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Square Loan Eligibility?

I am 72% of paying off my existing loan. I need to get another loan for expansion. Current loan could be paid off now. I am told that no one makes offers that it is completely automated and thst no one knows if I will get another offer. How is a business supposed to use Square without any predictability? I am over Square, I will be deactivating my account and using a bank that has true customer service and valid lending practices.

 

Goodbye Square

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You are not alone in your frustration. I've been paid in full 100% on my 5th loan for 5 weeks. No new offer, can not apply, and can not get answers as to why. Just generic replies. Many people are moving to banks, and paypal. 

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Square

Hi @Jholland1576 and @Kimmiesue12001! Thank you for posting! I understand your frustration regarding loan eligibility. We wish we could be more transparent, but we are unable to go into specifics about the requirements of qualifying for a loan because it’s based on a proprietary underwriting model.
We are constantly working on improving our products and services for our Merchants. I will be passing this valuable feedback to our team, but please let me know if there's anything else I can add. Thanks again for taking the time to share your experiences.

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That is the problem, you guys keep saying the same thing. Every other lender in the world communicates loan qualifications. Not Square

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I seriously doubt that's true.

 

I've applied for 3 car loans, 2 business loans, and 1 mortgage over my life, all six loans through different, big national banks. Never once have they revealed their exact algorithms or decision points, other than vague "well, this is good and that is not as good" generalities, just as Square provides.

 

I doubt any bank or other loan issuer ever could give a clear cut-and-dry answer though, even if they wanted to, because what precise metrics one must meet to qualify for a loan likely fluxuates constantly based partly upon the overal economic environment at the time, not just the applicant's data.

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At first I thought Square Loans were great, they helped my business tremendously; so much so that i increased the cards that I take and went away from some of the ACH processes that I had previously used. Unfortunately it seems as though this has actually negatively effected me with whatever the square model is for eligibility requirements. When I was processing under $75,000 i received loan offers regularly, thus I increased my processing to over $300,000 from regular and over 70 new customers per month; I thought it made sense. However; I began to be denied for square loans; not because I haven't paid them back; on the contrary... my increase in volume allowed me to pay each offer back in roughly a quarter of the time. It seems that I am being denied because or so I am told that due to me processing a large number of Card not present transactions; this makes me in increased risk. My issue here is that I have not changed anything. So the transactions that are now viewed as high risk are the exact same transactions that paid off the previous 6 loans given to me; in about a quarter of the term. The only thing that i can think of or concede is that for about a 5 month period we went from 0 chargebacks to about 40 as we addded over 3000 new customers and needed to make some adjustments to our refund policy as we transitioned from a primary ACH and Cash business. But despite correcting those issues on going back to 0 charge backs in the past 6 months or so. We still have been denied for offers. It seems as though all answers are generic and all of a sudden my business is not one that square likes to work with in regards to capital. Although they will continue to process my transactions and take the fess associated. I am interested in knowing anyones exoerience with Paypal in regards to business and working capital. And I have recently began to entertain some companies that focus on the towing industry as well as others like clover who pass the processing cost on to the customer. and a couple who are willing to negotiate on the rates of Card Not present transactions. I had previously been loyal to square due to the assistance with capital; however, it seems that they have taken a turn against businesses that process like mine. I would welcome the opportunity to be pointed in the right direction by others who process a large number of card not present transactions. especially if you are in the tow or transport business. 

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I have to say I've never had any issues with square capital until now. We've have 3 loans and all paid off. Last one paid off 8 days ago and still no offer. I'm kind of ticked off about this because we have processed [Personal Information Redacted] year to date and about 70 percentage are new customers. We also use PayPal and have processed about $70k through them for the year and our last loan with them was for $20k and here we are still waiting on another square capital loan. I don't like how square won't give you any information at all why your not eligible. We haven't had any charge backs so the only reason I can think of would be because [Redacted]. Pretty stupid reason if that's the case, not really our fault that square makes you change the bank account in two separate locations, yet doesn't tell you this when you change.

