Square Financial Services, Inc.

Square Loans, formerly known as Square Capital, is a business financing product offered by Square Financial Services to eligible businesses that use the Square point-of-sale system to process card payments. Square Financial Services is a bank subsidiary of Block, Inc., the company that owns the Square payment platform.

Square Loans offers business loans to qualifying Square merchants based on their history of sales processed through Square. The application process is simple and largely automated. Square reviews your transaction data and, if you qualify, you may receive a pre-approved loan offer directly in your Square dashboard without going through a traditional loan application.

Repayment works by having a fixed percentage automatically deducted from your daily Square card sales until the loan and a fixed fee are fully repaid. This means on days when you process more sales you pay back more, and on slower days you pay back less. There is no fixed monthly payment, which some business owners find easier to manage.

Square Loans is only available to businesses that already use Square to process payments. If you do not use Square as your payment processor, this product is not accessible to you.

The cost of a Square Loan is expressed as a fixed fee rather than an interest rate. Business owners should calculate the effective annual cost and compare it carefully against alternatives such as bank loans, SBA loans, credit union lines of credit and other online lenders.

Square Loans can be a convenient option for Square merchants who want a simple, fast funding experience and prefer automatic repayment tied to their revenue. It works best for businesses with consistent Square sales volume. As with any financing product, understanding the full cost before accepting is essential.