Parker was designed specifically for eCommerce companies. Their flagship product is a credit card with payment terms that help ease cash flow constraints on eCommerce businesses. Parker has since expanded into banking products. Companies use Parker’s credit card to finance large spend categories (typically paid ads, inventory POs, and shipping costs). Unlike typical credit cards, with Parker each day represents its own statement and companies have access to 30, 45, or 90 day lines of credit depending on their size. Stores connect their eCommerce platform (Shopify, Amazon, etc.) to quickly gain access to credit. There’s no interest charges, fees, or personal guarantees on lines of credit. In order to use Parker, you’ll need an eCommerce business that has done over $1M in sales over the last 12 months and a $10k cash balance. We think the decision to use Parker will depend on how fast your business is growing and how cash constrained it is. The cash back amount on Parker credit cards is only 1% so there are better options out there from a pure credit card rewards perspective, but the ability to finance your business using Parker might be worth it for companies that are growing rapidly and cash strapped.
Read our full guide on: Business Credit Cards 💳
Best for: Small & Medium ($1M+ revenue) size companies.
Parker offers a credit card and banking product specifically designed for the needs of eCommerce companies.
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Parker was founded by Yacine Sibous and Milan Ray in 2019 to provide specialized financial products and services for eCommerce businesses. Sibous and Ray ran their own eCommerce brands and realized that existing corporate credit cards and financing options were not great for the needs of small and mid-market eCommerce and consumer brands. They created Parker's interest-free credit card offering rolling payback periods and higher credit limits to help these companies optimize their cash flow and profitability. The company graduated from YC in the Winter class of 2019 and raised a $31M series A led by Valar ventures. Within two years, Parker has processed over $300 million in transactions for hundreds of eCommerce brands. To date the company has raised over $157M in debt and equity.
Corporate Credit Card
Parker’s flagship product is their credit card. In order to understand its differentiation, it’s helpful to understand how the typical credit card operates. Typical credit cards work on a monthly statement basis meaning that a purchase made in the beginning of the month won't be due to be paid back until 28-31 days later until the beginning of the next month. However, purchases made at the end of the month will be due to be paid back only a couple of days later. The effective days of credit becomes the midpoint of the month so ~15 days. This is okay if you can time big purchases like inventory for the beginning of each month, but the reality is that you can’t always time big purchases perfectly, and some categories of spend like advertising are steadier throughout the month.
Parker takes a different approach and each day represents it’s own statement and will have payment terms of 30, 45, or 60 days depending on the size of your business. This guarantees that every purchase will have the same payment terms no matter when in the month it is made. This makes Parker function more like a true credit product and compete with Shopify capital and 8fig for eCommerce financing. Parker also argues that the credit limits will be higher on Parker cards than they will be on other cards because Parker understands eCommerce businesses deeply and is more comfortable with the risks of underwriting them. The credit limits are typically 10-20x higher at Parker than they would be with competing credit cards.
For fast growing, cash constrained eCommerce companies, the extension of payment terms and potentially higher credit limits that Parker offers has the potential to be huge. However, it only offers 1% cash back on its credit card spend, so those that aren’t needing Parker’s extension of payment terms would be better off with a card that has higher cash back or more generous points (read our guide on the best business credit card for eCommerce for more info).
Corporate card competitors:
American Express Business Gold Card
Corporate cards (no personal guarantee):
Co-branded Business Cards:
Marriott Bonvoy Business American Express Card
The Hilton Honors American Express Business Card
Lending
Banking
Parker also offers a banking product in addition to its Credit card offering. They are not technically a bank and instead offer their banking services through a partnership with Piermont Bank. With Parker’s banking product they offer $10M in FDIC insurance and free domestic ACH transactions. Since they are focused on eCommerce companies, they are able to offer deeper analytics on businesses’ P&L and profitability. Here they compete with Mercury (our recommended bank) and other banks targeting startups.
Banking competitors:
What is a Parker card?
Parker is a financial services company whose flagship product is a credit card that offers higher credit limits and better payment terms to eCommerce companies. It also recently launched a banking product.
How does Parker card make money?
Parker makes money on transaction and interchange fees. They also charge interest on their 60 and 90 day credit offering.
What is the difference between Parker and Brex?
Parker and Brex both offer credit card and banking products to startups, but Parker is focused on small and mid market eCommerce companies, whereas Brex is focused on technology startups.
Does Parker card require a personal guarantee?
No Parker cards do not require a personal guarantee.
What are the requirements to get a Parker Card?
In order to be eligible for a Parker Card you will need a minimum of $1M in sales over the last 12 months and at least $10,000 cash balance in your business bank account. Additionally, your company must be incorporated in the US. Parker will dynamically adjust the credit limits as your company scales.
What is the credit limit on the Parker card?
Credit limits on Parker cards are set dynamically based on company performance and can be up to $10M.
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