Problems with Square Loans

[Eclatmedspa]

I’ve noticed that many people are having problems with Square Loans but the threads keep getting erased by Square. So I got a $7500 loan from Square to help with my business relocation. Square charged me a 12% loan fee and I was to have 18 months to repay. The terms were that they would take a little under 11% of my daily receipts for repayment . Well here we are less than 3 months from when my loan originated and Square has docked my receipts so much nearly 40% of the loan has been repaid . Additionally I’ve noticed since the loan payments started money has gone missing . The sales, less fees and loan payments do NOT add up to what is transferred to me daily . Wondering if I need to report this to the FTC

[Minion]

Hey @Eclatmedspa 

Sorry to hear about your problem with this. Have you tried to contact Square Support and the Capital Team to try and figure out what is going on and why things aren't adding up?

[Eclatmedspa]

Yes of course I have. The responses I get dance around the subject, with no explanation of where the missing funds are going . 

[Cameron_]

Hi @Eclatmedspa, 

Thank you for raising your question in the Community. I'll be happy to explain. 

One of the benefits of a Square Loan is flexible repayments—paying a fixed percentage of daily card sales allows you to pay more when you’re busy and less if things slow down. There are also minimum payment requirements. You’re required to pay at least 1/18 of your initial loan balance every 60 days. If you have fulfilled the minimum payment requirement, the hold rate will continue to be applied to your daily card sales until your loan is paid in full. Please note that your full loan balance must be repaid in full within 18 months of the acceptance date.

You can reference the loan agreement in your original Square Loan confirmation email. You can also view this information in your online Square Dashboard.

The percentage of your business’s daily card sales is tied to the size of your loan. Increasing the repayment percentage of your business’s daily card sales can provide your business access to larger offer sizes. This is one of the top requests we’ve heard from sellers like you.

You will also have the option to customize your loan offer in your Square Dashboard. The smaller the loan offer size you request, the smaller the daily repayment rate will be.

This repayment percentage is not an interest rate. In fact, there are no ongoing interest changes for your loan. The total borrowing cost of the loan is a fixed fee (the fee is the difference between the total owed and loan amount).

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

[Eclatmedspa]

Cameron, my payments are OVER fulfilling the minimum loan payment, and yet more is taken. When a business owner initiates a loan and agrees to pay 11% of daily receipts, that's all that should be taken by the lender. Don't make it seem there are no fees involved; while there may not be an interest rate per se, there is a service charge which is approximately 12% of the loan amount, meaning I'm required to pay back 112% of what I borrowed.  

Your response is skirting the most concerning issue, namely why are funds missing in daily transfers? From my gross receipts Square is taking its loan payment and fees then sending me a payment which is LESS than the remaining balance. 

[Cameron_]

Hi @Eclatmedspa, 

I'm sorry to hear about that.

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

We look forward to hearing from you.