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.

[MayaP · Accepted solution]

Thank you for reaching out and sharing your concerns. We understand your frustration, especially given your long-standing relationship with Square and your excellent track record with previous loans.

There are several factors that can affect loan offers, and while it sounds like you have met all the typical criteria, there may be new processes or other considerations at play. I would reach out to our Square Financial Services Team if you have any further questions. They are available at 1-855-700-6000 Monday - Friday, 8 AM to 8 PM CST. 

[VanKalkerFarms · Accepted solution]

August 1st Square shareholder letter came out with another outstanding quarter for Square Loans.  More loans than ever were started in the last 3 months, an outstanding show of commitment to the service.
"Square Loans facilitated approximately 142,000 loans totaling $1.45 billion in originations, up 32% year over year."

That breaks down to almost 1,600 loans a day (66 an hour, or more than 1 per minute). averaging $10,200+ per loan.

So yes, there are THOUSANDS and THOUSANDS of Square Loans happening all the time.  It is unbelievable that they can get this number of loans even facilitated, that is a staggering number of loans to Square customers.  It wouldn't be possible without the Square Loans Algorithm going thru and promoting offers to be given.  For every one post on here saying they haven't gotten a loan or 5th offer, 10s of thousands have gotten loans.  The service keeps growing though it may not seem like it to a user that is waiting for their 3rd loan.

@Twpchair 

[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.

[Minion]

🤣Oh we've all been there! You aren't alone that's for sure!

[Jjpainting]

My offers last August and November came in at 80% and 66% respectively. I think it’s all varies on the company 

[ls725]

92% on my 2nd loan, all in the green, no offers at all, biggest sales we've had past 2 months, business is only half a year old and we've been processing like crazy, our income is really really good for a new business. I think the 3rd offer might be a fairy tale, might just cry if it actually pops up 🤣

[Twpchair]

Congratulations on the new business! Way to go and kicking it! I ❤️ it! Can I ask what is that you do? We have some amazing groups but they are broke down or geared towards your line of business! Wow there are a lot of new start ups! Let's get this mom and pops businesses!

[ls725]

General computer, phone repair, we do have more experience than most shops in town which is why we are able to succeed, we offer services that other shops would usually turn down due to the complexity of the repair.

EDIT: on another note, it seems that it would be bad business to not lock in a business with a loan before it's fully paid off? (for square that is)

Once it ends and you see the full amount coming in from every transaction which daily for me is about 300-500 that would be going to my company rather than a loan payment. Either way, the money would be manageable.

Square Loans are nice nonetheless, let's you manage your income a little better, ahead of time, like dropping a whole year of paid rent for your shop for example, and then saving up all the extra income so by the time your rent payment is back up you're already stacked.

Not to mention the processing fees! Square is making extra money every month on top of the loan by keeping you locked in, everybody wins! I hope the Loan AI makes us the chosen ones next 😂.

[Jjpainting]

So true. I average paying about $550 per day on loan repayments.  That doesn’t bother me too much as every loan helps expand my business. But the loan fees add up. I’m 88% paid off on my fourth loan. My first loan came April 5th of last year, second was April 27th, then third August and current loan came last November. I just added up the fees and that’s $5100 in just over a year. I would love a new loan offer soon, but if they don’t offer one until this one is paid off, I’ll probably just put the 17% or so in a savings account. Within 4-5 months, I could the same amount saved as a loan. 

But it does make sense for square to offer every business that they know have a history of paying back quickly.  It’s gotta be there largest source of income I would think.  

[thehealingplant]

Our current also came end of last November as well and we don't do quite as much per day but we're at almost 76% on ours. This one is our 10th and double our last as well. Seems like we're in line for the decreased amount when it does come around (if it does.)
Sadly by the time we find out we may be buried by local competitors as we've got some high dollar spending big companies around us that we're struggling to keep up with. So for us the money would immediately go to some serious marketing.

[Jjpainting]

Yeah i anticipate the same offer, maybe a little more or less (my processing sales for the previous year prior to that last offer were only $128k, right now I’m at $148k for the previous year. 

Keep me posted on your next offer. I should reach the 90% mark paid off by the end of the week. My last offer that was almost double came when the prior loan was only 66% paid back 

[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.