Square launches loans service in Canada

By using transaction data, Square Loans proactively surfaces customised offers to eligible sellers, providing them with a straightforward application process, where no paperwork is needed, and delivering funds as soon as the next business day. Businesses have one upfront loan fee, which is automatically paid back as a set percentage of daily card sales with Square – so sellers pay back more when sales are strong and less during slower times. The loan fee never increases for the seller, so the amount they owe is always clear, as stated by Square.

A newly released survey commissioned by Square shows that roughly 7-in-10 Canadian small business owners have never accessed traditional funding, preferring to ‘bootstrap it alone’. According to the survey, 46% admitted they’ve been forced to rely on personal credit cards; while one-in-five have accessed loans from friends and family to keep their business going in the past. The survey also revealed that 92% of business owners who had received traditional business funding found the process ‘intimidating’ while 84% said traditional business loans were overly ‘complicated’. Overall, 72% reported they were not happy with the repayment process for traditional loans.

One-third of Canada’s small business owners reported that running their business throughout the pandemic has been ‘a challenge’ but they are ‘proud to have made it through so far’. More than eight-in-ten entrepreneurs (83%) surveyed said that the pandemic has made access to business loans more critical now than ever before while 51% said that the current business climate was a key concern when considering traditional loan repayments.

48% of surveyed entrepreneurs say they feel positively about being eligible for an easy, as early as next-day access to a business loan with flexible repayments. Almost one third of respondents (29%) believe it would help them feel less stressed as they move forward and look to grow their business long after the pandemic.

Since the initial launch of Square Loans in the US and Australia, Square has provided more than USD 9 billion in financing to more than 460,000 businesses, with an average loan size of USD 6,750.