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well, Im now at 78% and no second offer. I created an account with PayPal, I know it will take a while to get a loan through them, but at least I know what to do to become eligible.  Im pretty over this issue. I keep checking my email, but no joy. Lending shouldn't be like this. If Im not eligible, fine, but at least tell me why and what I need to do to become eligible in the future 

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78% is about the time when they might offer. (That's when I used to receive offers) There is still hope for you! Dont shut the doors yet.... I'm 100% paid in full now for 6 weeks. 

Squares underwriting guidelines are proprietary...they will not ever release them. Basically from what I have read...proprietary underwriting 

is when a firm or bank invests for its own direct market gain instead of earning commission dollars by trading on behalf of its clients. So if you or another merchant is high risk or they arent making enough $ loaning to you you arent worthy of their loans. I think they are better off loaning to merchants that pay their loans back quicker then they offer another loan early and add on another fee at a higher amount then another then another....then bam! No more loans. How many people are on here saying whoo whoo I just got my 12th loan! I've seen none...I think I've seen one person that's gotten 8 that's about as high as I have seen. 

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Well, it seems to me that having access to the program when I really need it would be beneficial to Square. I cant help but think that by not giving sellers any information about eligibility makes Sellers go traditional routes instead of waiting for Square to possibly make an offer. If I have to wait much longer, Ill have to go to my bank. Then, Square will make an offer and ill decline because Ive been funded through my bank. It just doesnt make sense to me.

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I wish I would have read these posts before I paid of my loan in hopes to get a new one. In the past I’ve gotten an offer pretty fast. Since it was taking longer than usual I came to these discussions. Im opening a second location but if I’m not being offered a new loan that’s pretty much put that to a stop. I could of used the money I paid off to get off to a small start at least. So heartbreaking. But still keeping my fingers crossed that it comes through. 

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It just doesn't make sense that Square keeps the lending qualification confidential. If none of us know how or when we are eligible for lending, it leaves us (sellers) to draw our own conclusions, which leads us to do things that hurt our bottom lines such as using our extra money to pay off loans in effort to aquire a new offer.  As in your case. I've also made extra payments in effort to qualify for a new loan to no avail.

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And myself and quite a few others on these discussions have collaborated and came to the conclusion...negatively commenting on the community forum or expressing our feelings on these posts probably has contributed to not getting offers. As much as they would like to say it doesnt....the odds do not add up. It absolutely makes a difference....as you can see I dont care or need their funding I went to my bank and got traditional funding with better terms. 

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Well,  if Square doesn't disclose their lending qualifications how do we know if the qualufications are even fair. You are correct, I have been quite vocal on this issue and it is quite possible that I and others are being deliberately left out of the program. To me, it seems like they would want to identify those who actually want lending versus just offering loans indiscriminately or worse discriminately.

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You would think...but they dont care...they will bring it to the attention of their team. Hahaha....

We understand your frustrations. Um no you dont (you copied and pasted that square rep that sounds like a robot)

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Well I certainly don’t want to get excluded. I haven’t had any issues with using Square. Just got nervous reading everyone’s story lol I guess I got accustomed to the process and assumed it would work the same as in the past. It would be nice to at least request a review and see what we could do to improve our odds if we’re not getting offers. 

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Hope you get one! Plan for not gettting one though! Dont make the same mistakes i did and Expect consistency

 

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Try being paid off for over 4 months. We were denied for a lein on our business which we had during other capital offers (we have had six I believe!)  So we paid off a debt we had and didn't know about, and have confirmation it is all paid off.

 

When we contacted Square Capital, they copied and pasted a "Thanks for reaching out" email. It is super frustrating. We have been in business 6 years, and have used Capital very wisely. We are at a point of expansion and would be nice to use the Square instead of going through a loan from the bank. However, a real answer from someone would be great as well. Hopefully Square still is doing Capital Offers, anyone know?

 

 

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Try 6 months! Square is not coming to Save you , Operate without it, Keep Processing if you care to, I am, i love the Square processing, Indifferent about Cap now, Nobody is stupid, Once you reach your limit of "Properiety and ALgorhytms replies in the email, hopefully you what you need to do. Square processing is great, Make Square Capital Great Again

 

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I did end up getting an offer but for about the same amount I paid off lol maybe their formulas have just changed because all my sales are up from last year. So, I’ll just keep processing and growing my biz as usual. 

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Same here.

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