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All about Square Loans: Part 2

A year ago, Kaitlyn, a fictional Square merchant and owner of the furniture store, Arden Homes, started her journey with Square Loans. Let’s see what Kaitlyn has been up to after all these months!

 

After spending these past months repaying her loan, Kaitlyn recently found out that her business is eligible for another loan through Square Loans. She received a notification on her Square Dashboard, as well as an email letting her know she could reapply.

 

At the moment, Kaitlyn needs to buy more inventory for her business and is looking to hire a full-time sales associate for her business, so the offer came at a great time. She selects an offer, fills out her application and submits it. Three days later, she still has not received an update about the status of her businesses’ application. Typically, an application for a Square Loans loan is processed between one to three business days.



Why is Kaitlyn’s application taking longer than one to three days?

 

When a loan application is taking longer than expected to process, it can be because all the information needed in order to move forward with the process has not been provided. It is important to check your email and Dashboard for any outstanding Information Request Forms and ensure that they are 100% complete. Once complete, we are able to process the submitted information. Find more information about what documents are acceptable for verification purposes by visiting “Additional Information Requested by Square Loans.

 

 

Kaitlyn logs into her Dashboard and notices a notification asking her to verify her business information. Square Loans is requesting that she submit a photo of her government-issued ID. In the past, Kaitlyn never needed to provide this information during the application process.



Why did Square Loans ask Kaitlyn for documentation?

 

We do our best to verify information you initially provide, but sometimes we need additional documentation to complete the verification, such as your ID, Social Security card, or EIN Confirmation Letter (SS-4) for your business. We have a duty to verify certain identity and business information and sometimes this means we must ask for supplemental documentation. Find more information on how to verify your account here.



Kaitlyn was never asked for this information before, why is she being asked for it now?

 

As part of the application process, it is critical to verify the person applying for the loan and the business information related to the loan. Our goal is to make this process as quick and secure as possible.



After Kaitlyn submits the requested information, she receives an email stating that the application was declined.



Will Kaitlyn be eligible for Square Loans again in the future?

 

If your application for a Square Loans loan is declined, you may potentially become eligible again. For example, if your application was declined due to too many chargebacks, you may want to follow these chargeback tips. This will help ensure that you are protecting your business while improving your chances of getting another offer. Eligibility of our sellers for loans through Square Loans is routinely reviewed, but we can’t guarantee that another offer will be extended.

 

Tip: Get more information around why you may have been declined for a loan through Square Loans here.

 

Kaitlyn continues to run her business and is hopeful that she will get another offer in the future.

 

 

What should she do if her business is not eligible for Square Loans?

 

At this time, sellers are unable to submit an application without an offer, nor are we able to manually create an offer. If you find yourself without an offer, here are some things you can do in the meantime:

 

  • Be patient - We know this can be frustrating, but Square Loans closely monitors many aspects of your account such as payment processing volume, account history, and payment frequency, to determine her loan eligibility. Changes related to certain  aspects of your business processing could affect your eligibility.
  • Email us - The team will not be able to provide specifics, but will take a look at your account and answer any other questions you may have. To email in, go to our “Contact Us” page, click “Square Loans” and then select “I Don’t See My Issue”

Tip: Find helpful tips on what you can do to get noticed by Square Loans.

 

As time goes on, Kaitlyn’s business grows and expands. She now has two storefront locations in her town. She is processing on Square more than ever and has a variety of new and returning customers. She receives a notification on her Square Dashboard that she is eligible again.

 

 

offers.png

 

She decides to apply again and fills out her application information. Three days later she finds out that her business’ application was approved! Kaitlyn will use her funds to help further expand her business by purchasing more inventory for her second location.

 

 

The Fine Print

Square, the Square logo, Square Financial Services, Square Loans, and others are trademarks of Square, Inc. and/or its subsidiaries.  Square Financial Services, Inc. is a wholly owned subsidiary of Square, Inc. All loans are issued by Square Financial Services, Inc. a Utah-Chartered Industrial Bank. Member FDIC. Actual fee depends upon payment card processing history, loan amount and other eligibility factors. A minimum payment of 1/18th of the initial loan balance is required every 60 days and full loan repayment is required within 18 months. Loan eligibility is not guaranteed. All loans are subject to credit approval.

 

 

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17 REPLIES 17

This is Long Overdue, although it wont answer everyone's question; it will take some of the lack of transparency you are able to provide; We all want to be like Kaitlyn 🙂

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I was offered another square capital loan as I was near a pay off of a exiting loan. [Personal Information Redacted] My square account has be outstanding, no charge backs etc. Square Capital informed me to keep processing and assured me I would soon be eligible for another capital loan. That has not happened as of today. I join square because of the square capital benefits I was informed of. I have decided to close my square account and form a relationship with a bank / merchant processor. At least I will know where I stand with a reputable bank. I am looking to expand my business in the near future. I have enjoyed the comfort of a mobile processor at my fingertips, however local banks are providing a mobile processor as well.

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I appreciate this thread but there are still people floating around like myself that aren’t getting any responses back from customer service about square capital. I think a lot of us realize we aren’t getting specifics, but I’d just like to get anything at this point in the way of an answer as to why we still aren’t eligible or if there’s something I should be doing differently other than what’s listed above. 

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Square

Hey @Blckcatbakery! Happy Monday! Thanks for providing your feedback about this thread. For more info about eligibility, you should check out this new Help Center article: Square Loans Loan Eligibility I hope it will give you some of the information you're looking for 🙂 

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Hey there. After years with square capitalI can tell you this is the most cost effective way to run a business and accept credit cards.

