I’m hoping I can dispel a few myths here regarding Square Capital loans and the lore surrounding their approval algorithm. When I was wondering if I would ever get a second loan, I came here for answers. The posts here all seemed dismal and offered zero hope. I believe this is the classic case of people not writing about their good experiences and posting only about their woes. So here goes...
After paying off my first capital loan early (halfway through) I began to read on these forums that this move was a big red flag and the likelihood of me being offered a new loan was slim to none. Countless threads here confirmed that paying your loan off early pretty much seals your fate.
I then happened across various other threads here offering other reasons that your access to future loans may dry up. One topic was chargebacks. A person here stated that one chargeback caused them to become ineligible for another loan. Certainly this was speculation since Square will not discuss their algorithm or denial reasoning, but I can say in my case, a chargeback had no effect.
I also read that new offers come your way at a minimum of two weeks after your last loan was paid off. Also not the case in my situation.
As stated earlier, I paid my loan off when it had a balance of 50%. Just a couple of days later I received my first chargeback. After reading everything here I was certain that I would never receive a second capital offer. I thought I would check my dashboard in two weeks anyway, just in case. To my surprise, in less than a week I had a new offer and realized I had been worrying for no reason.
My lesson learned here was: Be one of the people sharing good news and experiences. Hopefully this post helps someone out there who is nervously sifting through these forums, hoping to get the next boost for their business from Square Capital.
