No capital offer after paying off first loan in full

[LBP_Michael]

I intentionally paid off my first capital loan when I was a little over 60% of the way through anticipating a new offer. Square told me they would re-evaluate within two weeks after I paid my balance and nothing! Had I known paying off my balance wouldn't do anything I wouldn't have done it. Instead there's a large chunk of money missing from my account and no more capital. The only thing I have going for me is no more balance. I've made some rather large contracts with clients that will require some small investments on my end and now I'm out searching for capital options elsewhere. I'm really really disappointed that Square has let me down after being such a loyal customer since I started my business. Every time I called or emailed asking for updates I got generic responses sent back to me that didn't answer any of my questions. I understand Square Capital isnt guaranteed but to be told I'll have an answer in two weeks and then nothing is very disappointing. Not only for me but also my company and clients. Please, can someone just give me a direct answer as to what's going on? Thank you!

[Tritter82]

This sounds exactly like the email I sent them. I just want a straight answer. That's the least they can do for loyal customers.  

I too received the regular generic reply.  

They could offer much more information if they wanted to, which makes me wonder if the reason the don't give answers is to string us along. Making us think we will be eligible. 

Just a thought. 

[LaDora]

Hello @LBP_Michael and @Tritter82, 

We hear your frustration -- We review each account automatically and if a merchant is eligible, they will see three new offers in the dashboard. Due to regulation in the industry, we are not able to go into specifics about why any account is not eligible.

We do appreciate you choosing to partner with us to grow your business and I am sending good vibes your way.  

[Mikefixme]

I have paid off 4 capital loans,  last one being [Personal Information Redacted].  Paid off a week ago still no offer.  Very frustrating!  Never had this issue before

[Daveydave]

Thanks

[hmilesphi]

@LaDora

I too feel the frustration of no additional capital offers. I've paid off 2 loans in a very timely manner and was expecting a 3rd offer which has yet to materialize. The last loan I paid a large lump sum anticipating a new offer to expand in a new market while the opportunity presented itself. That opportunity has come and gone. I've read the blog inside and out and have done everything listed. I paid my last loan off over a month ago and was really counting on the third offer to epand into a new market. I've gotten the "scripted" responses from customer service. I love square but was I'm disappointed in how the Capital program appears to have changed yet with no clear explanation of the changes. 

[JanetK]

Hey there @hmilesphi, 

Janet here filling in for @LaDora 😄! 

Thank you for sharing your experience here on Seller Community and I am sorry to hear that you did not receive a new offer as you had hoped for. 

Please know that the reason that we are unable to go into specifics about the qualifications of a loan is due to the heavily regulated environment surrounding loans. However, I want to share some words of encouragement. Please be patient and rest assured that we are still actively reviewing accounts.

As soon as you qualify for a loan, we will let you know on your Dashboard and via email! Keep on focusing on your business and I will help keep an eye out on your account! 

[Bfly]

I would first like to say that Square is NOT transparent enough!!  

I like many of you business owner had a offer for a NEW loan and paid $460 off on the previous loan and the new loan offer was NO longer available and/or an option!  First, Square provides no direct contact number for assistance.  They process thousands of dollars from businesses and you can't even contact them when you have an issue, only through email.  They need to inform businesses that they give "capital loans" to that if you pay off the loan early it could affect the current offer being presented!  I never received that notification before I paid my loan balance off.  I really like using the square system until this!   

I am very upset because I too like many of the other businesses that have complaints needed the capital loan for new inventory!  It is a busy time of year for my business and this really sucks when you are trying to expand and conduct business!

[DaoDeJing]

As I understand it, whether a Square Capital loan is offered doesn't just depend on you paying the previous one off. Some of the things Square mentions include the amount of transactions, their dollar amounts, and their frequencies. Who knows what sort of activity they want to see. In order to offer you a bigger deal than last time, their requirements may be higher than the prior requirements. If the size and frequency of your transactions haven't increased to a high enough level, that might be holding offers back. But that's just a guess.

As another guess, I suspect paying off the end of a loan too quickly or with too large a dollar amount may not be the greatest signal to send to Square. If you were able to make a large payment, that suggests you didn't need as much capital as they offered you last time. So perhaps they take that as a sign they should hold back on the offers to you. Why risk giving someone an even higher dollar amount if they don't appear to have needed the prior one? But again, that is all just my guess.

From a more practical standpoint, Square can only give out so much capital at once. Perhaps they've loaned out as much as they can right now and need to wait for some more accounts to pay it back before they can offer more loans.

But perhaps all of this guessing on my part isn't helpful. If a Square rep wishes to take this comment down, I'll understand.

[hmilesphi]

@DaoDeJing

I understand what you are saying. Without divulging too much personal info the 1st loan represented less than 10% of my credit card sales. The second loan was offered also represented less than 10% of credit card sales. My credit card transactions range 8-10 per month each are $$$. My average sale is $$$. My annual credit card sales are [Personal Information Redacted]. 

