Square Loans Fixed Repayment Rate and Minimum Payment Requirement
Eligible Square merchants receive customised Square Loans offers based primarily on account activity with Square. Upon approval, funds are deposited as soon as the next business day.
Fixed Repayment Rate
The repayment rate is determined based on your business’s card processing, your offer size and other factors of your business. It’s designed to help your business stay on track with paying back the loan within a year. You can adjust the repayment rate of your offer by changing the loan offer amount prior to applying for the loan.
You’ll repay your loan by paying a fixed percentage of your daily card sales through Square. You’ll pay more when business is strong and less if things slow down. The fixed repayment rate never changes. Keep in mind that your fixed repayment rate is in addition to Square’s normal processing fees.
Example Scenario: Loan Payments from Card Processing
Card transaction: $100.00
Card processing fee: $1.90 1.9%
Repayment rate (13%): $13.00 will be applied to your loan balance
Amount deposited into your linked bank account: $85.10
Note: Your fixed repayment rate is not an interest rate. It’s the percentage of daily card sales that will be applied towards the repayment of your loan balance.
Estimated Loan Payback
We take your business’s Square payment processing volume, account history and payment frequency into account when determining your loan offers. Loans through Square are designed to be paid back within a year if your business’s payment processing does not change based on our initial estimations.
Additionally, if there haven’t been any changes to your business and you maintain regular processing volume through Square, making your minimum payments on time shouldn’t be an issue. However, we encourage you to review the Minimum Loan Payment requirements in your loan contract, so you know what to expect if your business’ card sales change during repayment. If your business sales significantly increase, your loan may be paid back in less time than the original estimates.
Square Loans Status
If you’re a Square merchant eligible to apply for a loan through Square, you’ll see loan offers presented in your online Square Dashboard. Upon acceptance and approval of a loan, you can monitor your repayment progress by logging into the Loans tab of your Square Dashboard.
In addition to the information available on your Square Dashboard, you’ll receive a daily email showing a detailed payment summary and your remaining balance. You can also view the amount you’ve repaid on your Transfer Reports, which can be downloaded at any time from your Square Dashboard.
Minimum Loan Payment
One of the benefits of Square Loans is flexible repayments – paying a fixed percentage of daily card sales allows you to pay more when your business is busy and less if things slow down. However, there are minimum payment requirements.
Minimum Payment: 1/18 of your initial loan balance is due every 60 days.
We understand there are ups and downs for every business, but all loans require a minimum payment to be made every 60 days. Additionally, the entire loan balance must be repaid within 18 months of loan approval. If you have a minimum payment coming up, you will also see a reminder banner on top of your Square Dashboard.
Example Scenario: Only Making Your Minimum Payment
Initial Loan Balance: $1,140 ($1,000 loan amount + $140 borrowing cost)
Minimum Payment: $63.33 every 60 days
Balance at Loan Maturity (18 months): $570.00
If you only make the minimum payment every 60 days, at loan maturity you will only have paid off $570.00. Your business’s linked bank account will be debited for the remaining $570.00 at your loan maturity date.
Note: If you just make the minimum payment of 1/18th of your initial loan balance every 60 days, you will only pay down half of the loan balance in 18 months. You will owe the remaining balance upon the maturity date of your loan and may be debited for that amount.
Take a look at Square Loans Repayment FAQ for additional information about how repayment works with loans through Square.
All loans are issued by Square AU Pty Ltd. (ABN 38 167 106 176). Valid Australian bank account is required. Actual fee depends upon payment card processing history, loan amount and other eligibility factors. A minimum payment of 1/18th of the initial loan balance is required every 60 days and full loan repayment is required within 18 months. Loan eligibility is not guaranteed. Eligibility criteria include consistent and continuous payment card processing through Square. All loans are subject to credit approval. Terms and conditions apply.