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

[ErinAkey]

Yes, we have paid off 5 loans all early and never gone this deep into one without a new offer.  We survived COVID and have somethings we need to do and I was told when I called that capital offers are still going out.  Now I come here and am so saddened to read that they are not.  I have turned down offers to move my POS away from Capital because we love this partnership and it has helped us expand.  If this program is gone we will definitely be considering a move.

[247TIRE]

Agreed, I've paid all my loans successfully. It amazes me that square hadn't offered another loan even though our numbers are through the roof being an essential business and such. PayPal doesn't sound like a bad idea though.

[RadioMcG]

My issue is I am still working to submit taxes for 18 & 19 (which is my issue of course, not yours) but it doesn't help me right now in terms of using SBA or PPP. So it is a real bummer that with my business currently having the best 2 months I have had with all numbers up, that capital isn't here to continue to help support this new growth. Missed opportunities. 

[ecantiques5]

@Regina_B 

Like other fellow sellers that have been forced to expend energy trying to get what the common folks call a " straight " answer, thank you for posting the Square response. When the capital offers to eligible sellers started vanishing from dashboards it would be understandable that to protect Square's interest you would pull those offers. There was imminent uncertainty that the eligible at the time seller might not be able to produce revenue to support payback percentages. 

Here is what Square has offered during this situation.

Videos on social media of sellers  giving advice, strategies or asking for donations. 

Refunding of certain monthly subscriptions( not real sure of which ones or what the actual monetary offset for sellers this translated to)  But at best a minimal offset

Deferment of required monthly payment percentages via automatic debits to linked accounts. (There was great confusion that many sellers actually thought Square was waiving %'s on all processed capital repayments during this situation) but no the relief was only for capital payments being auto deducted from your linked account. 

6-8 weeks into the crisis & one full round of the SBA program had been exhausted, Square was finally approved to be a facilitator for PPP. Only for many sellers to apply through Square and have Square calculate much lower eligible amounts than what sellers would be eligible for if going through their business bank( direct link to SBA).

We applied to our local business bank with the same documentation  about 5 days before Square sent an " invite " to apply. Square encouraged sellers to apply with both( not sure why) I was shocked when the PPP calculation from Square was drastically lower than what our local bank calculated directly through the SBA.

Thank God our Bank got through for us first & secured the true actual amount we were eligible for. A couple days later Square sent an email stating that even though Square had approved  our application the SBA already had a request for PPP for our business. 

So here we are.... working with square since 2013 still selling, still producing, 93% paid back on #10 square capital loan.  Square via Regina indicates they stopped the capital program to ensure "responsible lending". But Square Capital has been horribly irresponsible to it's RESPONSIBLE sellers.  Thought it was always a black & white algorithm guys( keep processing,  keep clients, get new clients, no chargebacks, no failed debits) ??? No...you just do what works for you. Its not fair its not right, and it will, I hope, be rectified by sellers in turn seeking processing that at least rewards consistent seller efforts. Even more so in a event like businesses have encountered this year.

[Leelee]

Leelee

2 seconds ago

Centurybizsoloutions is something to read about and consider. 

REPLY

[Leelee]

Centurybizsoloutions is something to read about and consider. 

[Fabanich]

Pay Anywhere is amazing!!  And much better fee scale and no contract!! 

Just saying!! 

[Jerisieber]

When do expect Square to reinstate Square Capital And start offering Capital loans again??

[ecantiques5]

@Jerisieber 

I would only expect Square Capital reinstatement when Square would decide they want to reinstate it. I would expect them to exploit the SBA's PPP program and then maybe as more seller's are not utilizing requests to defer AUTO REpayment deduction. (Square's "big seller assist " during the covid experience was to defer the automatic deduction from linked account for minimum due capital repayments).

The fact they abandoned countless still selling & processing revenue sellers in good standing & algorithm eligible is one of the lowest blows our business experienced during covid.

We are 96% paid back on our 10th capital loan, after today it should be fully repaid back and I plan to take some time & research other processing providers. I am sure since 2013(when we started with Square) there are many others out there where sellers that push through & navigate difficult times are valued.

[bigpoppi]

Have you found any other merchant cash advance companies that you like?

There are challenges for ecom but no big deal. 

[ecantiques5]

@bigpoppi 

All during the event yesterday of their service being out for sellers worldwide... their Twitter feed was filled with a veteran owned payment processor that was like right on every Square seller complaint. I just went to Twitter to see if I could find the name but Square has taken down the thread announcing the service interruption  yesterday. It was something like " Reddi pay " they have a capital program , they offer next day deposits...claim to have a lower processing rate. I just have not taken the time to research them. I must admit I usually like to stay loyal & consistent, as we were with paypal from 1997-2013 and then moved to Square in 2013 and have neen happily with them....until....stunts like ending capital loans & significant service outages like yesterday... have just been too wrong to overlook.

[LesliesBling]

I have been with square for years and have completed many square loans and have recently paid off an $18000 loan in full. I hate to go through the trouble of moving everything as I also use the square online store. I am thinking this may be the time to move all of my services to someone else as i have also been getting very vague answers. Has anyone had any success with a new company giving a loan based on transferring and providing records or do we have to completely start from scratch.

[bigpoppi]

@LesliesBling wondering if you ever received an offer from Square since this post?

[Collegehelp]

nope

[ecantiques5]

@bigpoppi 

I found it, they were called

Redde payments 

[bigpoppi]

Thanks, I found them. You know why Twitter took it down? Jack Dorsey owns Twitter and started Square....

I was trying to remain loyal as well. I'm a sole proprietor and most want you to be a an LLC or corp to get the MCA.

I'll continue to pay my loan off this next month and then wait and see.... unless Redde payments makes sense.

Have you requested the statements from Square on your completion of each loan?

I did once and they basically ignored it and sent me something on PPP. I just requested again today. I think that will help when moving elsewhere.

Thanks for your help! 

[Lizzy1]

What is the MCA? I am also a sole proprietor and i dont know what the benefit of LLC would be for me. 

[bigpoppi]

MCA = Merchant Cash Advance....

Some MCA providers require incorporation in order to get advances. Also, some have 15K minimum per month in processing volumes. Square was certainly the easiest and simplest to apply for...

[Leelee]

I wish I could find another company that want abandon us.

[ErinAkey]

@ecantiques5  have you gotten a new offer yet?  I was told on the phone offers are still going out?

[ecantiques5]

@ErinAkey 

No absolutely nothing. We are in Ohio not sure if they are lending here in my state. But we have been with them since 2013 have had 10 previous loans latest one was paid in full back in May. We process $30,000 + per month have a good mix of new clients and high retention of returning customers. No chargeback issues. I just DO NOT understand. 

I wish you all the best😊

[Jwp32708]

We are looking at other options for credit card processing. I was willing to stick with Square for the Square Capital option and continue to pay their higher than average processing fees, but all we've heard from the team at Square Capital is promises and excuses. The ones that claims that they have received a Square Capital offer was so small, that it was an insult.