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

[Jwp32708]

What state are you located in?

[Spector]

We're in Cali.

[bigpoppi]

@Spector - Cali is a big state and Newsom has different rules in every county.

What county are you in are you a bricks and mortar biz or do you operate online only?

Thanks and congrats!

[brown17]

New York.  Almost all open and our infection rate is below 1 % 

[Gp103179]

I agree a smaller loan offer is better than no offer! Can you tell us what state your in since they are changing the criteria to certain states and certain businesses will only be approved. I to have been with square for 9 years and received many loan offers to help my businesses but being a stylist I worry that we won’t get any more loan offers for a while! 😣

[trtprinted]

I talked with them last week about them no longer providing loans and they told me they started offering again "based on criteria".

I think they just said that to me keep me, not that I am a huge customer but I do help their bottom line; we all do.

Can anyone validate their claim of now offering loans?  

I am waiting till my current loan is paid off, should be this week based on sales, and looking at going to PayPal. I talked with them and find there is much more transparency and communication in regards to loans.  The person I talked to heard Celtic Bank dropped Square and they currently have not found a new bank.

Has anyone else worked with Paypal and comparing the two which do you prefer and why?

Thanks in advance for your feedback.

[oneggorin]

We have slowed our business with Square to a crawl. We have started using other providers and we payed off our commitment to Square a few months ago. We will be scarce here good luck to you all i'm tired of the lies and have lost trust in this company. 

[SullivanBlue]

How did you talk to them? I have called as well as emailed. All I got was one generic email with a lot of bs excuses. They at least need to be honest with the people who's lives depend on their service. Not the loans I could care less if I get one again or not. I just don't see why they wouldn't be honest with the community of owners that depend on them and trust them whole heartily. I do not feel they care for us as they should nor respect our views or worries. I will be going back to PayPal after all of this. Not because of a loan solely on respect for your customer being so lacking. 

[brown17]

I do not blame square.   I was just curious if I was the only one seeing this issue.   I am in NY.  I see your in Cali.  We have little restrictions here.  How can it be NY resident is not being offered any loans but Cali who is closing again is??

[jaechandler68]

Update: 08/10/2020

Got a Square Capital Loan today. Square has definitely cut back on loans.  

[Jwp32708]

I've seen several Square merchants saying that they have received loans within the past week. It would be helpful to the rest of the community if you could mention as to where your business is located so that we can get a gauge if certain areas are being excluded from receiving an offer.

Thanks!

[TheSavvyDog]

Or specific types of businesses!

Cyndi @ The Savvy Dog

[trtprinted]

jaechandler68

Verify happy for you!

Was it your around the amount you usually receive or lower?

Thank you for updating the group and have a great day.

[TheSavvyDog]

Curiosity has me....

1) What state is your business located?

2) Since you've had a Square Capital loan in the past, what "changes" to the "criteria" did you see, based upon what you've experienced previously?

3) Had you just recently paid off a Square Capital loan, or did you receive an offer before your loan was paid off?

4) Have you been processing at or above pre-Covid levels?

5) Is your business primarily on-line/delivery or is it a brick and mortar business?

6) What type of business are you in?

7) Are you a sole proprietor, LLC or Corporation?

😎 It's been rumored that Celtic Bank is no longer "backing" Square/Square Capital....is that true?  Did your offer show a different entity?

Thanks!  I know it sounds like I'm simply being nosey...but I think the entire Square Community is looking for answers to all of these questions, and I specifically tried not to dig into your actual finances.

Cyndi @ The Savvy Dog

[bigpoppi]

I find it hard to believe that Celtic would be gone after they just spent four months with Square issuing almost one billion dollars in SBA loans....

Whoever just received a capital loan can look on their docs and see who underwriter is.

[bigpoppi]

August 14, 2020

My turn to update as I have been posting in here 3 or 4 months...

I received an offer on Wednesday, 8-12-20202... My 9th loan had been paid off about 2 weeks ago.

I am online only based in California

The amount offered was less than one-third of my last 2 loans that were both paid back in year or less. Both those loans were low to mid 5-figures each and the last one I was paying 18.5% of sales. Very steep price but I have margins.

Sales this year are about 10% higher than last year to date, so no drop in sales.

I said OK, let's see what happens... I fill out the couple of items I needed to and hit submit.

About 4 hours later I get the bad news that my loan was denied.

Reason:

What’s affecting your eligibility

·        Your business has a Square Capital small business loan through another Square account. This account has experienced a drop in sales recently.

I have another business that I have also had loans through. Bottom line I still owe $697 and the loan is current. Yes, numbers dropped because I chose to not put a lot of focus on it past few months. Still would be paid off within the year.

The following day I get an email from Capital from this other account saying we realize you have another account. Would you like to add the business I was just turned down from to be added as a co-payee to help pay it down.

I have gone back and forth with questions and still no answer

1) can i just pay it off and then get the original offer back?

2) why can't you pay off the one with the proceeds of the new loan?

3) If I say, ok I'll let transactions from the one pay the offer would those funds be eligible for payoff if new loan is offered?

4) Are you waiting until loans are completely paid off instead of rolling into new ones?

All I can say is Capital is back but it's operating as if it is really scared money.

The new loan offer would have been paid off in 5 or 6 months. They are going to keep risk to a very minimum even if you're processing.

BTW - as I previously posted elsewhere, they are still partners with Celtic Bank.

Hope this helps others what to expect,

Mike

[Ms_Misty]

Finally got my offer. With all the posts in here, most people have been paid off for quite some time, so I was very very surprised. 

I was $150 away from completing my current loan. Got an email this morning with an offer....it’s 1/4 of what I am normally offered. 

I know this is incredibly hard for all of us as small business. We have grown our businesses from this capital and have worked these offers into our business strategies. We have literally relied on it. And the ease of these transactions. 

Being offered 1/4 of my usual capital is a huge blow. My business is repeat client-based and my numbers are consistent. 

For me, it’s providing a tiny business buffer. Non of the physical growth I had planned for this year will be able to happen. I will simply have to make do. And I will never forget how small business has been treated during this time. 

While writing my post, I was already approved for my offer. 
Since where we’re located has some bearing on these loans, I’m in Colorado.

I know that seriously low offers can be as detrimental as no offer at all, and I’m so sorry. I hope we can get through this relatively unscathed. And I hope that these offers bounce back to norm soon. 

[71GTOkid]

Square states they have not sent any more offers until PPP is closed. However the website states PPP is done, so does anyone have an idea when more loans will be generated? I have a small business and we are starting to suffer

[brown17]

Thats the golden question.   Seems as if very few have received loan offers.   i am in NY been running my business through covid, increased my sales, restrictions here in NY are very little.  And I have paid off two previous loans well before due date.   Not sure what "criteria" they are looking at anymore.   Also why do they not report to the business credit Bureaus? 

[Shirellejb]

Is square capital still offering loans to businesses if they are still making regular on time payments during the coronavirus on an existing loan and is near payoff? Or are loan offers on hold for now?

[Kay314]

Has anyone been offered a Square loan recently?