So, I’m pretty sure that this post won’t matter much, since this entire thread seems to be about nothing other than venting and complaining about how Square is disappointing everyone. But I’ll give it a try… again. I’m not going to say anything I haven’t said before, but what the heck. Maybe one person will read it and actually have a light bulb go off! LOL
Tuesday, I got an offer. My current loan was at 70% paid at that time. Here are a few things about my business:
- My new offer is 30% higher than my current loan.
- Business is up 35% over this time last year.
- My card processing volume is up 41% over this time last year.
- Ratio of card sales to total sales = 80%
- Length of time to pay 70% of my current loan = 8-1/2 months.
- I am seasonal, so actual time to pay 70% of my current loan was about 4 months, give or take a few days. Obviously, during my off season I paid my minimums in full, and on time.
- None of this matters to me since my policy is never to take a new loan until my current one is paid in full. This is because I do not want to pay a fee on top of the fee I’ve already incurred with my current loan. If I take a new loan early, I will be paying higher fees than if I wait. Paying higher fees for money I’ve already spent is ludicrous.
I know of two other people who have received loan offers under similar circumstances, a few whose new offers were delayed and lower, and a couple of others who have not received any offers at all after paying off their previous loans entirely months ago. Since they are all friends, I know their situations and that has allowed me to make a few conclusions.
- Square doesn’t say this, but it seems very obvious — If card processing volume is not significantly up, then it seems obvious that new loan offers will not go up.
- In fact, flat card (or barely growing) volume seems to be a red-flag that indicates that the business is not growing and possibly in distress enough that a lower new loan offer is warranted.
- Sellers with high cash volume (which Square can’t count since they can’t count on that money, ever) seem to be received lower (or even no) new offers. How high is high? I don’t know. But before the pandemic I was a 50-50 cash-to-card business and my offers were always both low and slow. It wasn’t until my card volume got up to at least 70% of total sales that my offers really increased.
- Extra payments don’t seem to move the meter at all. I know one person who has done that religiously when his cash sales were really up. While it helps him stay on top of his payments, Square can not count on him always doing that, nor should they. They rely entirely on card sales volume. He understands this because we’ve talked about it a lot.
- Lastly, none of this is a surprise. The lending market, especially for sweet repayment deals like Square offers, is dried up and hunkering down in fear. Every lender is watching the market indicators in fear that a recession is coming and that it won’t be pretty. Thankfully, our idiot politicians did their bare minimum jobs and didn’t make things worse, but things are still not looking good for lenders who have lots of questionable loans, right now. The market looks a lot like it did just after the pandemic fears started ramping up, and we all know how that turned out.
Good luck, everyone. If you find greener pastures for quick money, then good for you. Given what I read every day in the financial journals, there is not much of that anywhere. I hope you all make it through, whether or not you get a satisfying loan offer.
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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