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

[ecantiques5]

@jim90909 

Square is no longer offering a capital loan product. They are only doing SBA PPP loans ( at a lower amount than what you are  truly eligible for ) and Deferment Of Auto withdrawals for loan repayment.

[Lizzy1]

What does that auto deferment mean?

[ecantiques5]

@Lizzy1 

If you have a Square loan and have not been processing payments where your repayment percentage is taken out & repaid to your loan, Square has deferred the auto deduction to your linked checking account to meet that required payment.

[bigpoppi]

I believe they are deferring any payment deductions for your minimums until the end of July. They are not adding minimums on to the back and of your loan so it is still all payable in 18 months. Not sure it they will hit your account end of July for back payments either.

[Tritter82]

if you were not able to pay your amount owed, due to less processing, your amount due would not be automatically taken from your account 

[Leelee]

I haven't received another offer as well. I'm paid off and I was wondering why haven't I received one. It's been almost two weeks.

[Leelee]

It's sad and strange that there are no offers.  Especially for the ones that pay back well before the contract ends. Square capital needs to take that into consideration or they will lose alot more client's

[ecantiques5]

@Leelee 

It sure is very sad and to be perfectly straight forward it's loathsome. For years Square's long time sellers worked hard, processed revenue, maintain returning customers, worked to gain new ones, ran good business with focus on satisfying customers to avoid chargebacks, paid multitudes of previous loan offers back and then when we needed their partnership the VERY MOST..... the door slammed shut. Cruel, calculated and more than likely will cause many to reevaluate their business partnership with Square. 

[bighitvapor]

This will take me out of the game, I truly wish I had read these post weeks ago, I have postponed purchases because I was waiting for square to make an offer ive repaid 5 previous loans and had me square down to 97%, I am a small brick and mortor store and have survived 5 years and covid and now square is the one that will close my doors, THANKS SQUARE, does anyone have ideas on other forums of receiving card payments.

[swdw77777]

I have always recieved an offer for a new loan when I'm about 75/80% paid back.  I haven't been offered a loan yet and so I started looking on here and seen where other sellers haven't received thier offers either. I have applied for the PPP loan and still waiting, but the odd thing with that is they are using your profit/loss amounts to average out your loan amount. The SBA is not using the amounts you paid out for payroll, don't let them fool you. So I was waiting on my offer to come in and just not get the PPP loan, because they were offering $400. What is that going to do for a business? If anyone has any answers please post.

[ggbluejune]

What changed with square capital? I need another loan I'm at 80%

[Kimrose]

I am 85% paid on my current loan.  I have been waiting and hoping for another Square Capital offer.  Please help.  Thank you!

[Skimberp]

I would contact support and talk to them. I am trying to do the same. 

[ashc]

Hi @Kimrose and @Skimberp,

We do ask that sellers do not request for Capital loans here in the Community as we're not able to assist with that here.

However I did move your posts to a thread where one of our Capital team members explained the current state of Capital loans right now with the PPP loans. 

[TheSavvyDog]

But here's the bottom line (for anyone with any business savvy, paying attention to the news or SBA guidelines IN GENERAL): 

PPP has NOTHING to do with Square Capital.  You don't (and, from all I've been reading, you SHOULD NOT) need to apply for PPP through Square - their "offers" have typically been much lower than regular banking channels.  PPP is an SBA program - NOTHING to do with Square Capital.

EIDL has NOTHING to do with Square Capital.  It is a program through SBA **ONLY**

So, why is Square trying to make it sounds like Square Capital has anything to do with PPP Loans?  PPP  loans aren't backed by Square.  They are back by the Fed.  Deflection is ugly.  Frankly, I've been with Square, almost since it's introduction.  I've always defended Square.  I've recruited, literally, over 100 plus new merchants to Square (and countless individuals).  But, right now, with Square's lack of transparency....as well as Square promoting Square Capital as one of their "hooks" to generate new business....I'm really embarrassed that I've done so!  The lack of honesty is disturbing and really needs to be addressed.  At the VERY least, you need to remove the information about Square Capital from your intro/promotion to acquire new clients.

[ecantiques5]

@TheSavvyDog 

Your post is without question " A BEST ANSWER ". Square in my opinion manipulated so many of their hard working sellers through this whole covid ordeal. Their role in the SBA's PPP facilitation was #1 late in the game (round  1 of PPP expired before Square could get approved as a facilitator)#2 significantly lower loan amounts with Square doing the calculations. #3 caused many sellers incredible distress by encouraging duplicate applications & then offering much lower funding amounts.

They should have remained loyal to their sellers and to their Capital Program. They have showed their true colors. They do not share the same commitment to our business partnership as we sellers do.

[bsa77]

One benefit of running the credit cards through one processor is the benefits and perks that come along with it. Although we do not see the "behind the scenes" requirements for square to run their business, I can see first hand that they are not being upfront or transparent. My sales are up, loans paid off early. I will give square a few more weeks to offer a loan or I will be going with another company that has been ringing my phone off the hook for my business. I dont mind standing by while things are getting figured out during this uncertain time but if your business is growing ( mine is) and those companies that you use can't grow with you. Move on.... 

[Allstartaxicab]

Did the PPP loan stop square capital from offering me another loan

[ecantiques5]

@Allstartaxicab 

SQUARE CAPITAL ended without warning their Celtic Bank Capital loan program sellers had become used to for years. Although this response follows typical Square ambiguous verbage, not one seller has been offered a capital loan since the covid experience began. Does not matter if you had many successful prior loans, does not matter if you still were processing increased volumes during covid, getting new customers.... they ended it and caused great anguish to many of their sellers that were counting on their Ongoing partnership with Square Capital. 

[Spector]

Just wanted to chime in and share our experience with Square Capital. Had taken several loans, always paid early and most recent was paid off early and balance at 0 at the moment, of which was paid off really fast, again. 

It's my opinion, that the Capital program was not risk averse given the current pandemic and got out while they could. I'd guess that the losses lenders are suffering are staggering.. they just wanted to stop the losses I guess. 

At same time, many of our biz's aren't *off* if you will, and I'd guess that many will remember the lack of transparency and clarity during this. I think it'd have been nice to have a message reflecting the apparent lack of new biz for Capital. Is what it is I guess, but many may not take advantage of the money faucet when it's turned back on.. 

[jim90909]

no capital loan at this time?