New offers? What percentage of a loan needs to be paid off to qualify for a new loan?

[JW10]

I’m considering a loan with a different lender because I haven’t received a new offer from Square. I still owe 24% on my current loan with square but business is growing fast. Also, my yearly sales through square are generally 250,000. This year targeted to be closer to 300,000+. Anyone have experience with this? Not a huge deal but I like the square platform for loans. I’ve had several loans in the past through square as well. Thanks for you time in advance.

[TheRealChipA]

Hi @JW10.  There is no magical percentage that triggers a new loan offer.  Having said that, being at 76% payoff of your current loan is probably not close, right now.  For the past year plus I’ve noticed in discussions that new loan offers are coming much later (90%+) and that many sellers are completely paying off their loans and then waiting a few weeks or even months for new offers.  The reasons for this are pretty apparent — the lending market is very tight, very conservative and very cautious right now — not just Square but all lenders.  Lenders are being very careful about how much in loans they have on their balance sheets due to higher interest rates as well as higher default rates.  Even sellers I know who use Toast or PayPal are telling me the same thing — loan offers are later than usual and often lower than expected right now.

I guess my point is that if you have a different lending source, the old adage of a bird in the hand being worth two in the bush fits this situation quite nicely.

[Sammie_C]

Hi @JW10!

Thank you for your post!

New offers are not automatically extended when a certain percentage of an existing loan is repaid, but your business may become eligible for a new offer when your existing plan is closer to being repaid. Most sellers repay at least 3/4th of their loan before receiving a new offer. This timing helps to ensure a significant portion of a new loan can be used to reinvest in your business directly rather than repaying your existing loan balance.

Keep in mind that we can’t guarantee that another offer will be extended before or after the current plan is complete. Repaying your existing plan does not guarantee that your business will be eligible for another offer.

Your account is automatically reviewed daily to determine eligibility. Offers are based on many factors, including, but not limited to, your current payment processing volume, your customer mix, and your Square account history.

Please be aware that aspects of your processing history, such as failed debits, chargeback history, and changes to your processing behavior may impact potential future offers. If you become eligible again, we’ll notify you directly through email and your Square Dashboard.

Let us know if you have any other questions!