Why does the payback percentage for Square Loan raise every time?

[ElCuchifrito]

just would like to know because the higher the amount the higher the interest rate

[Peabody830]

i bet they are using a different company to do the Capital deal

[Russell]

Hi @ElCuchifrito & @Peabody830 - 

I want you to both get the best information on this and have asked @LaDora to look into this. Hang tight - keep an eye out for her post. 

[LaDora · Accepted solution]

Hello @ElCuchifrito and @Peabody830 - 

The repayment percentage is directly tied to the loan offer size and designed to help your business grow without being overburdened.  If you would like a lower repayment percentage, you can customize your loan offer in the Dashboard. As you view the options, the fee and hold rate update accordingly.

[thatearlybird]

Why does the percentage rate change when it is an offer for the same loan amount? I look one day and the rate for a loan is 12% days later same amount is 13%. Is the payback rate based on sales that day or some other factor? 

[JanetK]

Hi there @thatearlybird, 👋

Your repayment (payback) rate never changes.

For example, if your repayment rate is 13% of your daily card sales, Square Capital will only deduct 13% for loan repayment purposes. It will never be more or less. 

To see the repayment rate associated with your loan, take a look at your loan agreement. Also, while you're in the Capital section of your Square Dashboard— you can click into your daily repayment to help you correlate! 

[thatearlybird]

I understand once you accept an offer the rate stays the same. I’m asking why the offer rate changes before you accept. A few weeks ago 85k was at a payback rate of 12% now it’s 13%. Just wondered why

[JanetK]

Got it! Thanks for clarifying @thatearlybird!

Square Capital routinely evaluates your Square account for loan offers (even while you have an existing loan offer). You may see changes to your loan offer set depending on changes to your business during the re-evaluation process. 

Your loan offer amount in relation to your repayment rate is dependent on many factors including your Square processing volume and Square payment frequency!

[KayesMiniDs]

This cannot be completely accurate.  I had taken out a second loan through square. Now my third loan offer comes.  Larger than the last as expected, however when I toggle left to see a loan amount equal to what I last took it shows a much higher fee this time.  Percentage payback from daily sales aside, the fee amount itself is much higher. This I am confused about.  I wouldn't take another loan if the fee percentage keeps increasing.

[Cameron_]

Hi @KayesMiniDs, 

Thank you for your comment and being part of the community. 

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. 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.

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 you choose not to move forward with a current offer, your account will continue to be evaluated for offers.

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