New Square Loan in 2024

[SPPhotography1]

I’m at a bit of a loss for what else I need to do to be offered a new Square Loan at this point. I’ve been with Square for over 10 years, had 7 loans now that I’ve have paid back early every single time. Metrics are all in green, record sales year. In 2023, record numbers across the board, no refunds, no complaints or issues of any kind in our entire history. Current loan is 80% paid off, but no new offer in site. This is the kind of stuff that causes businesses to find someone else to process through! Please help! I’m sure I’ll get the same old excuses that you guys send to everyone about looking at every aspect of the business. But there isn’t a single aspect that isn’t way up. I’m not sure if there is a new process they are using now, or if there is some kind of issue with my banking or something else I’m not thinking about or aware of. Any help would be much appreciated. Thanks, because I could really use some new capital to start the year off with and reinvest into my business!

[Stacelyn24 · Accepted solution]

I'm really sorry to hear about your frustration with the loan offers. I understand how important it is to feel valued, especially as a loyal customer. Let me try to address your concerns and provide some clarity.

Loan Offers and Qualification Parameters

Square’s loan offers are based on a variety of factors, and while past trends have shown offers at certain thresholds, the exact parameters can change over time and are not always disclosed in detail. Here are a few points to consider:

• Dynamic Criteria: Square uses a complex set of algorithms that take into account not just the repayment percentage but also your recent sales history, account health, and overall business performance.
• Market Conditions: External market conditions and internal policy changes can also impact when and how loan offers are extended.

Value Beyond Transaction Fees

I understand that a 3% card transaction fee can seem high compared to other providers, but Square offers several features and benefits that help justify this cost:

• Integrated Ecosystem: Square provides a comprehensive suite of tools that work seamlessly together, from point-of-sale systems to online stores, invoicing, and inventory management.
• Ease of Use: The user-friendly interface and intuitive design make managing your business simpler and more efficient, saving you time and reducing the need for extensive training.
• Reliable Support: Square offers robust customer support and resources to help you resolve issues quickly and keep your business running smoothly.
• Secure Transactions: Advanced security measures protect your business and customers from fraud and data breaches.
• Analytics and Reporting: Detailed analytics and reporting tools help you understand your business performance and make informed decisions.

I understand the disappointment regarding the loan offer, please know that Square regularly reviews its criteria and your status. I recommend reaching out to Square’s customer support for a more personalized review of your account and to express your concerns directly.

[TheRealChipA · Accepted solution]

Good news, bad news, eh @cmeshine.  There are a number of reasons that COULD be part of why your new offer was lower.

1. Square might be slowing down on how much loan exposure they want to have on their balance sheet.  They are, after all, a publicly traded company that has to answer to their shareholders and investors.
2. If our sales are flat or at least not growing at a good rate to cover inflation and higher interest, then Square’s algorithm understands that inflation is eating into our available cash to pay bills, etc.  Flat sales (or very slowly growing sales) are always red flags to lenders, Square or not.
3. Sometimes how long it takes us to pay off our current loans can be a factor.  Let’s say that previous loans were paid off with automatic payments in 8-10 months in the past.  But for this current loan it took us 12-15 months.  That tells Square that our card processing volume can’t keep you with higher loan amounts.  Yes, they give us 18 months to fully pay a loan, but they obviously prefer that we pay them off closer to the 12 month mark.
4. If our cash/card ratio drastically changes, and cash spikes or is consistently higher than historical for our business, that is another red flag.  Since Square must only consider card volume when calculating repayment rates this can become a problem.

Of course, I’m not saying that any of these contributed to your lower offer.  I’m just throwing out a few reasons why this CAN happen.

[thehealingplant]

It's crazy we have super similarities on the last offer because ours was basically exactly the same (66ish percent) and also similar growth scaling.

Fingers crossed for both of us soon!

[Jjpainting]

Wow. That is kind of crazy. I’m anticipating on hitting the 90% mark today. I’m still sitting at 86% cause a customer hasn’t paid their bill yet from a job i completed on Tuesday.  I’ll have a large deposit for another job being paid today and as long as that past due bill gets paid today, that will bring me somewhere between 90 and 91%. As long as the past due one is paid, it might have worked out better for me cause it will show up as a really good day for me and possibly trigger an offer. Every one of my offers have been triggered the day a large large transaction was processed or triggered the day after. 

[Twpchair]

I hate to hear this! Especially when it comes to small business vs. big box stores or bigger companies with deep pockets or seems to have that one person at the bank who just feeds their needs. By chance, you don't bank with a credit union? The only reason I asked is a few years ago I got a line of credit, and it literally took me a couple of hours and done. Big banks, some run a lot longer, multiple paperwork the board has to vote on type thing. I asked before I went down and they said nothing you bank here we have all your numbers and done. 

