Square Capital business loans review

Fast short-term business loans for current Square users

Current Square users can borrow between $100 and $350,000 with a standard term of 18 months.

Square loans are meant for short-term expenses your business may face. The loan amount, fee and daily repayment percentage are 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.

One flat fee — but daily payments required

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.

The examples Square highlights on its website don’t state the approximate APR or the loan term. However, users are given the loan amount, fee and total repayment. Using Square’s examples, the fee is equivalent to about 14% of the advance. But your fee could vary widely.

With the default 18-month term Square offers, this is equivalent to an APR of about 14.9% — high for a business loan but still competitive for a cash advance.⁽¹⁾

How Square compares to other lenders

Square loans have a limited reach. If you aren’t a Square user — or haven’t been offered a loan through its platform — another short-term lender like OnDeck or American Express business line of credit may be a better choice.

To browse lenders, select your annual revenue, time in business and your personal credit score range. Make sure to only apply with lenders that have requirements your business meets or your application will be rejected.

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Updated regularly

Product USFBL	Finder Score	Min. Amount	Max. Amount	APR	Requirements
Olympus Business Capital	Finder score 9 Excellent	$500	$250,000	Not stated	Been in business for 6 months registered with the state, active and open bank account in business name, have $10,000 of revenue each month	No credit needed. Funding up to $250,000 with a variety of finance options to best fit your business needs.	Go to site Compare	loading Fetching your data...
Lendio business loans	Finder score 9.6 Excellent	$1,000	$10,000,000	Varies by lender	Operate business in US or Canada for 6 months or more, have a business bank account, minimum 520 personal credit score, at least $8,000 in monthly revenue.	Submit one simple application to potentially get offers from a network of over 75 legit business lenders.	Go to siteMore Info Compare	loading Fetching your data...
Fundera business loans	Finder score 8.6 Great	$2,500	$5,000,000	Varies based on lenders	$60,000+ of annual revenue, 550+ personal credit score, in business for 6+ months	Get connected with short-term funding, SBA loans, lines of credit and more.	Go to siteMore Info Compare	loading Fetching your data...
Fora Financial business loans	Finder score 8.8 Great	$5,000	$1,500,000	Varies	6+ months in business, $25,000+ gross monthly sales, no open bankruptcies	Get qualified for funding in minutes for up to $1,500,000 without affecting your credit score. Best for companies with at least six figures in annual revenue.	Go to siteMore Info Compare	loading Fetching your data...
National Funding business loans	Finder score 9.6 Excellent	$5,000	$500,000	Undisclosed	In business 6+ months and make at least $250,000 in annual sales. Other loan types have additional requirements.	Working capital loans and equipment financing, some high-risk industries may be eligible.	Go to site Compare	loading Fetching your data...
American Express® Business Line of Credit	Finder score 8 Great	$2,000	$250,000	N/A	Minimum FICO score of at least 660 at the time of application, have started your business at least a year ago, and an average monthly revenue of at least $3,000	Access lines of credit for your small business even if you aren't currently an Amex customer.	Go to siteMore Info Compare	loading Fetching your data...

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Square Capital Funding reviews are a mixed bag

Complaints on the Better Business Bureau (BBB) are few, and only one report states difficulty with Square Capital’s loan process and nonexistent customer support. While one review and four customer complaints aren’t sufficient for a fair rating, Trustpilot feedback gives a clearer reading on Square.

Negative Trustpilot reviews report having to jump through hoops in the loan process, even after receiving multiple loan offers. Many complaints also reflect poor customer support. But positive reviews say Square loans were convenient, easy to repay and offered great client support.

No set eligibility requirements

You’re only eligible to apply if you already use Square’s POS system and see an offer in your Square Dashboard. Otherwise, eligibility is unclear. But if your business meets the following criteria, you may be more likely to qualify:

• At least one sale using Square’s POS system per week
• At least $10,000 in annual sales through Square
• Have a mix of new and returning customers

How the application works

Square Capital generally requires less information than your typical business loan. You must provide your business’s tax identification number or your Social Security number if you’re a sole proprietor. You may also be asked for tax returns, a utility bill to verify your company’s address and a government-issued ID for all business owners.

Online applications are only available to you if Square sends you an invitation. Log on to your Square account, and visit the Loans tab of your Square Dashboard to view any offers.

If you see a notification to apply for a Square Capital loan, hit the link. From here, select the loan amount that’s right for your business. Fees automatically adjust with the amount. Then, accept the offer and follow the instructions to fill out an application and submit any documents.

Filling out the application typically only takes a few minutes. If your business is approved, Square Capital sends you loan documents to review and sign.

Square Capital loans are automatically repaid

Square Capital charges a percentage of your daily sales through its point-of-sales system. This means everything is automatic — and your daily payments reflect your business’s revenue.

But regardless of sales, you must repay 12.6% — or 1/18 — of your initial loan balance every 60 days. The loan plus the fee is due in full after 18 months.

If your business can’t make the minimum payment based on Square sales alone, Square automatically deducts the remaining amount from your bank account.

Watch for new offers while you repay the loan. Square Capital could extend a new loan offer to you once you’re close to repaying your initial loan. If you need access to more funding, you may have the option to take out another advance.

The Square POS system sets it apart

To get access to Square loans, you’ll need to be a regular user of the Square POS system. You can also take advantage of Square Cash and Square Payroll in addition to its loans.

• Square POS is software that 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, known as CashApp, 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 2.75% to receive payments.
• 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.

Square Capital is a legitimate lender

Square Capital has funded over $9 billion to more than 460,000 small businesses since its inception.

It takes basic steps to protect your information, like password-protecting your account. All loans are issued by Square Financial Services, Inc., a Utah-Chartered Industrial Bank, Member FDIC.

If you aren’t eligible for Square, read our guide to business loans to find more options.