Square Capital Review: Automated Business Loans
Square Capital is only available for merchants who use Square, but might be an appealing option as it doesn't have credit score requirements or extra fees.
Square Capital

Total Rating | 4.5 |
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Interest Rates & Fees | Good |
Application Process | Excellent |
Sales & Advertising Transparency | Excellent |
Customer Service | Fair |
Reviews, Complaints, & Testimonials | Excellent |
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
Square Capital Overview
Square, the most popular and widely known mobile POS on the market, is an innovator in all things small-business and credit-card-related. It’s been the first, or close to the first, to roll out a mobile payments solution, an EMV-compliant chip card reader, and a mobile wallet, among other things. Given this history, it’s no surprise that Square has also entered the world of fast, automated business loans with Square Capital.
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. Square simply extends the offer to you, and if you choose to accept, the funds will be sent to your account.
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 another offer, or they are ineligible for the service for some reason. If you are in this situation and need a loan, I’d recommend looking at our favorite Square Capital alternatives.
Table of Contents
- What Is Square Capital?
- Services Offered By Square Capital
- Square Capital Borrower Requirements
- Square Capital Interest Rates & Fees
- Square Capital Application Process
- Sales & Advertising Transparency
- Customer Service & Technical Support
- Square Capital Reviews, Complaints, & Testimonials
- Is Square Capital Financing Right For Your Business?
What Is 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.
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 Requirements
These are the qualifications required to get a loan from Square Capital:
Time In Business | N/A |
Credit Score | N/A |
Revenue | $10,000/year |
Additionally, according to Square, you must 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
Be aware that Square Capital is a bit unusual in that you do not apply for a loan; Square extends an offer if you’re eligible. Check out the Application Process section for more information.
Square Capital Interest Rates & Fees
These are the rates and fees for Square Capital’s loan program:
Borrowing Amount | $300-$250,000 |
Term Length | No set maturity date Maximum of 18 months |
Factor Rate | x1.10-x1.16 |
Origination Fee | None |
Effective APR | Learn more |
Collateral | UCC-1 blanket lien for loans over $75,000 |
Square does not use interest rates. Instead, it charges a one-time fee, normally called a “factor rate” or “flat fee,” that is paid back over the life of the loan. Be aware that this means you cannot save money by repaying your loan early (which you would be able to do if the loan had an interest rate).
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. Learn more about how interest rates, fees, terms, and Square Capital renewals work in our detailed guide to Square Capital loan offers.
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. From then on, 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.
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 fairly good idea of what to expect from this service by reading those documents.
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, phone, Facebook message, or Square’s Twitter support page. Additionally, Square has implemented a seller community forum, where you can get answers from Square representatives and other Square sellers.
Square Capital Reviews, Complaints, & Testimonials
Negative Square Capital Reviews & Complaints
In general, the complaints about Square’s payment processing service mostly have to do with account stability issues. The good news is that if you qualify for Square Capital, it means the company believes your business is trustworthy and reliable. Thus, it’s unlikely to initiate any actions that might affect your account’s stability.
Complaints specific to Square Capital are scarce on the processor’s BBB page, but you can scrape together some critiques from across the internet. Here are the aspects of the service with which customers express frustration in their Square Capital reviews:
- Inconsistent Offers: Many customers are frustrated that they do not know when another offer will be extended to them. Because there’s no way to determine when they are likely to receive an offer, merchants cannot necessarily count on having funding when they need it.
- Verification Issues: Some merchants have reported getting rejected because Square could not verify the information they supplied.
- Rejection Due To Unusual Account Behavior: Square Capital likes to see consistency. If your card processing or bank statements show unusual activity over the last few months, you might be rejected for a loan until you can once again prove a consistent pattern of activity.
- Communication Issues: Because Square’s customer service can be tough to get in touch with, solving problems related to the above frustrations might be difficult.
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.
Positive Square Capital Reviews & Testimonials
Square has a couple of video testimonials on its website and several merchant reviews in its Town Square Business Resource Center. You can also find a number of positive reviews across the internet, including in our own comments section. In general, merchants are happiest with the following:
- Convenient Lending Process: Almost ridiculously so since Square makes the offer to you.
- Fast Access To Money: You won’t have to wait long to get your money since you’re essentially preapproved.
- Hands-Off Repayment Method: Since qualified borrowers are already embedded in Square’s ecosystem, the loans require very little additional work to implement.
- Relatively Inexpensive Fees: As short-term loans go, Square Capital’s rates are pretty good.
As you can see, convenience is the keyword when it comes to Square Capital. Merchants like Square Capital because the service makes the lending process easy; once you’ve requested the money, the system will take care of everything else.
Is Square Capital Financing Right For Your 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. You will have to fill out an application, but most of these lenders will be able to give you an estimated quote with minimal hassle.
The Merchant Maverick Seal of Approval 🏆
Square Capital ![]() |
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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 ![]() |
---|
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.
Organization Name: ALMIR CO.
