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Apply for and manage loans with fixed monthly payments

Who is this article for?
  • Sellers with the Loans permission to view, accept, and monitor the status of a loan with fixed monthly payments. Set permissions in Square Dashboard.
  • Square Loans applicants.
  • About loans with fixed monthly payments

    Square loans are business loans without hidden fees or lengthy applications. 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. 

    Many factors are considered when determining loan offers, including your Square processing history, payment processing volume, and your bank account data. If you are eligible for an offer, the offer presented is the largest offer available.

    Before you begin

    Keep the following in mind regarding loans with fixed monthly payments:

    • Applying for a loan won’t affect your credit score. However, with your permission Square Financial Services may access and review your personal credit report to help improve our evaluation of your business for any future loan offers. If you would like to opt out, please contact us and clarify that you are requesting to opt out of the credit check.

    • There are no ongoing interest charges but you 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 doesn’t change, regardless of how quickly or slowly the loan is repaid. Additionally, there are no application, prepayment, or late fees.

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

    • If your Square balance and your linked bank account do not have sufficient funds to cover the monthly loan repayment, we’ll help you pay down the rest automatically with a fixed percentage of your daily Square sales. There are no late fees or penalties.

    All loans are issued by Square Financial Services, Inc., a Utah-Chartered Industrial Bank, Member FDIC.

    Apply for a loan 

    1. Log in to your Square Dashboard and select Banking > Loans to view your loan offer. 

    2. If you have not linked your bank account via the Plaid portal, you will see an offer range. Select Get Started > Connect a bank to link your bank account to receive your loan offer. Please note, it will take up to 1 business day to generate your loan offer. We will notify you via email and in the Dashboard when it’s ready.

    3. After you receive your loan offer, click and drag the slider bar to select the loan amount that’s right for your business. As you slide across different loan amounts, the fee and the monthly payment amount will adjust accordingly. 

    4. Complete the application by filling out your personal and business information. When applying for a loan, we’re required to ask for information about both you and your business for identity verification purposes. Information about your business such as your EIN (if your business has one) as well as information about you such as your SSN (or ITIN), date of birth, and full name is required. There isn’t a way to apply without providing information about you such as a valid SSN or an ITIN.  

    5. If your business is an LLC, S Corp, C Corp, Partnership, or a Cooperative, provide additional information regarding the control and ownership of your business. We are required by law to collect this information. If other individuals directly or indirectly own 25% or more of the business, you will need to provide information about any Beneficial Owners.

    6. Review and select I accept to submit your application and accept the terms of your loan.

    Additional information regarding applications for loans with fixed monthly payments:

    • Business Managers: 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. 

    • Beneficial Owners: A Beneficial Owner is someone who directly or indirectly owns 25% or more of the business applying for the loan. 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.

    If you are unable to successfully link your bank account through Plaid, you will still be able to apply for the loan offer that is generated without the additional bank account data.

    However, if your bank is unsupported please contact us so we can opt you out of this type of loan offer. Instead, you may be eligible for a loan offer repaid through a fixed percentage of your daily card sales which doesn’t require you to link a bank account through Plaid.

    Repay a loan

    For this loan type, you’ll make 12 fixed monthly payments from your Square balance until your loan is paid off. You can pay back your loan early, either partially or in one lump sum. When making a prepayment, your payment will be pulled from your Square balance. If there are insufficient funds in your Square balance, the remainder will be debited from your linked Square bank account. However, if you have manual deposits enabled, any prepayments will be debited directly from your linked bank account.  

    These monthly debits will occur automatically according to your payment schedule. You can view more information on your next monthly payment date from your Square Dashboard.

    There are no fees for paying any portion of the loan back early. To submit a prepayment:

    1. Log in to your Square Dashboard and select Banking > Loans.

    2. Select Make a payment and choose the amount you wish to pay. 

    3. Click Continue > Make a payment.

    All payments are considered final and can’t be reversed or refunded. If you submit a partial payment, it’ll be applied to your upcoming scheduled payment. If the payment amount is more than your scheduled payment, the rest will be applied to pay down your next month’s scheduled payments. However, if you have a past due balance any payment you submit will apply to your past due balance first.

    If your Square balance and your linked bank account do not have sufficient funds to cover the monthly payment, we’ll help you pay down the rest automatically with an automatic repayment rate which is a fixed percentage of your daily Square sales. There are no late fees or penalties. Once the past due amount is repaid, the repayment rate will stop. For more information on your repayment rate, please view your loan agreement in Square Dashboard.

    Review loan collateral details

    • 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.

    • We do not require collateral for loan amounts of $100,000 or less. For loan 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. We may also require a personal guarantee for the loan on loans greater than $250,000.

    • After you have finished paying off your loan, you can contact us to 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.

    • 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.

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