Hi @nleone. You are in good company right now. For most of 2023 new loan offers have been coming later, and even when they come the offers haven’t been what many sellers expected. While there is a direct number to the loan department, you are probably aware that no human being at Square is going to tell you the exact “why” of your particular delay, nor are they going to give you any suggestions (other than keep selling!) for how to make a new offer come any quicker. That’s not how Square Loans work, nor have they ever worked that way. The offers come when the offers come. Just keep your eligibility factors in the green and eventually you should see something.
The rest of my post might be academic if you read trade and financial journals, and you can ignore it if you want, since you didn’t ask.
In the past month, I’ve read no less than a dozen articles about the current lending market. All of them come to the same conclusion — loans are scarce, lenders are being extremely conservative (especially if they have shareholders like Square does), the easiest money is found with Online lenders that I won’t name because they are loan sharks with exhorbinant rates that should be avoided at all costs, etc. Even merchant advance loans that companies like credit card companies, PayPal, Clover and, yes, Square offer have seen a marked reduction as I’ve been informed by colleagues who use PayPal, Clover, etc. In essence, it‘s a nightmare out there. Here are a few statistics:
- 50% of banks have tightened lending for all small business (less than $50M annually). That’s up 22% from last year.
- Banks are approving approximately 13% of small biz loan applications (down 65% pre-pandemic levels of 20% which was still dismal)
- Interest rates as we all know are very high, up as much as 100% over the last year for business loans, and that’s with the best credit rating possible.
- A study recently showed that over 25% of business were turning to family and crowd-funding to help them finance their plans. It’s too soon to know whether crowd-funding will turn out to be wise since, like traditions loans and investors, eventually someone comes calling for their return on investment usually before the business is really ready.
The point of all of that is to point out that Square is not in a vacuum here. The pressures of the lending environment are also their pressures. This is probably more true since Square is constantly improving and innovating their products and should do so. If they earmark funds for loans on a balance sheet, and even a small percentage of those loans go belly-up, that’s money that could have been spent on better uses as well as for rewarding their investors who also expect returns.
Like I said, the last part you didn’t ask for. I’m just providing perspective for anyone who runs across this thread, even though I am fully aware that I’m probably going to be blasted for it by someone here. But I feel that it’s best for everyone to understand reality and move forward from there rather than basing business decisions on wishes and hopes.
Regardless, I wish you well and I do hope that you wake up one morning soon and find that “you have a loan offer” email in your inbox!
Chip A.
Square Expert & Innovator and member of the Square Champions group. (But NOT a Square employee, just a seller like you)
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