Good news, bad news, eh @cmeshine. There are a number of reasons that COULD be part of why your new offer was lower.
- 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.
- 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.
- 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.
- 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.
Hey @Craftsmandrywal. First, I know for a fact that loan offers are going out. I’ve receive at least 4 (a few more I think) in the past few months, even though I’m not looking for a Square Loan.
I can give you some insights but of course no concrete answers.
It seems that right now Square Loans are coming later, even much later, than in the past or what sellers expect. Why? Because if you read the news, or follow the financial journals, you’ll see that all lenders are being very conservative about how much they have on their balance sheets. Rates with the Fed are still high and will only come down slowly. There is talk every day of a looming recession, which I think is crazy since the signs for recession just aren’t coming together. But markets don’t like that kind of talk. The point is Square is not the only lender who is holding back. I’ve seen sellers here waiting until the 90% range to get a new offer, and more than a few who completely paid off their existing loans and then waited a while (weeks if not months) before a new offer showed. This, as they say, is just the way it is. The lending market is being highly conservative and cautious. Hopefully, that will change soon.
Unfortunately, no one at Square can tell you much more. Square uses an automated algorithm to determine whether or not offers will go out, and human intervention for this process does not exist. The loan status dashboard just highlights potential problems and bottlenecks, but it DOES NOT guarantee that if everything is green then an offer should be coming — soon or otherwise.
If you really need money now, of course I’ll suggest that you reach out to your local bank or credit union. They might be able to help, but they might not. This conservatism and reluctance to have too much loan exposure on balance sheets is worldwide right now, unfortunately.
Regardless, I wish you well. And, if this LONG reply is too much — and all you meant to do here was vent your frustrations and didn’t want feedback — then please accept my apologies.
