Theory about square capital stinginess

I've been seeing a trend of people not get loans even after a good history and early payoff. No one can figure out the algorithm and people getting frustrated.  I have a theory as to why square capital isn't great with square loans. 


They acquired the fintech company "Afterpay" in August 2021 for billions. My theory is that between that and the PPP Loans along with the restaurant revitalization fund, they just simply can't or won't take the risk on their merchants right now giving us loans with the inflation as well. Just a thought.  

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Super Seller

I'd say there isn't a lack of loan origination.  in the previous 90 days Square Loans originated 

83,000 loans totaling $594 million.  Basically 1,000 per day with an average of a little over $7,100.  That's almost on par with pre-pandemic Square Loan levels.  


This chart shows every quarter of Square Capital/Loans since Q2 2015


Screen Shot 2021-11-26 at 2.33.35 PM.png

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That chart is great but there are many of us who are paying off the loans quickly through many factors and still no offers or lower offers. Do you work for square in some way with that chart? 


It also makes sense with them holding off on loans until they see how this acquisition does. That and the CEO's love of bitcoin....


I'm probably just bitter but square is obviously biting off the hand that feeds them by being stingy with the loans

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Super Seller

No, @Dawggos, I do not work for Square, I just made it with the publicly available numbers from the Square quarterly reports and shareholder letters. I couldn't even figure out how to make the bottom labels show up to show what quarter the numbers were from.  https://s27.q4cdn.com/311240100/files/doc_financials/2021/q3/SQ-3Q-2021-Shareholder-Letter.pdf is the latest one and it breaks down a lot of what Square does on internal divisions.


Stingy isn't a word I would use, it is more that it is not an exact science as to why people do and don't get offers.  


Personally, I have had many offers from Square but as I have posted often here I do not find the Square Loans to be favorable to you and there are much cheaper ways to fund your business.  I can get money borrowed from our Revolving Line Of Credit for less than a quarter of what Square charges.  I could see if you were a starting business and you needed that 5 grand but you are paying a lot for that and at that stage in business getting deep into high rate debt can be a problem.

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This must be why they are flagging peoples accounts and holding their funds from them. I have had mine flagged three times and now I am told my customer paid with stolen cards and I cant accept the payments. My customer btw is a successful doctor who has paid numerous invoices with me using the same cards and has done so for months. Im leaving Square once my customer receives their refund.

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I have paid of 11 loans. Last one was almost 12k paid of in less than 2 months. They made me a new offer I excepted it and then they declined it??  Really doesn’t make sense how they do there loans. I have processed around $100k through square this year so you would think they would be jumping at my business!!!

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Square Community Moderator

Hello @Tonyc,


Good to see you posting in the Seller Community again, welcome back! 😊

The specific reasons your application was declined can be found in the email notice you received from the Square Loans team. There are a few reasons why a loan may be declined by underwriting. 


Take a look at this FAQ doc here.


Hope you find this insight helpful!

Community Moderator, Square
Sign in and click Mark as Best Answer if my reply answers your question.
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