Since it was launched in 2014, Square Capital has served as a cash advance program for eligible businesses. Initially, merchants were invited to participate based on the volume of volume of payments they processed through Square and their “history” with the company.
Two years later, Square Capital is undergoing a metamorphosis. Not only is the program expanding. It is now transitioning from a merchant cash advance to a flexible loan product.
The company recently announced the transformation of Square Capital expanding it to help businesses secure funds as soon as the next business day.
Aside from the shift of the advance program to a full-blown flexible loan program, the company insists little has changed.
“So you might be wondering, do I need to do anything different? Nope. Just check your Square Dashboard to see if you have an outstanding offer through Square Capital,” writes Jacqueline Reses, Capital and People Lead at Square on the company’s official website.
Understandably, market response to the new flexible financing program has been quite encouraging. Square stock went up by 1.63 percent to $13.09 soon after the company announced it will begin offering flexible loans through its Square Capital platform.
Square Capital Expands
The company has stated that “Square Capital is still as fast, simple, and transparent as ever,” which means businesses don’t have to go through any lengthy paperwork to get funds. Repayment will happen as a fixed percentage of a businesses’ daily card sales, and the cost of the loan will be a fixed dollar amount.
Since its launch in 2010, Square has emerged as one of the most popular payment processing solutions for small businesses. But the increased focus on lending may have an even greater impact. The move makes the Square Capital program one more in an ever expanding number of options small business owners and entrepreneurs may take in securing financing for growth.
The company recently reported a net sales increase of 49 percent year over year in fourth quarter earnings to a total net revenue of $374 million.
All loans offered by Square Capital will be issued by Celtic Bank, a Utah-Chartered Industrial bank.