For many companies, Square’s application process will be a much more appealing alternative to the standard short term loan

On the other hand, if you do get the offer and you choose to accept, then the funds will be sent directly to your account – often within a matter of hours. Currently, there’s very little information available about how Square determines a merchant’s eligibility for Square Capital.

  • Your overall activity level on the Square POS
  • Your processing volume (products and services)
  • How often you use Square
  • Your ratio of returning and new customers
  • The growth of your company
  • The number of chargebacks you deal with

Interestingly, Square Capital doesn’t appear to examine your bank statements or credit scores when it comes to offering you a business loan. Like most financing solutions that provide merchant cash advance options, your general success as a business owner, and the amount of card sales you make will be far more important to Square than your credit earning

This means that as long as you’re earning a relatively consistent income from your clients with the Square POS, you shouldn’t have a problem receiving money – even if you don’t have the best credit.

Square Capital Review: Funding Process

Well, you should have an insight into how much Square deems you eligible to borrow in the form of your offer. You don’t have to accept that full amount if you don’t want to. Instead, you can look at various options up to your limit, and see what the fees, rates, and repayment terms look like for each corresponding loan. Small business loans come in many different shapes and sizes; the lump sum that you need from your provider will depend on what you want to accomplish with your capital.

Okay, so Square likes what it sees on your merchant account and places a loan offer on your dashboard

If you like what you see when you browse through your capital options, then you’ll be able to click “accept” on your loan offer. At this stage, Square might ask you for a few documents to prove your identity and show that you own your business.

Once you’ve submitted your application, the Square Capital team will approve your request within 3 days and deposit your funds into your bank account. This means that you won’t necessarily get a lump sum into your business bank account the next business day. However, compared to a lot of other short-term loan providers, Square is pretty quick at giving you the money you need.

One problem? If you reject a loan that’s extended to you and you decide that you want to take out the capital with Square later, you don’t have a lot of options. There’s no way to determine whether you’re going to receive another offer, and you can’t exactly rely on getting funding with Square when you need it most. Square isn’t like other business lenders where you can just go and make an application for a loan whenever you like. You need to wait for Square to come to you.

Additionally, even after you’ve been approved for a loan and you’ve got the offer sent to your page, there’s always a chance that you could be rejected when you “accept” the loan. This can happen if Square sees any unusual behavior on your account, like a change in the number of customers you get, for instance. If Square is concerned that your annual revenue isn’t going to meet its initial projections, then it might not give you a business line of credit, even after making an offer originally.

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