say Divvy is totally unique, the one-two-three punch of no fees, scalable business credit, and expansive money management tools legitimately sets it apart. See what to expect from Divvy and decide whether it’s right for your company.

What Is Divvy?

Divvy offers basic financial services to small and midsize businesses. At its core is a flexible business credit line that can scale with your business. It also has business budgeting and expense management tools that help simplify even the most complex commercial finances.

Divvy doesn’t have any fees for users. It makes money through card interchange fees, which come out of the net received by merchants you pay with Divvy. Because you access your Divvy business credit line through a corporate charge card that you must pay in full each statement cycle, you don’t pay any interest on the float. 

Divvy’s most notable benefits include a customizable card rewards program with qualifying spend, a powerful mobile app, and seamless integrations with external accounting software.

How Divvy Stacks Up

Divvy isn’t the world’s only business credit solution, of course. It competes against a slew of small-business credit cards and loan providers, each with their own strengths and weaknesses.

One of Divvy’s better-known competitors is the Chase Ink Business credit card family, which includes three names: Ink Business Preferred, Ink Business Cash, and Ink Business Unlimited. See how Divvy compares to Chase’s small-business credit card lineup.

What Sets Divvy Apart?

Divvy stands out for many reasons, but these four in particular stand out to me as someone who spends hours wading through financial fine print every week.

• No Interest. Divvy is a charge card, not a credit card. That means you have to pay off your charges in full at the end of each billing period. While this isn’t unusual in the world of business credit, it’s important because it means you’ll never pay interest on Divvy draws.
• No Monthly or Annual Fees Fees. Divvy is somewhat unusual among business credit providers in its total lack of monthly or annual fees to use the product. Divvy makes money on the back end, through cuts of payments made to merchants.
• Appropriate for Businesses With No Credit History. Divvy offers a secured credit line for businesses that don’t qualify for unsecured lines. Typically, that means new businesses with no credit history and businesses with limited or irregular revenue.
• Powerful Financial Software Built Into the App. Divvy has extensive budgeting and expense management tools that integrate seamlessly with its credit services. It’s powerful enough to replace your current business budgeting software, for sure.

Key Features of Divvy

Divvy has three core features: 

• A commercial credit line (technically, a corporate charge card)
• Business budgeting software
• Expense management software

The software is totally free for Divvy users, regardless of business size, though Divvy makes clear that its solutions are meant for businesses with fewer than 500 employees. Divvy makes money through card interchange fees, meaning it takes a small slice of every transaction you make before passing the funds along to the merchant.

Business Credit

The Divvy Card is the flexible credit line at the heart of the Divvy ecosystem. It knits the other two main Divvy features — budgeting and expense management — together.

These are the most important components of the Divvy Card:

• Pay in Full. The Divvy Card is a charge card, not a credit card. This means you must pay your charges in full at the end of the billing period. This shouldn’t be a problem if your business has steady income, and it’s a blessing in disguise because you’ll never pay interest.
• Flexible Credit Line. Divvy knows your business is more than a credit score. It considers revenue, growth potential, and other nontraditional factors in underwriting, which could lead to a higher initial credit line. And your credit line can scale as your revenue increases — you can apply for an increase with just a few taps in the app.
• As Many Virtual Cards As You Need. Divvy generates virtual cards on demand whenever you need them. I personally love virtual cards — they’re clutch for one-time and recurring expenses where you don’t want the vendor to have access to your real card number.
• No Upfront Fees for Employee Cards. Divvy doesn’t charge any upfront or setup fees for employee cards. No matter how many people are on your team, you can hook each up with an individual Divvy card. 
• Enforceable Budgets and Spend Controls. If you’re nervous about giving newer employees a card of their own, Divvy has customizable spend controls that make it impossible for employees to overspend. I’d recommend setting spend limits based on role and seniority.
• Regular Credit Reporting. Divvy reports your credit utilization and payments to the Small Business Financial Exchange (SBFE), a nonprofit business credit reporting agency. Use your card responsibly and you’ll build business credit over time.
• Secured Credit Lines If You Don’t Qualify for an Unsecured Line. The standard Divvy credit line is unsecured, just like a regular credit card. If you don’t qualify due to limited business credit history or income, you can prefund a secured Divvy Card and still benefit from the flexibility of a credit line.

The Divvy Card has a flexible rewards program that earns up to 7 points per $1 spent (7x) on eligible purchases. You must draw at least 30% of your available credit to earn rewards in any given billing period, and your actual earn rate depends on your repayment frequency.

Here’s how that looks:

You can redeem points for travel purchases, gift cards, statement credits, or straight cash back. You get the most value for travel redemptions — $0.01 per point — and about $0.005 per point for all other options. So if you or your team regularly travel for business, Divvy is much more rewarding.

