Is there a penalty for paying off a loan early? When I did my offer disappeared?

[DestinyRiver]

So this makes absolutely no sense to me but let's see if someone can help me understand the reasoning behind this.

I had a loan with square that I was paying off, during the time I still had one loan - I got an offer for another (2nd) loan.

I (thinking that it would be more favorable for me) logged into my square loans dashboard to pay off the current balance (less than $100) from the first loan. When I logged in I saw the new loan offer there.

I paid the old loan balance.

The new offer immediately switched to inelegible.

Can someone help me make sense of this madness? Why in the world does me paying off a loan a little early cancel out the offer?

It would be helpful if Square could actually tell people that it is a bad thing if for some reason it is in their sight - I only paid off the loan early so I could get a new one, as I am sure many business owners would do.

[Minion]

Hi @DestinyRiver 

Squares algorithm for Loan eligibility and loan amounts, IMO are a bit weird.  I've tried to figure them out to an extent in the past, but simply gave up as it was mind boggling.  

I did the same thing as you did once, I don't believe that I had  a second offer but was testing something and paid off my balance with a manual payment, (from a job, that was invoiced and recorded through Square).  Manual payments don't give you a penalty per say BUT I'm almost positive it doesn't like it when you do those.  

The loan program likes to see Credit Card sales so  they really don't look at a business in a whole, only what is processed via Square.,

Keep processing sales and doing business as usual.  If you had a second offer, My bet (and hopefully for you) that it will show back up in about 3-5 days once the manual payment is done processing.  

[Laura123 · Accepted solution]

Hi @DestinyRiver,

Thanks for taking the time to reach out on the Seller Community. Sorry to hear about the confusion, I'd be happy to explain further. 

If you’d like to submit an additional payment toward your outstanding loan balance, you’re able to do so from your online Square Dashboard. There’s no fee associated with early repayment.

Please note that any loan offers displayed in your Square Dashboard will expire when you make a manual payment.

Once the payment has been submitted, it can take seven days for your business to be re-evaluated for a new offer. This may seem like a long time, but we need to make sure your payment is confirmed. Keep in mind, if you’ve submitted a payment to pay off the remaining balance of your loan, the repayment percentage will not apply while the payment is pending.

We can’t guarantee that you’ll receive a new offer after you make an additional payment or pay off your loan, but if you become eligible, you’ll be notified directly in your Square Dashboard and by email. All payments will be considered final, and can’t be reversed or refunded. 

If you have any questions about Square Loans please contact us directly.

[DestinyRiver]

So can you tell me this, since I had a loan offer (which btw did not reappear after the 7 days) if I had NOT paid off the previous loan balance was there a chance that I would have actually gotten a second loan while still paying for the first one? Does square issue loans to companies that already have existing square loans?

[Laura123]

Hi again @DestinyRiver,

Thanks for your reply. 

It’s important to everyone that lending through Square Banking is done responsibly. We know your business is important and we don’t take that lightly. We want you to be successful and we support your future growth.

To help ensure you get an offer that’s just right for your business, Square Banking reviews accounts on an ongoing basis. Offer eligibility is largely based on current payment processing data, which means eligibility can change as frequently as your business does. Because businesses are dynamic, we’re unable to guarantee or predict Square Loan offers.

There is no specific information we can share at this time because eligibility is based on a unique formula, but keep in mind that we evaluate accounts as a whole. The formula balances different factors of your business that may positively and negatively affect your business’s eligibility for an offer. If your business satisfies one or more of the criteria, your business may still be ineligible if it does not fulfill other eligibility requirements. 

At this time, we can’t predict if or when your business may be eligible for an additional Square Loan, however, we will continue to monitor your account for eligibility. If your business becomes eligible to apply for a loan, we’ll notify you through your Square Dashboard.

If you have any questions about Square Loans please contact us directly.