Is SBA replacing the Square Loans?

[RadioMcG]

We haven't received another loan offer - which I find odd because we are 100% paid off on the last one and typically see an additional offer at 80% or so.  All numbers are significantly up as well. Has anyone else noticed no offer? Or am I just stuck in unknown algorithm for now?

[Regina_B · Accepted solution]

👋👋Hey @RadioMcG and @ecantiques5

Thank you both for your posts. Regina from the Square Loans Team here. Given the current economic challenges facing many small businesses, we’ve had to reduce our Square Loans loan offers to uphold our mission of responsible lending. To help our sellers through this time, we are working with sellers who need payment relief on existing Square Loans loans outstanding. 

Though we may not be able to extend a loan offer through Square Loans right now, teams across Square are unveiling new ways to support businesses’ need for cash flow, and our team is extremely focused on bringing the SBA’s Paycheck Protection Program to our sellers. We also have a dedicated team researching new resources and are updating this list weekly. Here’s the link: Square Loans COVID-19 Business Financing Resources Support Center article. 

For more information about PPP, please take a look at our FAQ. Thanks again and take good care. 

[RadioMcG · Accepted solution]

HERE IS A COPY AND PASTE from a response posted today in the Square Loans section. Passing on the info I read, if you haven't seen it!

To the Square Community,

As we relaunch business loans, we’d like to explain why loan offers were unfortunately paused at the beginning of COVID-19.

First and foremost, we should have been more open with you about pausing business loans, and why it was necessary. We understand the timing was tough for many. We don’t like disappointing, and we know we did. We want to be more open with you about our business, and the lending industry as a whole, so you might understand why loan offers were paused.

Like many businesses, we were unprepared for a full-industry shutdown at the onset of COVID. Pausing loans until we could update our product to better measure the impact of government shutdowns on small businesses, as well as on our own, was the responsible decision.

Our ability to offer access to loans relies on backing from financial partners. When the COVID crisis began to unfold, it became clear that lending in that moment could possibly be irresponsible—for us and our partners, but also for the businesses receiving loans. While it’s true pausing loans was a business decision, we also never want to put any business in a potentially risky financial position. Our mission to better serve small businesses during times like these has further pushed us to start our own bank, which will debut in early 2021. We’ll be the first ILC bank charter issued in 14 years—enabling us to build and run our own bank systems designed for businesses like yours.

While pausing loans was a difficult decision, we saw another way to assist more small businesses through this crisis: We quickly shifted our resources to help over 75,000 small businesses access Paycheck Protection Program (PPP) loans through the SBA. At the time, PPP offered a sustainable way to access funding during COVID.

As of now, the business market has stabilized to where we can responsibly offer loan access to some businesses. However, eligibility criteria has been tightened. If you previously qualified for an offer, that may no longer be the case. Please know we are reviewing all of these factors regularly, your offer status could change soon. If you do become eligible, we’ll send you an email, and notify you on your dashboard.

Like everyone, our goal is to work our way back to normal. But right now, our main focus is on responsibly providing the Square community with access to funding, and making sure we communicate with you—openly, candidly—along the way.

We can’t thank you enough for your patience. We’re glad to be back to support your business, and we’ll keep you updated as we move forward. Expect to hear more from us soon.

Be well,

Jackie Reses

Square Loans

[MandiesMagical3]

I’m disheartened that not only did I make it through COVID I’m actually doing amazing and making more! I had a month of hardly any sales, just one! Then it started coming in again. I have had 8 loans! 

I understand they don’t have to give a loan to any of us but, it is disheartening and I think it would be in good business to be honest and communicate that they are not giving many offers so people could plan and not sit on Hope. 

I will be fine either way but I really wish there would be more transparency. Good luck! I’m proud of you for surviving with business! It was not easy and it was depressing but made us stronger! 

[Amye22]

Yes. I too feel like they are not upfront. My friend who uses PayPal just got a loan about triple what they expected. We have used both PayPal and Square and I feel like PayPal offers more and we were never once turned down. It was automatic when you paid your loan off you instantly were asked if you wanted another loan and it took minutes and the money was in our PayPal account. I think start to finish maybe 5 minutes. Square is lacking in that department. However PayPal I feel like has a higher payback percentage. 

[Wvcupcake]

if they have done away with the program than they need to let us know. People like us who have responsibly use this program for many years and absolutely count on it to run our businesses need to know accurate information. I have reached out twice and both times I was told that when I became eligible I would see my offer. Well I am more than past eligible as are a lot of you and still nothing. If they've done away with the program they need to be upfront and let us know. We are paying into this support and it is absolutely normal that we would expect to be able to count on it. I have touted square to every small business owner I know for 10 years almost, and I am very discouraged and disappointed right now and the lack of support.

[Sheelah]

Good reminder that we have other options! Ive only stuck with Square because of the loans.  When mine hits 0, if no other offer,  I'll switch to Ivy Pay. 

[Collegehelp]

I cannot find a single company which has secured a Capital loan on this feed.  I have paid off every loan I ever took from Square Capital, always early and always in full.  Never missed a required minimum and always exceeded them.  Now nothing.  Just boiler plate emails about alogrithms, etc.  Anyone having any better success?

[TheSavvyDog]

There have been several businesses that have posted that they have received Capital loan offers....but they have been GREATLY reduced amounts, compared to previous offers.  Ours was about 1/5 what we'd been offered in the past.  We've paid off over $300k in loans and have processed several million in CC sales.  I have no clue what their new algorithm entails.  But some are still getting loan offers....and it has nothing to do with what states were closed down, etc.  We're in Washington, and were one of the states and industries highly affected.

Good luck.

