Square Funding FAQ
| Not in Quebec? Visit our Square Loans FAQ. |
Funding Overview
Is Square Funding a loan?
No, Square Funding is not a loan. It is a merchant cash advance, which means you’ll get funding upfront in exchange for a fixed percentage of future credit or debit card sales processed with Square. Unlike loans, there is no interest or any fees other than a simple funding cost. There are also no monthly payments due, so the progress you make on your total balance will vary with your business – i.e. Square will withhold less when sales are slow, and more when they’re strong.
How does it work?
When you accept funding, you agree to sell Square a set amount of future card sales for the funding amount listed in your offer.
Here is an example of an offer:
Funding amount: $10,000.00
Funding cost: $1,000.00
Total balance: $11,000.00
Percentage of card sales: 10%
In the example, you will exchange $11,000 of your future sales for $10,000 in funding upfront. The $1,000 difference is the cost of the funding.
Note: Numbers are for illustrative purposes only.
Square will withhold a fixed percentage rate of your future card sales until the balance is met. The percentage rate will be applied to your gross card sales, including tips and taxes paid by your customers using a credit or debit card. Also, it is applied in addition to Square’s processing fees for these transactions.
Are there any fees?
There is no interest or any fees other than a simple funding cost.
When will I receive the funds?
Upon approval, funds will be deposited as soon as the next business day.
However, please know that the time that it takes for those funds to be available to you will depend on your bank’s processing speed. It can take them up to three business days to process this deposit. For more information about your bank’s processing speed, please contact your bank.
Can I cancel my funding?
You can cancel your funding application while it is still processing.
After approval, you can cancel within two business days of your funding date.
To cancel your funding after approval:
Navigate to the Funding tab of your Square Dashboard.
Click Actions > Cancel Plan in the upper-right corner.
Click Confirm Cancellation.
Can I change my funding amount after submitting my application?
Once you submit your application, you will be unable to update the funding amount. If you’d like to cancel after it has been funded, you can do so before a decision is made on your application. You can also cancel within two business days of your funding date. If you cancel your funding request, a subsequent offer is not guaranteed.
Can I change the percentage rate after I submit my application?
It is not possible to adjust your rate after you apply for your offer. The percentage rate is tied directly to your funding offer size and is based on a number of factors, including your business’s history with Square, as well as payment processing volume.
Does applying for Square Funding hurt my credit score or require collateral?
No, your credit score will not be affected when applying for funding. Additionally, we don’t require collateral or a personal guarantee.
Can I get a larger offer?
No, we cannot offer more than the maximum amount. Offers are based on a variety of factors related to your business’s Square account, including payment processing volume, account history and payment frequency.
Does the offer expire?
Yes, your offers may change or expire as your processing fluctuates or business changes.
When will my deductions begin?
A fixed percentage of your business’ daily card sales will start being deducted two days after your funding date. The specific start date is provided in your funding agreement.
Can I end my funding plan early?
You can buy back a portion or the full amount of your future card sales at no additional cost. The funding cost does not change based on the timing that your balance is met.
You can reduce the balance through your Square Dashboard. Here’s how:
Visit the Funding tab of your Square Dashboard
Click on Reduce balance
Specify the amount
Review and confirm your amount
Information Requested for Application
If additional information about you or your business is required, we’ll reach out through your Square Dashboard and via email.
What documents can I provide?
Transactions
If we are requesting additional information about a transaction, you may submit one of the following:
Service contract
Purchase order
Signed credit card authorization form
Detailed receipt
Bill of sale
Email correspondence with the buyer
If you do not have any of the above, please provide a detailed description of the goods and/or services sold.
Financing Statement
A financing statement is a notice that a lender has a security interest in one or more of your assets and has registered in accordance with the Personal Property Security Act (PPSA). If you are asked to provide additional information about a lien, we will provide you with the date, filing number and the name of the lien holder.
If we are requesting additional information about a lien, you may submit one of the following:
Payment statements indicating the current status of the underlying loan or obligation
A letter from the lien holder stating that the merchant is current on repayment
A letter from the lien holder that the loan has been satisfied
A lien discharge statement or a letter from the lien holder that the security interest has been discharged
Why are you asking for this information?
We need to verify certain information as it relates to you and your business when you apply for funding through Square. This means that sometimes we require supplemental information in order to proceed with your application. For more information about Information Requests from Square: IInformation Requests FAQ
Eligibility for Square Funding
How do I become eligible for Square Funding?
Square accounts are regularly reviewed for eligibility. You don’t need to contact us or provide any additional information to become eligible for a funding offer. You can check your Square Dashboard at any time for more information about your current eligibility status.
Funding offer details, as well as the timing of eligibility, may differ from any previous offers.
Can I have additional Square Funding?
You must complete your plan before we can offer your business additional funding. Once your plan is complete, your account will be regularly reviewed for eligibility. Please know that new funding offers are not guaranteed. If you become eligible again, we will notify you by email and in your Square Dashboard.
Declined for Square Funding
Why was my funding request declined?
We understand being declined for funding can be disappointing. For more information about the decline, please review the email notice you received about your funding request.
When will I become eligible again?
There is no specific timeframe for when your business will be eligible for a funding offer. We regularly review accounts for eligibility. If your business becomes eligible again, we will notify you by email or in your Square Dashboard.