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Square Loans FAQ

How Square Loans Work

What is a Square loan?

Square loans are business loans with no hidden fees or lengthy applications to fill out. Upon approval, funds are deposited as soon as the next business day — so you can invest in your business immediately to increase inventory, purchase equipment, hire employees, and more. All loans are issued by Square Financial Services, Inc., a Utah-Chartered Industrial Bank, Member FDIC.

What is the repayment length of my loan?

Your loan must be fully repaid within 18 months. Please note, for loans originated on or after June 20, 2018, you can view your loan maturity date in your loan agreement.

Learn how to download your loan agreement in Navigating your Loan Dashboard.

Is there a minimum payment?

Yes, you’re required to pay at least 1/18 of your initial loan balance every 60 days, in order for you to make consistent repayment progress. For most merchants with Square loans, regular processing volume will cover the minimum payment.

Note: If you just make the minimum payment, you will only pay down half your total owed balance of your loan. You will owe the remaining balance upon the maturity date of your loan, and may be debited for that amount.

What interest rate and fees apply?

There are no ongoing interest charges. Instead, you will pay one fixed loan fee to borrow the loan. The fixed fee is the difference between the total owed amount and the initial loan amount. The fixed fee will never change, regardless of how quickly or slowly the loan is repaid. Additionally, there are no applications, prepayment, or late fees.

When will I receive the funds?

If approved, you’ll receive funds into your linked external bank account in 1-3 business days, or into your Square Checking account instantly. If your loan is deposited into your Square Checking account, you can access and spend your funds through your Square Debit Card.

However, please know if you opted to have funds sent to your bank account, the time 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 loan?

You can cancel your loan application while it is still processing, or within two business days of loan origination. For more information, view Cancelling Your Loan Application or Loan.

Can I change my loan amount after funds have been deposited?

Once you have selected an offer, we’re unable to change the loan amount. If you’d like to cancel your loan after it has been funded, you can do so before a decision is made on your application or within two business days of funding. Please note, if you cancel your loan, a subsequent offer is not guaranteed.

Can I change my repayment rate after I accept my offer?

You are not able to adjust your repayment rate after you apply for your offer. The repayment rate is tied directly to your loan 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 a Square loan loan hurt my credit score?

Applying for a Square loan doesn’t affect your credit score.

Application Information

Why do you need my EIN?

The Employer Identification Number (EIN) is a unique nine digit number assigned to your business by the IRS. We will use your EIN, ITIN, or Tax ID to verify your business i your EIN, ITIN, or Tax ID to verify your business in order to process your request for a Square loan. If you operate as a sole proprietor, you will enter your SSN.

Where can I get more information on how to locate my EIN?

You can refer to your government issued SS-4 or your recent business tax returns to locate your legal business name and EIN. Take a look at [Information Requested for Square Loan Application FAQ][1] to learn more.

If I am a Sole Proprietor what do I enter for my business information?

If you are a sole proprietor, you are able to use your name and Social Security number (SSN) in place of your legal business name and EIN.

Who is considered a Business Manager?

A Business Manager is someone who has significant responsibility to control, manage, or direct the business applying for the loan, including but not limited to, a President, Chief Executive Officer, or other senior manager.

If you’re not a Business Manager, you’re required to submit additional identifying information on behalf of the Business Manager, as well as your business role or title.

Who is a Beneficial Owner?

A Beneficial Owner is someone who directly or indirectly owns 25% or more of the business applying for the loan. For example, Bob’s Donut Shop is owned 50% by Bob and 50% by Tasty Donuts, LLC. Tasty Donuts, LLC is owned 50% by Joe and 50% by Mary, both individuals. So, Joe and Mary indirectly each own 25% of Bob’s Donut Shop and would be listed as Beneficial Owners. Bob directly owns 50% of Bob’s Donut Shop and would be listed as another Beneficial Owner.

BO Info

If you’re not a Beneficial Owner, you’re required to submit additional identifying information on behalf of the Beneficial Owners. We won’t contact any listed Beneficial Owners or ask them to review your request for a loan.

Why are you asking for additional ownership information?

We’re required by law to collect additional identifying information regarding the control and ownership of businesses that apply for a Square loan.

Do I have to inform a Business Manager or Beneficial Owner about my loan application?

No, a Business Manager and/or Beneficial Owner doesn’t need to review or sign your application.

Why did I get a decline saying that my credit report belongs to a different individual?

If you were declined because your credit report belongs to a different individual that’s not listed on the loan application, it’s likely because the Social Security number provided on your loan application did not match the one on your credit check. The applicant for the credit check and the loan application must be the same individual.

Your business will be reevaluated for a loan offer regularly, and if one is available you’ll be able to reapply on your Square Dashboard.

Square Loan Collateral

Is collateral required to obtain a Square loan?

We do not require collateral for loan amounts of $100,000 or less. For loans amounts over $100,000, we may take a security interest in your business assets and file a UCC statement with the Secretary of State where your business is organized.

What is a UCC filing?

A UCC-1 filing is a publicly available record that provides notice of a security interest in certain property of a debtor. UCC statements are typically filed with the Secretary of State where a business debtor is organized. UCC statements can be filed for several reasons. For example, UCC statements are sometimes filed when a lender makes a secured loan to a business.

Square Financial Services filed a UCC statement on my business. How do I get the filing released?

After you have finished paying off your loan, you can reach out to us with a request to remove the UCC-1 filing. Please note that we only file UCC-1 statements on loan amounts above $100,000, and that it can take up to 10 business days after repaying your loan for the lien termination to be filed. Once the lien termination is filed, it could also take additional time for the Secretary of State to process the termination and provide a UCC-3 termination statement.

What if I was asked about a UCC lien but I don’t recognize the secured party?

Institutions will sometimes use a third-party to file, track, and maintain lien positions as the registered agent of the institution. Corporation Services Company is a common third-party representative. If you are unsure of what institution the third party is acting on behalf of, the best practice is to reach out directly to the third party.

Is a personal guarantee required?

We do not ask for a personal guarantee on your loan.

For any other questions or additional help, please contact us.