Square Tests ‘Square Capital’ Cash Advance ProgramBy: Chris Crum - March 4, 2014
Last week, a report from The Information said Square was testing a product to give merchants “thousands of dollars” in capital to help them grow, and that it was considering another round of funding that would delay an IPO.
This week, Fox Business reported that “people with knowledge of Square’s finances” say that the company is not ready to go public this year.
Now, Re/code is reporting that it has viewed two emails sent to business owners, which describe Square Capital, which offers to provide business owners with $7,300. Jason Del Rey explains:
In return, Square charges the owner $1,022, which works out to 14 percent of additional cost. As a result, the business owner will end up having to pay Square back $8,322 in total.
Square tells the business owner he or she has as long as needed to pay Square back. “Your $7,300 in Square Capital will only cost $1,022 regardless of how long it takes to pay back,” the email reads.
Square reportedly takes the money via 10% of credit and debit card sales each day until the money is paid back.
Square has made no formal announcement about Square Capital beyond the emails. It is, after all, just a pilot test. In fact, the company isn’t even commenting on it at this point.
I’d imagine that we’ll at least be hearing from businesses about their experiences with it before too long.
Image via Square