Invitation-only funding based on your Square sales — but beware of daily repayments.
- Best for businesses that use Square to process payments
- Pick something else if you need to borrow more than $250,000
|Product Name||Square Capital business loans|
|Loan Term||Up to 18 months|
|Requirements||Business uses Square to process payments, invitation to apply.|
How much will this loan cost me?
Square Capital loans come with a fixed fee instead of interest, which you repay plus the loan balance with a percentage of your daily sales on Square. It doesn’t disclose the range of fees it charges.
But it shows an example loan on its website with a fee equivalent to 13.5% of the advance. In this example, the business repays the loan with 16% of its daily sales through Square. This is equivalent to an APR of just under 17.4% — high for a business loan, but competitive for a cash advance.
Businesses can borrow between $500 and $250,000 and you must repay the loan in full over 18 months.
How it works
The loan amount, fee and daily repayment percentage are largely based on the sales your business processes using Square. Businesses that process well over $10,000 a year in Square sales, process every day and have a healthy mix of old and new customers are more likely to get a loan similar to what it advertises online.
What do I need to qualify?
This loan is invitation-only — you can only apply if you see an an offer on your Square Dashboard. You’re more likely to qualify if you meet the following criteria.
- At least one sale using Square’s point of sale system per week
- At least $10,000 in annual sales on Square
- Have a mix of new and returning customers
What information do I need to apply?
Square Capital generally requires less information than your typical business loan. You need to provide your business’s Tax Identification number — or Social Security number if you’re a sole proprietor. And you need to provide give contact information and a state-issued ID for all business owners.
What industries does Square Capital work with?
Square Capital doesn’t explicitly restrict any industries. But you need to make a significant amount of revenue using Square’s point of sale system. This makes it better suited for retailers, restaurants and other businesses that regularly process credit card payments.
What other services does Square provide?
- Square Point of Sale. Square’s point-of-sale software combines payment processing, digital receipts and inventory management to allow for smooth merchant to customer interactions. Square’s point-of-sale system accepts credit cards, cash, checks, gift cards and mobile payments.
- Square Cash. Square Cash is a person-to-person money transfer service that operates through the Square Cash app or by email. Sending and receiving money is free for personal use, while businesses pay 1.5% to receive payments.
- Square Payroll. Square Payroll is a small business tool that streamlines the employee payroll process with digital time cards, online employee accounts, automatic direct deposit and tax filing services.
Pros and cons
Square Capital offers a simple way to get an advance on funds for businesses that might not qualify elsewhere. If it’s not right for your business, consider other providers like Square Capital.
- Loans as low as at $500
- No personal guarantee
- Funding as soon as the next business day
- Invitation-only application
- Not transparent about costs
- Minimum repayments ever 60 days