Square Capital Review: Automated Business Loans

Pros

• Borrower qualifications lower than some banks
• No credit score requirements
• Rates can be inexpensive
• No extra fees
• Application process fast and easy

Cons

• Only available to Square sellers
• Low borrowing amounts
• Lien is required for higher borrowing amounts
• Poor customer service

What Is Square Capital?

Square, the most popular and widely known mobile POS on the market, has entered the world of fast, automated business loans with Square Capital. Square Capital is a small-business loan service offered to users of Square products to provide business owners with funds to grow their businesses.

Square Capital is only available to merchants who use Square (or another POS that has a partnership with Square). Because Square is a payment processor and already has plenty of information on your business and finances, Square Capital does not have a lengthy application or an inconvenient repayment process.

Ultimately, Square Capital is a convenient and relatively inexpensive source of capital. However, some customers have expressed frustration, either because they do not know when they will receive a loan offer, or because they are ineligible for the service for some reason.

Services Offered By Square Capital

Square Capital offers short-term loans, although it’s worth pointing out that Square Capital’s financial product isn’t a typical one; it has some traits of a merchant cash advance as well. Essentially, Square will extend you a lump sum, and if you accept, you’ll need to repay that amount plus a flat fee (more on that below) to Square. Repayments are deducted from your daily credit and debit card sales the same as they would be in a merchant cash advance.

Square Capital Borrower Qualifications

These are the qualifications required to get a loan from Square Capital:

According to Square, you must also meet the following requirements:

• Be an active Square user with a growing business
• Have a history with Square
• Have a mix of returning and new customers

The following may disqualify you from receiving an offer from Square:

• Chargebacks
• Failed debits
• Multiple Square accounts
• Account reviews
• Recently declined loan applications

Be aware that Square Capital is a bit unusual in that you do not apply for a loan; you will receive a Square Capital loan offer if you’re eligible. Check out the Application Process section for more information.

Square Capital Rates & Fees

These are the rates and fees for Square Capital’s loan program:

According to the Wall Street Journal, the factor rates offered by Square are typically between 1.10 and 1.16, which means that you will have to repay between $0.10 and $0.16 in fees per dollar borrowed. Square will disclose your borrowing fee before you accept the loan.

Because the loans are repaid by deducting a percentage of your credit card sales (which fluctuate day-to-day), there is no set date on which your loan will be repaid. However, you do have a maximum of 18 months to repay your loan. To keep you on track, you have to repay at least 1/18th of your loan every 60 days. If your daily card sales cannot cover the minimum amount, Square Capital may debit a bank account you have linked to Square. Merchants also have the option of making additional payments or paying off the loan at any time.

Square does not require collateral for loans up to $75,000. For loans exceeding $75,000, a blanket lien is required.

Square Capital Application Process

Square monitors user accounts to determine if a business is eligible for a Square business loan. If your account is eligible, you will receive an email and a notification on your Square account. You can find your offers under the Capital tab in your account.

Once you receive the alert from Square, getting the money is pretty straightforward: simply decide how much you want from the options presented to you and request the funds. Square will use all the information it already has to verify your identity, though a rep might reach out to ask for additional documents if necessary. This lender will not check your credit to make a decision, so you do not need to worry about a credit check affecting your score.

Once Square has verified your information, the money will be deposited into the bank account hooked up to your Square account within one to three business days. After you receive the loan, Square will automatically deduct its cut from any credit or debit transactions you process through its service. If you want to repay part or all of the loan, you can do so via the Capital tab on your dashboard.

Square Capital Sales & Advertising Transparency

Square provides a fair amount of information via the main Square Capital web page and the Square Capital support center. You should have a good idea of what to expect from this service by reading those documents.

Square Capital Customer Service & Technical Support

Although Square’s customer service has been lacking in the past, Square has drastically improved its customer support in the last few years. There are a few different ways to contact Square, including email, live chat, phone, Facebook, and Twitter. Additionally, Square has implemented a seller community forum, where you can get answers from Square representatives and other Square sellers.

Square Capital User Reviews

Square gets mainly positive reviews for its small business loans, boasting a 4.2/5 rating (based on 1,200+ reviews) on Trustpilot. There are also several video testimonials on its website and several merchant reviews in its Town Square Business Resource Center. However, there are a few negative reviews that are worth noting before you agree to a Square Capital loan.

Negative Square Capital Reviews & Complaints

Here are the aspects of the service with which customers express frustration in their Square Capital reviews:

• Inconsistent loan offers
• Rejections due to verification issues
• Rejections due to unusual account behavior
• Difficulties getting in touch with customer service

Positive Reviews & Testimonials

In general, merchants are happiest with the following:

• Convenient lending process
• Fast access to money
• Hands-off repayment method
• Relatively inexpensive fees

Final Verdict: Is A Square Capital Loan The Best Option For Your Small Business?

If you are eligible, Square Capital is a convenient and relatively inexpensive source of financing. This company has streamlined the lending process, so it’s almost entirely hands-off. You don’t need to fill out a lengthy application or remember to write checks every payment period.

However, Square Capital is not without problems. If you have been denied a loan or Square Capital is too undependable for your business, you do have other options available.

It’s also worth noting that if your business is doing well enough to be eligible for this service, it might be time to switch to your very own merchant account. If you accept an advance from Square, you’re tied down until you repay the company. That said, if you need short-term financing, Square offers a very compelling deal. Sticking around for a few extra months might be worth it.

FAQs: Square Capital Loans

The Merchant Maverick Seal of Approval 🏆

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After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Square Capital for yourself.

The Merchant Maverick Seal of Approval 🏆

Square Capital	Visit Site

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Square Capital for yourself.

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