It doesn't. Square notifies you of the maximum amount you are qualified for and the % of receipts taken for payout at that amount ( calculated on a one year payoff schedule). If you don't like the % of daily receipts deducted, there is a slide bar on the screen to lower the amount and thus the % of daily receipts.
It's important to note for tax reasons there is no interest rate on the "loan", there is a Processing fee ( top line deduction). What Square is doing is what is called factoring, selling future revenues. They call it a "loan".
