Small businesses will soon have an alternative to traditional business loans, thanks to a new service offered by Square, a mobile payment company.
Through a new service called Square Capital, Square will give small businesses the option to get cash advances as soon as the next business day without having to fill out an application.
Standing by their motto, “make commerce easy,” Square will reach out to their merchants who may be able to use an advance and use data to figure out what amount to offer them and what percent to payback.
Choosing which companies to reach out to using data from their previous sales processed through Square allows Square Capital to find candidates based on their cash intake, growth and other finances.
For example, if Square offers a business a $10,000 cash advance, the business may pay back $11,000 through their future credit card payments.
“Businesses automatically pay Square as a set percentage of daily card sales, so they pay more when sales are strong and less if things slow down,” states a press release from the company. “Square creates unique offers for businesses with the expectation that sellers will complete their advance in approximately 10 months, although there is no set time frame.”
Square has offered this program to some of their network as a pilot for the last few months and some positive reviews have come in.
Art and clothing company, Zero Friends, has already gotten two cash advances during the pilot program of Square Capital. One of the artists told TechCrunch that the advance was much easier to understand and to pay back than a typical loan.
Using the loan to double their inventory before San Diego Comic-Con, Zero Friends ended up selling out of their products during the convention and paying back their loan in about six months, according to Mashable.
For now, Square Capital will only be offered to businesses already using Square.
Please Leave A Comment
Related posts:
Car Companies Offering Deals to College Students, Recent Graduates
SeaWorld: Initial Public Offering or Private Sale – Entertainment Sector Strong
Credit, Debit, Electronic Payment Methods Replacing Cash in the U.S.
Instagram to Stop Being So #Square
Pinterest Will Start Offering Ads to All on New Year’s Day