[Twpchair]

Do you do just exterior painting or interior in the winter? I saw your post your from Michigan as well. I only met 2 others since 2012 even though half the businesses I go in use it! 

[Jjpainting]

I do both but 90% of the work I do is interior. But January and February are my slowest months by far. I start slowing down usually in December. These are the 3 months where most people are not selling their homes.  Most houses I paint, are for either when a homeowner is selling, or it’s a rental property and the homeowner needs it painted after a tenant moves out. 

[Twpchair]

I accept it usually in the wintertime. In Michigan, it's hard to gauge what winter is going to be like. The summertime is our busiest time until Christmas unless there is some deal on furniture or supplies I can't pass up. I usually don't accept the offer. I put 10-20% aside in square savings, not my credit union. That way, I don't touch it. I also prefer (not our choice) like a higher percentage paid back before my offer. The last one I took half the reason was it was 91% and I wasn't rolling over 30% and eating into my new offer. I've been with Square since 2012, and early on those 60 - 70s was normal. You get a 20k loan and roll over 40%. That's a big chunk gone, and you're paying on it  2x! So rolling over 9% was nice. Good luck to you! 

[itisnotjustpiza]

We are still waiting much like others with 100% paid close to almost a month. Today I checked after we closed and all in green. But I did notice it shows zero processing for the day. I believe it was showing processing as our day went on earlier. It doesn’t always seem to be accurate, keeping up or sometimes just glitching?  Found it strange to be there and then gone.  🤷🏻‍♀️

[ls725]

Now that you mention it, we too have the same issue, let’s say we make 1.4k for the day, every sale after 4 PM gets split over for tomorrow on the loans dashboard. So it will look something like $700 today and the other $700 tomorrow.

Maybe it has something to do with the way square handles settlements in the background. The money you receive and are able to use right away in your square checking account is a ”loan” until the money actually settles on their side.

Remember everything is just a “capture” until the settlement batch is ran.

that or there’s something they’re not telling us, maybe the algorithm changed to be more “business standard like” sort of how other bank loans check your cut off statement. Every sale after 4 PM in your monthly statement on the last day of the month rolls over to the next day (this is how I figured this out).

OR the AI system is actually being reworked and the algorithm isn’t even running right now. Perhaps it gave out too many loans, and a high percentage went unpaid or people just started doing the minimum payments only.

I also remember seeing a “pause” option on the loan dashboard which appears to have been taken away.

idk so many questions, unanswered, in the dark. Lol

[Jjpainting]

I never paid attention to this. Also, I don’t know if when a loan payment is in the “pending” phase from a sale if that counts for that day or the day it’s posted. Also, most of my invoices are split into two payments, a 50% deposit, which i require in order to schedule a job, and then the remainder due the day I complete the job. When I look at reports, it counts the deposit as a sale.  But when I look at the transactions tab in the POS app, the sale doesn’t show up until the entire balance is paid and the entire transaction shows up on the day the invoice is fully paid. Nothing shows up when the first payment is made. I always wondered when these sales counted for loan purposes.   

[Twpchair]

Definitely check your settings! You can adjust that. Sorry about the typos my keyboard is starting to stick! Of course, because it's been paid off for 2mths! 

[itisnotjustpiza]

It showed earlier in the day as we made sales but then they were gone.  They are back today.  Also today's are already showing as they come in .  It Is for the weekly processing volume. I noticed July 1st it showed we had 618 for processing frequency for the past year breakdown for July.  Because it was the first and at the beginning of the day, I knew this was extremely far off.  For example June had a total of 795 processing frequency on yearly breakdown. Now on the 12th we have 611 for July instead of 618.  So it is very confusing.  For just the past week we have 140.  

[Twpchair]

Good morning, I asked or brought up this question 🤔 because honestly I'm not or deal with invoices daily or monthly. But, the one I asked said if they pay you 50% down say today depending on how you have it set up to be paid you should be paid that day or night. And the loan part would apply as well and should come off of both 50%. Did you happen to look how your settings are set up? Invoices are the same. I'm sorry I 😞 was trying to reach the right person before I responded. 

