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Square Loans Decline FAQ

We appreciate your interest in Square Loans. If you were recently declined for a Square loan, the following information may help you better understand the credit review process.

Why was I declined after receiving an offer?

After you apply for a Square loan, your application goes through underwriting and verification processes to determine whether your business qualifies for the loan you requested. The specific reasons your application was declined can be found in the email notice you received from the Square Loans team.

We understand being declined can be disappointing, and we’d like to do our best to increase transparency behind this process.

How can I become eligible?

Square Loans are an invitation-only program for eligible businesses who process their payments with Square. If you received a loan offer in your Square Dashboard, you are eligible to apply for a loan. Please keep in mind that each loan application is subject to credit review, and being eligible to apply for a loan does not guarantee that your application will be approved. You can learn more about eligibility in this Help Center article, Square Loan Eligibility FAQ.

What are the reasons for being declined?

There are various requirements that must be met in order to qualify for a loan. Some of the reasons for decline include but are not limited to:

Your business has a history of inconsistent processing through Square

When we review your account after you submit your application, we look at your payment history with Square. If you have been declined for this reason, it means that your recent Square account payment history seems inconsistent.

Your business has taken fewer Square payments recently

If you have been declined due to payment history, we have reviewed your account and determined that your sales through Square have decreased relative to your prior payment history.

Your business has recent chargeback claims from sales through Square

To protect your business from chargebacks, be sure to have receipts or invoices to prove you provided your goods or services. We may decline your loan application if your business has received too many chargeback claims while using the Square Point of Sale app.

Your business is associated with another account with a Square loan that has experienced a decline in processing

When your business is connected to another Square loan, it is important to keep the connected account current and processing consistently until the loan is repaid. If you have one or more accounts that don’t meet this criteria, your new loan application may not be approved.

Your business has had transactions which are considered to be cash advancing

Cash advancing includes swiping your own credit or debit card, or those of family members, friends or associates. This conduct is prohibited by Square’s Terms of Service. Square’s Point of Sale service is designed to process payments for the sale of goods or services. It is not designed to process person-to-person transfers, or to facilitate payments between companies owned by the same individuals/groups of individuals or within companies.

Please note that Cash App is designed to be a peer-to-peer transmission product, and can facilitate the transfer of funds between family and friends.

Your business is classified as a Tax Exempt Organization by the IRS

Tax Exempt Organizations are not eligible for a Square Loan at this time. Although, SFS does not currently lend to tax exempt organizations (e.g. tax exempt nonprofits, tax exempt charities); tax exempt organizations are permitted to process payments through Square. 

Insufficient information

Your application has been canceled because we didn’t receive all the information needed by the due date. Any information requested needs to be submitted before the date outlined in your Square Dashboard. 

Is my credit score affected?

No, applying for a Square loan doesn’t affect your credit score.

Why was I declined for an additional loan?

We review every loan application on a case-by-case basis, independently from any previous loan. Even though your most recent request for a Square loan has been declined, it does not prevent you from becoming eligible for a loan with Square in the future. We routinely review eligibility of our sellers and if your business becomes eligible to request a loan again, you will see loan offers in your Square Dashboard. Offers are based on a variety of factors including payment processing volume, account history, and payment frequency.

When will I be eligible again?

We are unable to predict when your business will be eligible for another loan.