Should I wait for a better offer?

[nogginwater]

I have been Square 10+ years we have gotten 11 loans through Square. Prior to the last one that we received, the two before that were over $30,000 each. Last August our business suffered some defamation and slander which led to a drastic loss in sales and our last $30,000 loan took 13 months to pay before we got an offer and the offer was only for 13,000. Business has picked up and we have been processing a lot of cards and having amounts paid to the point we are at 95% and had been waiting for an offer. We finally got an offer this morning For $3500. we only owe 600 on our loan so the amount we actually would get is under 3000. I have a lot of things that I need to pay and I need to buy inventory that pretty much this 3000 will be gone in the next day or two. Should I hold out and wait and hope that we get a higher offer? Is that something that even happens if I don’t accept this offer? Sucks because I’ve been praying and waiting for an offer thinking it would at least be close to the last one, if not higher because everything has increased and I need the money now but it’s just gonna put me right back in the same situation a few days. What are your thoughts Square community?

[Doran]

It really is a toss-up.  You have to look at your numbers and see.  In the past, I've declined loans because I didn't need them, and new loans came in lower and higher weeks later.  It is all algorithm-based so it's geared to your sales and where you are over the last 12 months.  How your last loan went.  How much you're processing.  Your ticket average. etc.  Maybe try a local credit union and see if you get something better.  

[Adalynn]

Hi @nogginwater !

Thanks for posting.

I'm truly sorry to hear about the issues your business experienced last year. I'm glad to hear that things are bouncing back!

Offer availability and sizes are based on many different factors including your current payment processing volume, your customer mix, your Square account history, and more. 

If you choose not to move forward with your current offer, your account will continue to be evaluated for offers. However, we cannot predict if or when your business may receive a higher offer.

Let us know if theres anything else we can assist with!

[VanKalkerFarms]

It is a gamble, but if the 3k isn't really enough to make a dent then it might be better to hold out, or go and talk to a local bank about a Revolving line of credit.  It sounds like a connection to a bank would help you in other offers too as pulling that many loans seems like a lot and while insanely convenient they aren't the cheapest.

[Minion]

Just going to echo what others are saying as well.  $30k compared to $13k and 3K is a large difference in funding.. Like Bob mentioned, it may be worth connecting with your local bank and or a credit union for a business LOC.  While it will be more paperwork and a hard pull on your credit but it could prove to be more beneficial in the long run.  I think it would be an option in my opinion to seriously look into.

[nogginwater]

I appreciate all the responses. Unfortunately a local bank or line of credit is not an option for us at this time. Our credit took a huge hit with all we have gone through and we have been unable to get approved through anyone, which is why the Square loan has been so important to us because credit isn’t a factor. I’m not sure how the “algorithm” figures the loan amount though. Our credit card sales when we had the higher loans was around $150,000 in the year and the $13,000 loan offer we received in December our card sales were $118,000 which is where they are now, fluctuating between $118,000-120,000. So, I’m not really sure what to do. We have increased marketing, taken a part of the Square loyalty program and done what we could to try to get card sales back up. Thank you all for your input, it is appreciated!

[Minion]

At the end of the day, we are all small business owners trying to help out each other!  Yeah the Algorithm is a whole beast that you would drive yourself crazy trying to figure out.  I sorta tried before but when I saw how random (to me) it was I quickly gave up.   Honestly I think I would just continue to keep doing what you are doing without stretching yourself thin with funding.  You seem to be back on track and utilizing some good features of Square and for your business.  On the other end of it without knowing full details, I would try to correct your personal credit as much as possible.  If it were  late payments you can email/mail in a letter to the credit company asking them to remove it.  While it is no guarantee that they have to remove it, sometimes out of the goodness of their heart they will. it has been successful for me in the past with a late payment from Capital One, granted II had to email the CEo about 5x and mailed in a letter about 4x but it was removed successfully. 

[VanKalkerFarms]

That is difficult right now, but hopefully, over time, you can rebuild that.  I just worry that in the short term, taking a higher effective interest rate loan vs waiting to get a traditional bank loan is going to hurt you just as much as it helps in your situation.  
With the variables known, I personally would wait, as that 3k isn't really enough in this era to do much.