Spend Management (Budgeting)

Divvy’s budgeting tool makes it easy to create a tactical financial plan for your business. 

If your company is small and its finances relatively simple, you can stick with a single budget that covers the entire enterprise. Otherwise, create multiple budgets for departments or teams, adding or removing employees from each budget as needed.

Your Divvy budgets link to your Divvy employee cards. As the budget owner, you can require approval for every single employee card transaction or set preapprovals that allow small, routine transactions to go through without your say-so. But approval requests come straight to your Divvy app, so it’s easy enough to approve a transaction without interrupting what you’re doing. As your organization grows, you can delegate this responsibility to team leaders and department heads.

The hidden power of Divvy’s budgeting tool is its ability to spot overspending in real time, before it becomes a serious liability. And you can generate monthly reports that provide a systematic, granular view of spending at an individual, team, department, and company level. That makes it much easier to adjust budgets on the fly.

Expense Management

Divvy’s expense management tool is basically your budget or budgets in action. It automates much of the busy work of business accounting, like categorizing expenses.

Divvy integrates with third-party accounting software. So if you use another program to track business expenses for tax or budgeting purposes, you can set up your Divvy account to mirror what you have there. That eliminates time-consuming duplicate entries and ensures your external accounting team works off the same information as the in-house folks responsible for your company budgets.

If you don’t use your Divvy credit line for every business expense — and you probably won’t, at least not at first — you can use Divvy to track what it calls “off-card” expenses too. This is really important if your employees use personal credit cards to pay for travel, meals, and other incidental expenses — simply enter the reimbursement in Divvy to ensure it’s tracked along with everything else.

Advantages of Divvy

Divvy is a comprehensive business credit and money management tool. The fact that it’s totally free to use grabs headlines, but there’s a lot more for business owners to like about it.

• No Fees or Interest on Divvy Credit Lines. Divvy Card credit lines don’t charge fees or interest. This is a big advantage over pay-over-time business credit cards that can charge interest at 20% APR or higher and often charge annual fees north of $100.
• Unlimited Virtual Cards. There’s no limit on the number of virtual cards you can generate with Divvy. Use them for recurring subscriptions, one-off payments, and any other situation where you’d prefer to keep your real card number safe.
• Seamless Integration With Divvy Tools and External Accounting Platforms. Your Divvy Card account integrates seamlessly with Divvy’s budgeting and expense management tools. If you use an external accounting platform, you can hook it up to Divvy too. This is a big factor in why users surveyed by Divvy said it saved them 12 hours per month on average.
• Flexible Spend Limits on Employee Cards. You have the final say over how much your employees spend (or don’t) on their employee cards. And you can approve or decline transactions with a few taps. If overspending is the norm for your business, maybe Divvy is the answer.
• Flexible Rewards Program (Up to 7x Back). Divvy has an unusually generous rewards program that incentivizes you to repay purchases faster. Repay weekly and you’ll earn up to 7x on eligible purchases. That’s a 7% rate of return, which is better than most business credit providers.

Disadvantages of Divvy

Divvy isn’t perfect, though I think it’s much better than the average business credit provider (and certainly better than the average business credit card). Here’s where it falls a bit short.

• Can’t Carry a Balance From Month to Month. If your business cash flow can’t support repaying your Divvy charges in full at least monthly, Divvy isn’t for you. The drawback, of course, is that traditional business credit cards charge interest at eye-watering rates.
• No Business Bank Account. Divvy doesn’t have a built-in bank account, just a flexible credit line. You’ll need to keep your working capital elsewhere.

Is Divvy Legit?

Yes, Divvy is legitimate. It got its start as a budgeting and expense management tool for small and midsize businesses, then expanded into business credit lines. Today, following its 2021 acquisition by Bill, it’s a powerful business finance package for companies that want to get a handle on their budgets and expenses — and tap a flexible credit line as needed.

Divvy has the potential to save business users serious money: over $10,000 per month, according to a Divvy survey. Divvy saves time, too, on the order of 12 hours per month for active users. And the vast majority of Divvy users would recommend it to others.

Alternatives to Consider

Final Word

Divvy offers a flexible credit line with employee subaccounts (the Divvy Card), plus powerful budgeting and expense management tools. It integrates with third-party accounting software. It delivers outstanding rewards on eligible spend.

And it’s totally free for business users.

Divvy sounds like a good deal, and in my educated opinion, it is. It really shines for small but growing companies with relatively steady revenues, hawklike attention to the bottom line, and an aversion to bureaucracy and busy work. If that sounds like your business, you’d be hard-pressed to find a better business credit partner.