From my my perspective these loans appeared to be starter types to see how responsible they would be handled. Which I treated as such and handled as such. How I pay them back should have no bearing as they get their agreed upon loan fee regardless. 

[DaoDeJing]

Ah, but how you pay them back absolutely matters.

The loan fee isn't the only fee Square gets from giving out the loans. They expect to also receive fees on the card transactions used to pay back the loan. By paying the loan back early you're denying Square that income. For instance, if your loan was for $10k and you paid off the last 40%, that's $110 in fees you've denied them. Not a huge amount, sure, but that's money they could easily get by simply giving their loan money to someone else instead.

I'm not saying they won't give you any more loans, just that paying off a loan early may not be as impressive to them as it would be to a traditional lender. Square Capital isn't a traditional loan. It has its own rules and philosophy, and only exists to benefit Square. That's the price to be paid for the convenience of it, I'm afraid.

Again, I should say that I have zero knowledge about what Square is actually thinking or why they make the decisions they do. I'm just making a guess here. And even if I'm right, that may not be the whole story behind your case. (For example, maybe they're currently low on capital to loan out.)

[LaDora]

Hi @DaoDeJing, 

I would like to clarify the total cost of the loan is the difference between total owed and the loan amount. This amount does not change once a prepayment is made towards the loan. There are no fees or penalties for early repayment.

Please know that the card processing fees are applied to all card transactions through Square, including Sellers that do not have a Square Capital plan. 

[Titanmediaphx]

I’m in the same position. Paid off a huge chunk of my 1st Capital loan hoping to take the next jump for my company and nothing. I get a scripted answer and they are quick to give me that but being a loyal customer who paid most of the loan off in 4 weeks and they can’t give me a real answer. I love square but they need to let people know that not everyone is offered a capital loan once you reach a certain point. It hurts companies who appreciate the help and depend on such loans to grow. I wish the best to you and your company.

[Dieseldad8580]

We have been with square since the first months of opening. Religiously paid off all our capital through them. Now out of nowhere our eligibility is as stated with everyone else out here. Cookie cutter response. Keep using your services and you'll become eligible. They bait you to get you to buy all there stuff and then cut you off. As many big business does. So we after trying to be loyal for a year got our loan through lendmark financial. I wouldn't be surprised by simply posting this if we become a liability and our services get cut off. If there telling you to keep processing and you'll "become eligible" don't hold your breathe. Loyalty is a thing of the past for square. Don't risk your business to simply stay loyal. Your just a dollar sign to them and if they can make more elsewhere they will. We were even sending them emails of the offers from their underwriters approving us for a loan and they still gave the same...."were sorry. Well forward this to our higher ups and get this done for you" with a follow up of. "Keep using your processing"  We as a business have given up on loyalty to them and are moving to our next option. This is my last attempt to make it public. Hopefully multiple people that have experienced the same respond. Prefer loyalty before we leave. If it wasn't for square capital we wouldn't be as successful as we are. It helped build our company.

[Dieseldad8580]

6 loans in total all paid in advance. To be clear. Simple preference is to stay with square. However I'm sure the response I will get will be the same as the rest of you. We appreciate the loyalty. Our team automatically evaluates your processing and you will have three loan offers available. When reality is they bought a company "caviar" and have to build it. The only people getting new offers are new companies signing with square. The reason I know this I our company is in the business of helping other businesses set up. We set up square as their processing. All 12 companies I've helped set up in the last year have been given offers which I helped them with. So even in helping build square there had been no loyalty returned. Again we are grateful for the help but it was a bait and drop.

[Regina_B]

Hi @Dieseldad8580 👋

Regina from the Square Capital team here. I understand your frustration regarding loan eligibility. Unfortunately, as I am sure you have heard before, we cannot go into specifics about eligibility because the information used is based on a proprietary underwriting model. We also can’t go into specifics in the community because this is a public forum and don’t want your account security compromised. 

We really appreciate this kind of feedback that you and others have shared because we are constantly working on improving our products and services for our Merchants. I will be passing your feedback to our team, but please let me know if there's anything else I can add. Thanks again for taking the time to share your experience.

[MoverGuy44]

Hello @LaDora

I just found this thread and was wondering why I received 3 loans, all paid in full in a row, and then have not received an offer and almost 1 year now.

My business has regular transactions and very few refunds.

Everything is above board as it was when I received loan offers.

Would you be kind enough to look into it for me? I really can use a loan right now to help grow my business.

[RVHD143]

Agree!!! They have definitely gone downhill! Start using PayPal! They offered me a loan within first year and I only run 1/2 as much $ through them as I do Square! I’m done with Square. Very bad business