Is SBA replacing the Square Loans?

[RadioMcG]

We haven't received another loan offer - which I find odd because we are 100% paid off on the last one and typically see an additional offer at 80% or so.  All numbers are significantly up as well. Has anyone else noticed no offer? Or am I just stuck in unknown algorithm for now?

[Regina_B · Accepted solution]

👋👋Hey @RadioMcG and @ecantiques5

Thank you both for your posts. Regina from the Square Loans Team here. Given the current economic challenges facing many small businesses, we’ve had to reduce our Square Loans loan offers to uphold our mission of responsible lending. To help our sellers through this time, we are working with sellers who need payment relief on existing Square Loans loans outstanding. 

Though we may not be able to extend a loan offer through Square Loans right now, teams across Square are unveiling new ways to support businesses’ need for cash flow, and our team is extremely focused on bringing the SBA’s Paycheck Protection Program to our sellers. We also have a dedicated team researching new resources and are updating this list weekly. Here’s the link: Square Loans COVID-19 Business Financing Resources Support Center article. 

For more information about PPP, please take a look at our FAQ. Thanks again and take good care. 

[RadioMcG · Accepted solution]

HERE IS A COPY AND PASTE from a response posted today in the Square Loans section. Passing on the info I read, if you haven't seen it!

To the Square Community,

As we relaunch business loans, we’d like to explain why loan offers were unfortunately paused at the beginning of COVID-19.

First and foremost, we should have been more open with you about pausing business loans, and why it was necessary. We understand the timing was tough for many. We don’t like disappointing, and we know we did. We want to be more open with you about our business, and the lending industry as a whole, so you might understand why loan offers were paused.

Like many businesses, we were unprepared for a full-industry shutdown at the onset of COVID. Pausing loans until we could update our product to better measure the impact of government shutdowns on small businesses, as well as on our own, was the responsible decision.

Our ability to offer access to loans relies on backing from financial partners. When the COVID crisis began to unfold, it became clear that lending in that moment could possibly be irresponsible—for us and our partners, but also for the businesses receiving loans. While it’s true pausing loans was a business decision, we also never want to put any business in a potentially risky financial position. Our mission to better serve small businesses during times like these has further pushed us to start our own bank, which will debut in early 2021. We’ll be the first ILC bank charter issued in 14 years—enabling us to build and run our own bank systems designed for businesses like yours.

While pausing loans was a difficult decision, we saw another way to assist more small businesses through this crisis: We quickly shifted our resources to help over 75,000 small businesses access Paycheck Protection Program (PPP) loans through the SBA. At the time, PPP offered a sustainable way to access funding during COVID.

As of now, the business market has stabilized to where we can responsibly offer loan access to some businesses. However, eligibility criteria has been tightened. If you previously qualified for an offer, that may no longer be the case. Please know we are reviewing all of these factors regularly, your offer status could change soon. If you do become eligible, we’ll send you an email, and notify you on your dashboard.

Like everyone, our goal is to work our way back to normal. But right now, our main focus is on responsibly providing the Square community with access to funding, and making sure we communicate with you—openly, candidly—along the way.

We can’t thank you enough for your patience. We’re glad to be back to support your business, and we’ll keep you updated as we move forward. Expect to hear more from us soon.

Be well,

Jackie Reses

Square Loans

[SullivanBlue]

its been since the 31s for me with no offers I paid it off months early in a lump sum. 

[ChrisnTrish]

Our business has been consistently progressing during covid. We are busier than ever. We even opened another business in April and a second square account. So far this business is progressing nicely. We have had 4 previous loans with square, all paid off early. There is $300 left on our current loan and we have yet to receive a new offer. We are ready to expand more,  and square customer support can only tell us that they are reviewing daily and have started offering loans again. If we are not qualified to receive one then I don't know who is.  Very disappointing. 

[SullivanBlue]

Whats crazy is they have no excuse. They are rocking right now. stock is high as crap their earnings are through the roof yet they are holding loans back. They are doing like all these big banks and companies are doing. Playing the pandemic card to the fullest. When they themselves probably got a HUGE PPP loan. Add them to the list of big corporation playing off the little man. 

[TheRealChipA]

Warning... LONG POST! 😂

I’m going to add my two-cents worth here.  This comes from 40-plus years owning businesses through various downturns, recessions and such.  Before I do, I’ll preface this post with this — I have had about a half-dozen Square Capital loans over the years.  All of them, including my current one that is almost paid off, show that I have never had a problem with paying them off according to the terms given, even during COVID.  Yes, my business is down 30% over last year, and nearly 50% over the past two months, but at least I am still in business.  I have tightened my belt and cut expenses to the bone (I’m 60 and working 70+ hours a week).  Somehow, it is all working, and not only is my current Capital loan nearly paid off (less than 3 weeks to go), but I’ve nearly paid off all of my debt, period.

Now... here’s what I’ve seen in the credit market over the past 5 months.  No one is lending for non-guaranteed purposes.  Unless a bank has a horse in the race — ie - a house, a share of the business, collateral of some type — the funds are just not there, period.  Square doesn’t actually lend their own money, but they get the funds from a third party bank.  Therefore they are completely at the mercy of said third party bank, for now.

