Has anyone's loan offer amounts signficantly declined? Or even disappeared completely?

[arthurktripp]

Up until February we would consistently have loan offers between $60K and $85K. We were actually planning on taking one this spring. We, I guess naively, figured that because our sales were stable and we've been with Square since 2019, that the amount would remain steady. Of course, literally the week we were preparing to take the loan we got a new offer at $15K. Seems to have decreased right as the run on Silicon Valley Bank happened.

Wondering if anyone else has experienced the same thing? So confusing since the Square loan process is so opaque. I assumed it could decrease, especially with the economy as it is, but within a week or so it dropped at least 75%. We've had to explore other companies and options due to it.

[TheRealChipA]

@arthurktripp I’m hearing stories like these all over the place.  I mentioned in another thread that the regional bank I do business with for a few businesses (and personally) has significantly cut back on the amounts of loans and lines of credit they are issuing.  And, in some cases, they are actually calling lines of credit due and payable with margin calls.  I doubt it is related to SVB, since Square did issue a statement (see screen shot below) that said  as much and we either have to accept this at face value, or don’t and move on.  I’m choosing to accept this at face value.

I agree that 75% seems excessive, but there are other factors than the economy at play.  I have no doubts, for example, that Square has a pain threshold of how much in outstanding loans it wants to put itself on the line for should the economy go belly up as interest rates keep climbing.  In my regional bank’s case, that’s the biggest issue — they have “used up” the amount of money they can have on their balance sheets as loan funds, and they just aren’t willing to go beyond that amount.

I know this doesn’t help your specific point, especially about the 75%.  I’m just pointing out that our history with Square and Square Loans doesn’t seem to be a barometer for future performance.

Regardless, I wish you well as you explore other options.

[arthurktripp]

Thanks for the info, I had not seen that statement. I suspected one bank going down wouldn't have much of an effect on Square, especially since it sounded like most of the banks clients were made whole by the government. I did figure interest and default rates have to contribute significantly, just the facts of the financial world. It is still a bit confusing to me, like you referred to, not that our offer decreased, but the size of the decrease. I've seen others on the forum talking about their offers not coming in like usual, or being more difficult to get qualified, but nothing exactly on huge decreases such as ours.

I guess I wish square would be a little more transparent on how they get to the numbers they do, not knowing why the 75% decrease happened is half of my frustration. It's something I appreciate dealing with other lenders, they're not necessarily going to give you their whole equation, but it's much more transparent with regard to how an offer gets built.

Appreciate your info and well wishes either way!

[alexandriak]

Our latest offer did decrease too but not as much as yours. I'm so sorry. Maybe you can reach out to square and ask questions directly related to your loan offer. They may have more insight for you.

[ASPettus]

My loan offer dropped by 50%. I'm definitely not playing the waiting game in the future. 

[robertajones]

I was given a loan offer. First I paid off the original loan.  When I went to take advantage of it, the loan offer was gone.  Did I wait too late.  

[TheRealChipA]

Hi @robertajones   unfortunately Square makes it very clear that if you pay off existing loans after you receive a new offer, the offer  expires immediately. See below for a screen shot of one place they say this, but I’ve seen the same statement in a half dozen places. So, now all you can do is wait.  It will be up to 7 days before your account is reevaluated for a possible new offer. 

For the future, always remember to either take the offer, or wait until you’ve paid off the existing loan if you want to max your loan proceeds. I waited my last two offers and never lost an offer. In fact my offer got larger the longer I waited. 

[ASPettus]

I tried the waiting approach and my loan offer got smaller. It could go either way and that's so odd to me. 

[Twpchair]

Yes, I've seen it go both ways. Or none at all. We have a few now 4/6 mths totally paid off and no new offers. Good luck!

[Dollys215]

I was wondering about that exact thing. I received an offer today, but it came in lower than I hoped. My current loan is almost paid off. I’m wondering if I wait until the current loan is paid off will my current offer go higher? How much higher did your offers come in if you don’t mind me asking. 

[Twpchair]

It could but there are no guarantees either way or how long before that next loan comes in. Once you pay it off (you personally) not by credit card transactions it's 7 business days for them to apply it and then you go back into the process of waiting for a new offer. They don't just review day 1 it clears and send out a new offer. It could go up or down in the amount. I've seen it go both ways. We have others on here totally paid off for 4/6 mths and no new offers at all. If you need it I would take it, if not wait it out and see. Best of luck!