2 Capital Loan Offers Denied!

[AJC2021]

I've been with Square for about a year and a half and on average process 20k a month in sales. I have been offered a chance to apply for two loans within this time, on two different occasions. I was excited to apply for the offers and very disappointed to be denied! As I understand these only offers and not guaranteed. However, I am confused that the algorithm is not capable of determining someone’s chargeback rate beforehand. I was told by customer support their system makes offers based on account history data. It’s very discouraging that Square's system makes offers to it’s customers giving them false hopes of working capital during these times just to decline them in the same day. Maybe their system should do a more thorough review as this is misleading. I will consider taking my business elsewhere in the event this happens. The decline emails Square sends are extremely vague and as a customer that pays thousands in processing fees, I would at least expect a personalized approach or at least a solution or pointers for future consideration. I just expect a little more after 1.5 years of doing business with Square but that’s just my experience maybe yours will be better. If you're a merchant or small business owner there maybe be other companies out there that value their customers enough to extend credit to them without the hoops and loops!

[Minion]

Hey @AJC2021 

Sorry to hear about your Capital Offer denials.  From one SB owner to another, we all know what it's like to be in reach of something, but not able to grab it sometimes.

As a business owner, seeing a company you use, that offers Capital is like seeing a unicorn.  You work, you pay your dues, and hopefully you'll see the day where you will get funded for your hard work and efforts.  

I just wanted to express my opinion and experience when it comes to Square Capital, and nothing personal towards you or Square, just my observation  of it.

Although you weren't approved and funded, being offered 2 loans over 1.5 years, is probably more than most people have been offered, especially given the pandemic and every institution tightening down on their underwriting.  I'm not sure what you were offered, or %, but maybe it was a blessing in disguise.  If you ran the offer, and compared it the % repayment and based off how many days it would have taken you to pay it off, your interest rate may have been higher than you think as it probably would have been paid off well before 12 or 18 months. 

I tried to "figure out" their algorithm some time ago, (running and recording all sales through Square, ie, CC, Check, Cash etc) doing so didn't change the outcome or increase any amount offered. Their communication on denials, or even qualifications are definitely vague and unfortunately the only thing you can do is keep processing and doing business as usual.

 I ended up getting in with a couple credit unions (NFCU,Penfed) as my main banks for Square to deposit into and have built a good relationship with NFCU on the business side and have extended a business line of credit which is more than sufficient.  Square offers some of the best products and services overall for free and low monthly costs to help us run and manage our business  and is close to an all in one solution. I wouldn't give up on using them for their services and products as long as they suit your needs, but there is also nothing wrong with expanding and exploring other actual banking options who you can use along with Square to help build your business. 

Hopefully some of that helps and I'm always down to chat about different options when it comes to business. 

Cheers