[Twpchair]

@Jjpainting I forgot a couple of things. It's early and 1st cup of coffee. He asked if you have it set up for email when the customer pays the deposit instead of stalking your account and he said it is easier to track to make sure you're green metrics are accurate. That has been an issue lately and was addressed to be fixed. When you have people posting 30-50 off daily and if that Ole algorithm isn't going to pick that out. Honestly, I know your line of work is different and I don't know or would hope people didn't or don't stiff you especially after paying 50% down.  The ones we do we haven't ever but it's a kitchen table or cabinets they want that. But my husband friend is a logger and ughhhhh,  he does the 50% down and logs it, cuts it, plains and kiln dries it and boom 4-7mths later he's tracking them down smh. He invoices nope. I would go nuts really. 

[Twpchair]

1. Where are you located?

2. What do you have your cut-off time set for?  All of that plays a factor. Once I know where you are and the time zone, it could be just adjusting your cut-off or deposit time. Others are actually their cards, the customer, and how or when they cut off as well. Even though it's good and the money is there and "technically" gone from their card, it might not actually physically pull until 8 pm. Kinda like my credit union with actual funds/pending. I actually had to verify this many years ago, and Chase is a big one that clears right midnight 

[Jjpainting]

I’ve read something on squares site before regarding cut off times…is that for when using their P.O.S. Software/computers?  All my sales are through invoice and I’ve never seen anything about this in my account or account settings about cutoff times. Just curious about that is all 

[Twpchair]

Yes! In your account settings, there is a time you can put in. Mine is 5pm eastern time. Remember, 0square is West Coast. So some do 8pm eastern 5pm their time. I only do invoices for custom orders. Most of mine are in store purchases. So invoices are hard when the customer pays it. Honestly, myself for our furniture orders it's after dinner, and I sit down for the night about 7/8 pm. And I pay my bills then. Imo every bank/card is different for their cut-off time. I would guess just, imo it would be the next day. 🤷 again you need to see how you have it set to be paid if it's daily or something else. 

[itisnotjustpiza]

This makes sense except it appears and went to zero.  We are EST, midwest, Ohio.  

[Twpchair]

I watched it last summer from June till August there was hardly any one that at least post here about an offer or slight chance is was way below their previous offer. Then in September and one boom it picked up. I watch the trends and how it's going and it's looking like last summer is all I'm saying. I don't work for square so if they idle it back like it states above or watch the market like it states above. This could be a factor 🤔 this is just imo only hun. I don't know why or how it's algorithm works if I did you get a loan every stable business making money year after would get a loan! I'm watching businesses double and triple sales and to me that's a no brainer they are kicking it and yet paid off and still waiting? There's a few others that will jump in that have been around for some time now and they pop in about 70-75% and say well I be back around 90% I guess. My last offer was 91% and 1k more than my previous. I guess I should be lucky and not 3x less like above posted or just enough to pay off the previous loan and 0.00 left? That's a new one for me I've never seen that before. 

[Twpchair]

I'm sorry I missed this one. What went to zero? I think I responded to you about invoices. I wanted to ask someone in the group that does invoices daily compared to myself. They said that 50% should be in your account once the customer pays it and the loan portion will come off to. The same with the remaining 50% once they pay it and it processes you should be paid and again the portion of that applies to your loan. He said definitely check your settings on how you choose to get paid. We're the same time zone. I don't know if 8pm would be a better option than say mine at 5pm. I have transaction that roll over to the next day all the time but it's there! We close at 5pm my cut off time but retail they come in at 4:55pm all the time and shop and might not be done till 6pm. My funds hit like 5:05pm anything else goes for tomorrow. If you need anything else let me know I can ask him for a screenshot of his dashboard and settings. 

[B-dot]

So "buddy" and I both got offers yesterday.

My offer came in at 90% and the amount was half of my last offer.  The balance owing on the last loan eats up 30% of the new loan offer, so in the end only 70% of it would be deposited.  Keep in mind my sales since the last loan came into effect are 21% higher.  To offer a $23,000 loan with $1mil + in sales is rather insulting (note:  I absolutely do not need the loan .. but paying 8% to make 45-50% is a no brainer investment, so I take them!).  My fear is if I reject this offer and wait for another, that one either won't come at all, or will be even lower.  Do I take the offer, or just give up??

Now "buddy" on the other end, just ended his relationship with Square this morning because of his latest offer:  $400,000 in sales so far in 2024....his loan offer is for EXACTLY what he owes on his current loan!  Yes, his offer is only 9% of his previous loan!!  So if he takes the loan, the deposit into his account would be $0.00, but they charge him an 8% fee!!!

Two insulting offers for him.  He's done

I think I'm done, too

[itisnotjustpiza]

I am so sorry.  It is very insulting.  I do believe it is computer generated and possibly maybe some things are being worked out.  I have wondered if not only the economy is coming into play but squares credit card product being offered to some.  I am not eligible for this but thought maybe just maybe it was going to be an option at some point.