Ive gone multiple ways and ALL banks and merchant service processors get you in the fine print.  [redacted]

I have one suggestion...dont refund through square!! Pay them back by check. Ive had multiple loans with square [redacted]. Remember its a machine who decides your loans.

[redacted]

So thats my best advice for my fellow capital strapped friends.

Michele Ring

Riviera Motel

Ample House Rescue Shelter

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Admin

Hi Michele, Helen here from the Community team. Thank you for your post! I noticed your comments included some speculation about how Loans' algorithm works. As the industry is heavily regulated we've edited parts of your post. Also, if you prefer to refund payments outside of Square (by check or cash) you can choose to - but if you want to refund a payment using Square you can do so for up to 120 days after you accepted the payment. 

 

If you have any questions about Square Loans please don't hesitate to give us a call. I'm really glad you've had a good exprience with Loans - and thanks again for being part of the Community!

️ Helen
Seller Community Manager

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interesting! my dashboard just changed, now i can see my income for the last 12 months and my status for payment volume and frequency, sales. Never had this screen before just was a you're not eligible screen before. I am still not eligible but its showing me my status maybe its just an update though. almost 2 years and no offer but hopeful! can't beat the terms 

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I had one loan thru Square Capital and was offered another and took it and paid it off way early, waiting to see now if I will be eligible for another loan. I paid the second loan off about five months early! I wish there was someway to know if you pay one loan off early, when will you become eligible for another loan.  

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Square

Hi @deb8, Thanks so much for reaching out. Congrats on the success of your business and for completing two loans through Square Capital!  Once the loan has been completed, it can take seven days for your business to be re-evaluated for a potential new offer. Please know that we can’t guarantee that you’ll receive a new offer after your loan has been paid off, but if you become eligible, you’ll be notified directly in your Square Dashboard and by email. 

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Hey team does anyone know if you have an option to only pay the monthly minimum at the rate they request, or do they just keep taking 20% continuously until the loan is paid. 

Example: $3,400 in sales @ 20% is $680 which in this example is my loan minimum. Can I ask or somehow stop the 20% being taken from my sales until the 1st of the following month?

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@ravalondel Square automatically will deduct payments even after minimum has been reached, no way to pay just minimum. But you will end up paying loan off earlier this way

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Paying earlier means bad for the business as the fees are the same and the apr would just be higher. And only good for square capital that will have more money to manage and lend to people. Not sure about the convenience of this loan for a brick and mortar business that makes more than $1k per day. 

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Beta Member

My business is very consistent and has been for over 3 years. Even through COVID I was successful, sales barely dropped and I'm nearly 80% complete on my current loan. Could certainly use another significant loan to move into a new commercial property.

The hurry up and wait game is frustrating. 

Ronni M.
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What determines your loan amount ? I’ve had 4 different square capital loans and I always pay them off about 6 months early. I keep saying examples of 20k or higher. I haven’t even gotten a 10k offer yet. I process more credit cards than I do cash 

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Square Community Moderator

Hi @ChefVetrica88 

 

Thank you for reaching out!

 

When determining your business’s customized offers, we consider many factors including your business’s history with Square, processing volume, and progress on any plan that’s currently active.

 

As businesses continue to repay existing loans, we also re-evaluate eligibility for new offers. This helps to ensure a significant portion of a new loan can be used to reinvest in your business directly rather than repaying your existing loan balance.

 

If you have any other questions, please feel free to contact us.   

James C
The Square Banking Team
Sign in and click Mark as Best Answer if my reply answers your question.

Square, the Square logo, Square Financial Services, Square Capital, and others are trademarks of Square, Inc. and/or its subsidiaries. Square Financial Services, Inc. is a wholly owned subsidiary of Square, Inc. All loans are issued by Square Financial Services, Inc. a Utah-Chartered Industrial Bank. Member FDIC. Actual fee depends upon payment card processing history, loan amount and other eligibility factors. A minimum payment of 1/18th of the initial loan balance is required every 60 days and full loan repayment is required within 18 months. Loan eligibility is not guaranteed. All loans are subject to credit approval.
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Please help, I could really use a square capital loan. Nothing has changed on my end and I have not had a loan offer since 2019

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Square Community Moderator

Hi @rzrshop,

 

Thank you for taking the time to post! This is Eric with Square Capital.

 

We thank you for your patience during these difficult times. We understand the challenges you have faced and are proud to partner with a business as resilient and flexible as yours.

 

COVID-19 definitely forced us to take a step back and recognize how this virus changed how our sellers do business. New signals and criteria are consistently incorporated into our lending models to ensure we can best serve you. Eligibility and offer sizing for Square Loans program is based on a variety of factors related to your Square account, including payment processing volume, account history, and payment frequency. More details on eligibility and offer sizing for Square Loans can be found here.

 

While we do not have a specific timeframe for when another loan offer may be available, the Square Loans program will continue to automatically review your account for eligibility. We understand that not being immediately eligible can be frustrating, but we are unable to override the automatic review process with a manual review.

 

I hope this was helpful. If you have any additional questions, please feel free to contact us!


Eric
Square Capital Team
Sign in and click Mark as Best Answer if my reply answers your question.

Square Capital, LLC and Square Financial Services, Inc. are wholly owned subsidiaries of Square, Inc., Square Capital, LLC d/b/a Square Capital of California, LLC in FL, GA, MT, and NY. All loans are issued by either Celtic Bank or Square Financial Services, Inc., both are Utah-Chartered Industrial Banks. Members FDIC, located in Salt Lake City, UT. All loans are subject to credit approval.
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