Loan Offer Then Denial – Confused and Frustrated

[Cauldron]

I’ve been a long-time Square user and have successfully paid off multiple Square loans. After a great sales weekend, I was thrilled to see a loan offer for $48K appear in my dashboard. I immediately started planning for business expansion and made some deposits, only to wake up this morning to a denial.

The reason given? Chargebacks. I’ve had two chargebacks this year from customers falsely claiming they didn’t receive services—despite my having clear proof.

My Chargebacks/Payment Disputes metric was showing GREEN, so I assumed I was in good standing. If chargebacks were an issue, why extend an offer in the first place?

Now my account shows “Needs Work” under prior loan applications, making me even less eligible for future funding.

I have a few key questions:

1. How long will this “Needs Work” status impact my ability to reapply?

2. Are chargebacks counted on a rolling basis or across my entire history?

3. Has anyone successfully appealed a denial, or is Square’s decision final?

I love using Square, but if I’m ineligible for funding, I may need to explore other processors that offer capital after I wrap this current loan. Any insights from the community or Square reps would be greatly appreciated!

Has anyone else experienced this? What options do I have?

[TheRealChipA]

Hi there @Cauldron.  So I can’t offer insight as to why the chargebacks weren’t considered by the loan algorithm when the offer was sent out.  That definitely sounds like a glitch, but the result is consistent with Square’s policy about chargebacks.  Eventually, those will not be considered anymore, as long as there are no others — or at least no significant chargebacks.  None of us knows the exact time before “needs work” will change, but I do know that chargebacks have a specific look back period, though what that period is is not known.  I’d imagine it is on the order of months, rather than years, though.  Also, appeals (if they can be called that) are rare and rarely successful.  This is not Square’s decision (as in a human) but rather the algorithm’s decision (blessed be the sacred code.  Ha.). You can try contacting the Loan Department directly, but don’t be surprised if there’s nothing they can do there.

I can, however, offer different insight.  I’m sure you are aware the the lending market in general is circling the wagons, even for merchant advance loans like Square’s.  Yes, other processors say that if you go with them you will immediately be eligible for business-saving loans, etc.  Don’t believe it.  This is usually marketing bait-and-switch.  I’ve known people who did it and are still waiting months later.  Those that did get loans found them to be very low, because when you switch you lose all processing history.  Your best bet is to stay put, but of course that’s just my opinion.

I recently was able (on the strength of my business’ credit reports, alone) to secure a line of credit with my local bank.  And I’ve started using equipment financing loans as I expanded my business in the past year.  Honestly, for expansion and such those are often the best, with the best terms.  And, if you know your bankers, your chances are better — especially in this conservative and tight credit market.

I hope some of that helps you decide how to proceed.  Whatever you decide, I wish you well.

[Twpchair]

Hello, like @TheRealChipA stated as far as chargebacks goes from everywhere I’ve looked there is no set 1 per month or quarter type thing nor a timeframe from Square which it drops off. I did search and found going by other users only the good majority was 4 months and received a new offer and nothing else was negative during that period. Of course, no guarantees as 1 was a year waiting and a few were just a month or two. That is users posting only. 2nd I’ll agree with @TheRealChipA 💯 and appealing is almost always a big no and that decision is final!  Not worth the stress. How long ago was your last chargeback prior to your offer?

[Cauldron]

Twas about a week prior. I submitted all of my documentation - showing conversations between myself and the customer, including screen shots of them posting from the event / attending the event, which directly counters their “this is a fraudulent charge / unauthorized charge” spiel and it is still in the deliberation process. Just really disheartened that scam artists like that exist who can affect our ability as a business to further expand by filing bogus chargebacks. Their wanting to attend events for free cost us $48K which could’ve truly helped our business 😞

[Twpchair]

Yes, I agree 💯 and unfortunately, I see it more and more each day. I don’t know if they know how this affects us as small business owners or don’t care honestly. But unfortunately it does as you see. I wish I could tell you that it is no big deal appeal it and be on your happy way. But with this appeal not even over with or finished yet. I don’t think imo it would be worth an appeal with a current one not settle or final judgement on it. I am sorry and that’s a nice offer too. Positive note, it does drop off and we all learn no more of this nonsense and I wish you all the best and hopefully the next offer will be better!

[LeeJ1968]

There are 3 criteria in which if you establish all 3 would mean you would prevail in a lawsuit against the person who accused you of fraud. 
1. can you demonstrate harm, specifically lost wages

2. can you demonstrate falseness of the claim against you

3. Can you demonstrate your good faith/innocence

it sounds like you meet all 3 requirements.  I’m not a big fan of litigation but you may have a case for slander/libel/defamation that allows you remuneration. It also may serve as a powerful deterrent for future false accusations. Sometimes people just keep doing things like this because they continue to get away with it. Do you have a friend or family member that could give you inexpensive (or free) legal advice?

[marielmt]

Hi @Cauldron!

Thanks for posting on the Seller Community. 😊

We appreciate your interest in Square Loans and being declined for a Square loan in the past may impact your eligibility. Keep in mind, loan offers are also based on a variety of other factors such as current payment processing data, customer mix, and Square account history.

We do not have a specific timeframe for when another loan offer may be available, but continue to monitor accounts regularly for eligibility.

Don’t hesitate to contact us directly if you have further questions or concerns!

[Jeromegame]

Not with charge backs but I did the same invested money in new materials then they just deny me because of not having a physical address for my online store . So I live I n a tiny town of 250 people in northeast oregon and the post office takes care of the entire town ,meaning nobody get bills with their physical address here well even though I have paid off several loans I need to provide somthing with a physical address for my business . I have been on the phone about o ut this for 2 days now amd even asl to speak k to somone that b as authority to fix this amd I just get a runaround .

[Twpchair]

I have seen more and more pop up. A couple of things worked for them—no guarantees here, but passing along the information. I also live in a small community and on a road not maintained by the county. I do have a physical downtown location with a physical address, but our house can be an issue. Even though you don't have traditional mail coming to your house, it has a physical address on file. If you have an ambulance service, MMR, or whatever comes if you had to call 911, they will direct you to the reflective road/driveway sign with your house number to find you easily. That also gets registered with the county and township. Those are all free, and they print you up a letter from the county and your township with your name and physical address. Also, the good old regular post office can provide an official letter. Even our FedEx and UPS will deliver to our neighbors when the post office doesn't come down the road. Inside should be your return label slip. They still have to drop off large packages too big for the post office to handle. Lastly, if you rent/lease, your landlord has a copy of the taxes and could make a copy, and a copy of your lease agreement with that physical address on it. These are all ones that users said worked fine. Once Square received the paperwork, they went back into the algorithm. Every house has a physical address; it's just getting to the right one the fastest. Good luck!

[Abby_M]

Hi @Jeromegame 

Thanks for taking the time to reach out to us.

Square Loans applications are reviewed on a case-by-case basis. The review process may have changed from any previous Square loan application reviews due to regulatory requirements. It looks like you have been recently approved for a new offer Congratulations!! .

Please contact us directly, our Square Loans line is open between 8am-5pm PT Monday-Friday if you want to give us a call.