Besides my cafe, I also own an historical property redevelopment company.  Pre-COVID, I opened a multi-million dollar line of credit and provided my investment/retirement accounts as collateral.  Once COVID hit, my investments took a major hit so my access to that line of credit is currently restricted so that I don’t get in over my head, so to speak.  Besides that line of credit, I’ve found all other credit lines, and credit cards, with diminishing available balances and expect that they all will continue to be reduced for the foreseeable future.  Thankfully, even though I can not access my lines of credit, the interest rates on all of them are at stupidly crazy lows.

Even banks/lenders that I have a multi-decade relationship with are not lending right now.  It’s not because I’m not good for it.  I am good for it, and they all know it.  But given the incredible uncertainty of the times, they won’t take the chance.  Anyone paying attention to the current COVID situation knows that even tomorrow is not guaranteed for any of us that own a business.  It wouldn’t matter if every business was allowed to re-open at 100% capacity with no restrictions tomorrow, and it stayed that way.  Until the general public is comfortable, and until the unemployment rate is reasonable again, and until a quarter of the population is no longer in danger of being homeless and hungry, we are where we are.  Lending is a risky business in the best of times, and right now it is insanely risky.  Uncertainties is the enemy of the banking business.

I’m choosing to assume, and plan under the assumption, that I will not have any credit available anytime soon.  I’m paying off all debt as quickly as I can.  And I’m only planning to spend what I reasonably foresee as possible (cash only) for the next two years.  I consider this to be wise and prudent.  I have decided to live in the here-and-now — not the past which is gone, or the future that I hope happens.  Everything has changed, and it is not going to go back to where it was ever.  Heck, I’m even working on a business plan to change my business model starting next year, knowing that my current model is outdated.  That, as they say, is reality.  My previous credit rating and history is meaningless in the age of COVID.  That is a fact.

Having said all of that, I must WHOLEHEARTEDLY agree with something that has been said on this post and other posts too many times.  Square needs to work on communication.  Square needs to work on being transparent, open, honest and straightforward with all of their sellers. They are not even close to this ideal. However, Square is not alone in this deficiency.  Most companies of the 21st century have no clue how important real communication is.  Instead of honesty and transparency, they create scripts for their employees to use, and woe be unto any employee who deviates from the company-line.  Square isn’t any better — or any worse — than all the rest.  However, if they really want to set themselves apart from the rest, they would invest in a customer service team that actually helps customers with their issues, rather than a team that just follows the script.

That’s my two-cents worth.😎

[Jwp32708]

Chip,

You are correct that the credit market has tightened up, but it has not shut down. I get e-mails daily for lending. Typically, they will request 3-6 months of bank statements. They are "non-traditional" lenders such as Square Capital, so the rates that they will charge will higher than traditional bank rates. Also, like Square Capital, they are short term loans, typically 6-8 months in length, with a standard daily withdrawer amount, rather than a percentage of each credit card transaction. I just received $26k, which is perfect for my needs as of current.

Unlike Square Capital, location is not a determining factor whether a loan is able to be made, but your ability to pay.

Square Capital has all the information they need whether a business is creditworthy or not, they see what your daily sales are via debit/credit card transactions.

Square Capital has really screwed up they way they handled things. Their lack of transparancy has hurt their brand.

Until we see a significant number of people on the forum saying that they are being approved for loans (based on criteria that shows that they were not affected by Covid-19, and that they had the ability to continue pay their loans), all I can say is that Square's loyal customer base will be forever be affected by the actions of Square Capital.

[TheSavvyDog]

You are absolutely correct.  This morning I cleared over 30 messages from lenders wanting my business.  Rates from 3-12%, based upon bank statements from the last 3-6 months.  Payments ranging from daily, to weekly and fix monthly...as well as pay off schedules ranging from 6 months to 5 years.  

We've been with Square since it's infancy.   We process *consistently* and we process a fairly good sum monthly.  Square has made about $80k from our business.  It's been a good "partnership."  Like most, transparency is what we are looking for...and it's been disappointing, to say the least, to see NONE this past few months.

[TheRealChipA]

I will admit to standing corrected.  True, there is credit available.  I just tend to discount/ignore non-traditional lenders from whom I get unsolicited offers.  I have used Square because of the existing business relationship.  Having tried other non-traditional lenders I don’t even give a second look to their offers.  So, I will admit to cherry picking and focusing on traditional lenders in my original post.

Otherwise, I don’t disagree with you about the recent (in)actions of Square Capital.  It’s hard to dispute the facts from so many, including myself, about their absence from the conversation and from being a part of any solution.

I’m glad that you found someone to work with you, @Jwp32708 .  Best wishes.

[Jwp32708]

Chip,

With regards to "non-traditional" lenders, Square Capital is also a "non-traditional" lender. They do MCA or Merchant Cash Advances. The rates that Square Capital charges is far higher than traditional banks.