[Collegehelp]

I, too, have had several capital loans, totally well in excess of six figures.  paid off everything early and in full.  now... crickets.  I am actually looking to the bank I use for business now as an alternative for taking CC payments

[vitamingal]

I was approved in April and they cancelled the approval 2 days later.  I always paid up ahead of schedule, months in advance....very upsetting

[DDS]

Oh I feel your pain!! I am in the same boat! Always paid ahead of time,  Way before the due date.... Square is not being loyal to it's loyal customers! so what if some people took advantage of the PPP process to better off their business. That does not mean that it's not going to be forgiven or they cannot handle it..

And I'm sorry that the some entrepreneurs are not paying their bill... But it's not right to make everyone suffer ...

We did not do this to ourselves! The government did this to all of us! and I know I would appreciate it if square capital was transparent and honest instead of giving people the runaround. Just say how it is..

[Lexus2]

Hello guys am here as frustrated and disappointed just like everyone else with square.i finished a loan of $20,000.00 and i was expecting to get a new loan offer of about $25,000.00 or more but to my surprise i have just received an offer of $4,000.00!! This is totally unacceptable and bad for business,i wont accept their $4k offer they can keep their money,for now am looking for a new partner.

[Jwp32708]

Square Capital, you better "tighten up"! Your clientele base is speaking up and getting mad.

[RCS-Automotive]

I just want to say that i did receive a loan while this was all going on it came at a much later time than normal. Normally around 80% payback i would get another offer this time i was at 97% and the loan amount was 1/3 of what it would have been post covid but i did receive a loan.

[Regina_B · Accepted solution]

👋👋Hey @RadioMcG and @ecantiques5

Thank you both for your posts. Regina from the Square Loans Team here. Given the current economic challenges facing many small businesses, we’ve had to reduce our Square Loans loan offers to uphold our mission of responsible lending. To help our sellers through this time, we are working with sellers who need payment relief on existing Square Loans loans outstanding. 

Though we may not be able to extend a loan offer through Square Loans right now, teams across Square are unveiling new ways to support businesses’ need for cash flow, and our team is extremely focused on bringing the SBA’s Paycheck Protection Program to our sellers. We also have a dedicated team researching new resources and are updating this list weekly. Here’s the link: Square Loans COVID-19 Business Financing Resources Support Center article. 

For more information about PPP, please take a look at our FAQ. Thanks again and take good care. 

[murrietaPC]

This is the first time iI read  square employee admitting what we knew all along

I know local people still getting Paypal working capital loans, I would have never expected Paypal to do better than Square to be honest.

I used to process with both and then decided to stick with square for my local needs and Paypal for Ebay ( minimal action for me there), I reveived and paid a couple of loans there, and so far, sucessfully paid 12 loans with Square and the last one was paid 6 months in advance, just to end up with no offers.

Guess who will start using Paypal processing more starting today..... 😉

[Joe]

We appreciate your honesty, @murrietaPC - and we do also understand that you have to do what is best for your business during this uncertain time.

We hope to be able to bounce back here soon with regards to helpful updates about Capital Loans and new offers. Until then, feel free to reach out if you have any specific questions. We are here to help!

[Jenn317]

It's been a month since you posted that response. How about an update? I assume you have hundreds if not thousands of sellers who relied on the capital partnership, and in one of the most challenging economic times -- you abandoned all of them (including me). I wish there was a way for us to formally protest your lack of transparency. I would love to set a date and if there is no clear communication with a timeline and plan of action, we stop processing (or something of that nature). I realize this would have an adverse effect on the sellers too, but just imagine if we all united and decided that for a  a couple of days we would ALL stop processing payments. There has to be a way to command attention and get the answers that people have been asking for months. The fact that you continue to say that you are here to answer questions, yet you tiptoe around the ONE question everyone is asking -- it's a horrible way to do business. You are banking on the idea that (1) no one has time to research and move to another processor (2) if we  do move to another processor, it will take time to establish history and become eligible for capital, and  (3) many of your competitors have also stopped offering their capital loan programs. 

Does anyone else have ideas for how we can unify, find strength in numbers, and command some attention here? 

[ecantiques5]

@Jenn317 

I just feel it is a real shame that Square has treated their sellers like this. It is so disappointing & disturbing. As soon as I can I am going to force myself to take the time to research alternatives.

Wishing you the best. Stay strong & follow your dreams😊

[Leelee]

Centurybizsoloutions is something to read about and consider. 

[swdw77777]

This situation is like the movie with Chevy Chase, Christmas Vacation. When Clarks boss decided to stop Christmas bonuses without telling anyone, which they had begun to rely on as part of their income. Then you have good ole cousin Eddie that comes in and saves the day by going straight to the head of the problem and calls him out on it. Maybe there is a way to get straight to the top and find answers. 

In the meantime some businesses didn't qualify for enough if any at all of the PPP loans, and are suffering to all ends now. My business is not quite 2 years old and because I used 1099's for my payroll they went by my profit and loss on schedule C from taxes. Now you tell me how many businesses show a significant amount of profit their 1st year if any. So you know it will not be much the next year, So the Government screwed us that way, as well as Capital screwing us by cutting out their loans too. Good luck to us all!

[Wvcupcake]

Joe, so since today is actually June 25th. And not realizing that you guys had put a halt on Capital offers I find myself in a very difficult position. Having counted routinely on this influx of capital into my business for almost seven years now with no problems you can understand why I would come to count on that. so bottom line is as of June 25th are you actually giving Capital offers? Or should I try to do something else? PPP was funded by the government, so I certainly know that you guys had to process those loans by that to me is different than the capital program? I really need a straight answer on this because if I don't get this Capital I'm probably going to have to close.

[JP9]

When will Capital loans be offered again?  I cannot get my business up and going again without it.