Earlier this year, Square began testing Square Capital, a cash advance program for business owners. On Wednesday, the company formally launched it.
There’s no application process with Square Capital, and businesses get their money the next business day, according to Square. Businesses pay the company as a set percentage of their daily card sales, so they pay more back when sales are up, and less when they’re down. Businesses are expected to have their advances paid back in about ten months, though there’s not set time frame. These are simply the offers Square tries to give.
“During the pilot program, thousands of sellers used Square Capital to buy equipment and inventory, hire more employees, and add new stores. Many neighborhood businesses with access to alternative funding sources chose Square Capital for the simple and fast process,” Square says.
“In a recent survey of over 1,000 Square Capital businesses, 85 percent said they are ‘extremely likely’ to recommend the product to a friend,” it says. “Square’s Capital pilot advanced tens of millions of dollars in capital to thousands of Square businesses. Sellers actively running their business with Square may be able to participate in Square Capital, based on their processing volume and history with Square. The first step to becoming eligible for Square Capital is to download Square Register for either iOS or Android and start running a business with Square today.”
Re/code reported on emails participating merchants received from the company during the pilot testing. Square gave an advance of $7,300 to one merchant, and charged them $1,022 or 14 percent, so the business owner would have to pay back a total of $8,322. The business owner was told they had as long as they needed to pay the company back.
Image via Square