Just like you, I was loyal to Square Capital. I realized that the price to borrow money from them was higher than traditional banks, but the ability to receive short term funding without providing my "first born" that traditional banks requires, made Square Capital appealing.

Unfortunately what we are seeing now, where you would think that loyalty and developing a long-term relationship would go far, it doesn't go both ways.

The lack of transparancy and holding of a "carrot at the end of the stick" to its customers with the hopes that Square Capital would resume operations, or at least be more specific with their plans instead of holding their customers hostage wondering when they will seen their next offer from Square Capital.

[bigpoppi]

@TheRealChipA @RadioMcG @Jwp32708 

Yes,  with interest rates where they are at there is a lot of money out there.

I have had two business accounts with Square since the beginning. One I've had 8 loans and just finished paying off, ahead of time like usual.

The other has a remaining balance under 1K and will also be paid off way under the 18-months they give you. This account has had 4.

I'm an essential business and all online so where I'm located has no bearing and during the lock down my numbers were bigger than last year...all trending up.

No reason for me not to have had another offer except my mailing address is in a Phase 1, maybe 2 location within NorCal. So if they are using that as a reason then I'm screwed. 

If you're strictly ecom them location should not be a factor at all, only your processing numbers... 

[RadioMcG]

We are getting ready to just throw our hands up and say "so long". We have been our busiest since covid-19 because we are solely internet based. I am super disappointed because the capital is an amazing opportunity for growth right now. No one getting offers is a huge clue that it just isn't happening. I was hopeful for August, now I am just being realistic. 

[Jwp32708]

There has to be a way to contact Jackie Reses directly who is in charge of Square Capital to share our concerns and get a direct answer as to the future of Square Capital and realistic time frames.

[Jwp32708]

Saw this online this evening. 

https://debanked.com/2020/08/square-capital-resumes-business-lending/

[RadioMcG]

Let's hope this means that more will begin to see offers. It seems the "stricter criteria" means near impossible, as so many here have reported an increase in business. 

[Ms_Misty]

Chip,

It might’ve been a long post but very informative😊 And I think you’re definitely right. 

My loan payoff is around the corner and I’ve decided to leave square once that loan is done. 
The lack of transparency, and most importantly common courtesy, is astounding. Whatever plans they have for the future with square and square capital will be greatly impacted by the loss of loyal customers. And that should’ve been taken into consideration. I will gladly give my money to someone else. I’m looking forward to it. Or keeping it for myself lol. I’ve said before that I don’t have to take cards. 

I’ve been having problems with delayed email verifications for processing and capital information for the last few months.

And just this past Thursday they didn’t process my instant transfer. The money is being held up until Monday, if you can believe it. I don’t know what the hell is going on, but it is definitely shaking my confidence in square. What else is there to say?

[Gunsmith12]

Is there any updates on Square processing Capital Loans?

[SullivanBlue]

Im paid in full 10 days ago and still no offer. Paid off months faster than they requested. My sales are up 40% and still going. I have a 60-70% new customer base. My business is growing like crazy but still nothing. I believe they are playing the pandemic card despite the 64% increase in their revenue. 

[ZHEMIZ2]

as i post im at 91% percent paid on my current loan, which is the 9th, no offers yet, i just read the 25 pages and comments and make me think about what i love from square (NO CALLS TO OFFER SERVICES AND SQUARE CAPITAL), well long story short in my almost 59 months of being with square i paid $47,390 in processing fees and $32,748 in Square Capital Fees, c'mon square made with our growing business $80,138.00,will be way cheaper going with a traditional bank but we stick with square because Capital, Installments and the ability to use the money collected right away with SquareCard, now Installments gone, Capital looks dead, we will analize like you guys the possibility of switching to Paypal or traditional Banking, hope square get back on track with loyal growing customers

[ChrisnTrish]

The biggest reason I stay with them is because of square capital. I owe about $120 which will be paid with Mondays weekend deposits. If I'm not offered another loan I will change company's by end of week to someone with way lower fees. It's bs because this is the 4th loan I've paid off super rapidly. We actually got busier thru all this covid stuff. I feel like many of U that they are crazy not to offer our thriving business a loan. We even opened our second location at the beginning of March which is already doing decent. I do like square a lot though with all the new features they put out. It will definitely  be their loss as a lot of businesses start dropping them.

[Jwp32708]

I've had 9 loans through Square Capital since 2014 totaling nearly $180k. We paid the last one off in April 2020. Not received an offer as of yet. Sad thing is that our business has done nearly $2M in credit card transactions since being with Square. You would think that someone from Square would read all these concerns and respond. All I hear is crickets!

[brown17]

Has anyone received a Capital Loan since this whole pandemic?   I have been working all along, Loans are paid off never late paid off early.   Last time i was offered a loan before paying first one off.  I meet all the criteria and my state has limited restrictions.   I am not sure what is going on. 

[Spector]

Yes! Recently received a loan offer and approval for about half of previous loan. Same process as before, I don’t think we can blame Square with what’s going on. 

onward and upward a little bit at a time!