I’ve had the worst experience with square. over 400k was process with them with 2 dispute only.we process over 50k monthly with them, paid them over 1k on fees monthly. had 3 loans paid in full with in 6 month wich is has over 7k in total fees for that loans. recently i recived new loan offer, after i accept the offer they email me saying that they cancel the offer. their loans customer service is the worst, hard to reach a person and when you reach someone is rude and don’t give you any professional answers. overall – BAD EXPERINCE, EXPINSIVE FEES, AND BAD CUSTOMER SERVICE. DO YOU’R SELF A FAVOR AND DON’T DO ANY BUSINESS WITH THEM.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Dun rite lawn maintenance LLC
Was denied for a loan for a failed debit I had in December 2020 but since that date I’ve had 3 other loans all paid in full before the due date so how was a denied for a 4th loan based on a failed debit in 2020 when I recieved 3 loans after that date and none were failed debits also loans were paid off all in full way before the due date .. square never gave me the answer to that they just encourage me to keep processing payments and they wouldnt know when I’ll be eligible again
This comment refers to an earlier version of this review and may be outdated.
So from a legal standpoint is Square Capital an MCA or an actual loan? If you legally close your business and have no more future receivables are you still on the hook or are the considered a non-lender like the MCA’s are?
This comment refers to an earlier version of this review and may be outdated.
Square Capital is an actual loan, so if you close your business you are likely still on the hook. I would recommend looking at your loan agreement or getting in contact with Square to be sure.
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Elite Advertising Solutions
I Love square capital. We got our first loan in February of 2019 and paid 70% of it within 5 weeks when we received another loan offer. We accepted the second offer about 6 weeks ago and we are currently at 64% paid back. Its a great program and extremely helpful for small business owners looking to grow their company. Rates are competitive and easy to pay back. 5 stars
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Corbett Cooling
If you got a new loan at 70% repaid it appears you will pay double interest on the 30% balance. I payed to zero before taking another loan. The problem was I left A $20K Loan on the table for a rainy day. When we had a normal seasonable slowdown and we needed it…it was gone. So now I feel forced to borrow and sit on it in case I need temporary support in starting a new contract. Second, l only profit about 10%. So are they getting all my profit? Sure looks that way. 20k is nice to have as a safety net.
Joe Corbett
This comment refers to an earlier version of this review and may be outdated.
its really hard to find person to talk
This comment refers to an earlier version of this review and may be outdated.
Organization Name: 821939653
How much do you need to make to get approved for 100k. We bring in about 40k nonthly with credit card transactions. And another 40k with government assistance, food program, and cash payments from parents. We are a daycare (8,000sqft) and been with square for almost 2 years. We have received loans for 38k. Wondering if it will go up?? We are wanting to buy another building to start a 2nd daycare.And feedback will help
Thanks
This comment refers to an earlier version of this review and may be outdated.
Hi Philip,
There are some variables here, so we can’t say for sure. That said, you may want to check out this article on Alternatives to Square Capital to see if there are some other options that may be a good fit for your current needs.
This comment refers to an earlier version of this review and may be outdated.
It’s typically 15% of your sales for the last 12 months
This comment refers to an earlier version of this review and may be outdated.
Can you still get a square capital loan for your business if you are personally under bankruptcy separate from the business
This comment refers to an earlier version of this review and may be outdated.
Hi there,
Unfortunately, we don’t know the answer to that question. With that said, I’d suggest reaching out to the Square Seller Community. Good luck to you!
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Village DetAil
Hi I have been using Square now for over seven years and I am a huge fan of square capital. I have successfully repaid seven loans. My only issue is that there is absolutely no rhyme or reason as to when you’re going to be offered in a new loan! The percentage of your current loan being paid off makes no difference I have paid my last loan off now for over six months and even with Covid my sales have increased but I have not received a new offer in 5+ months! I’ve had no chargebacks and I get great customer reviews. It’s a catch twenty two because no other merchant advance company will give an advance if your processing with square because they can’t setup a split on credit card sales. I use the square register, square appointments & square invoices and I don’t want to change credit card processors. However it’s really hard at times to not know if or when I’ll be eligible again considering there’s no transparency from square capital other than a generic “keep processing” reply. Hopefully things change to ease the stress of cash flow when needed. Again I highly recommend Square Capital just understand that there’s no guarantees!
This comment refers to an earlier version of this review and may be outdated.
Organization Name: Magic scissors. Doggie. Spa boutique
I just paid off on June 22. And. Never. Get an offer. That usually. Is. Around. 85%. Paid Are they do renewal loans?
This comment refers to an earlier version of this review and may be outdated.
Hi Hvj,
Square does offer renewal loans, but according to the Seller Community, most merchants are not offered consecutive loans. If you need a business loan, but Square isn’t sending an invitation, take a look at some of our favorite alternatives to Square Capital.
This comment refers to an earlier version of this review and may be outdated.
Did you get an offer after two weeks of being paid off?
This comment refers to an earlier version of this review and may be outdated.