Launch of Square Loans Offers Quick, Simple Access to Funds for Canadian Businesses

Rhea-AI Summary

Square has launched Square Loans in Canada, enabling small businesses to access quick funding with a simple application process.

Using transaction data, Square provides customized loan offers with a clear, upfront fee based on daily sales. A survey highlighted that 83% of small business owners find loans critical post-pandemic, and 92% found traditional loans intimidating.

Square is addressing a significant funding gap, having previously financed over USD $9 billion to businesses globally.

Positive

• Launch of Square Loans in Canada enhances funding access for small businesses.
• Simple application process with no paperwork and funds delivered quickly.
• Clear, upfront loan fee structure based on sales performance.
• Demonstrated success with over USD $9 billion financed globally.

Negative

• None.

46% of Canadian SMEs are bootstrapping by relying on personal credit cards; 92% find the traditional loans process intimidating and 84% find it complicated

TORONTO--(BUSINESS WIRE)-- Today, Square announced the launch of Square Loans in Canada, giving small businesses quick and simple access to funds and eliminating another major pain point associated with running a business.

Désirée Kretschmar, the owner of Plant Goals in Peterborough, Ontario, said that Square Loans offers easy-to-access funding that is helping her grow her business. (Photo: Business Wire)

By using transaction data, Square Loans proactively surfaces customized 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 clear, 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.

Désirée Kretschmar, the owner of Plant Goals, a thriving plant store located in Peterborough, Ontario, said that Square Loans offers easy-to-access funding that is helping her grow her business. “Our store was only 85 square feet, I could reach my hands out and touch both walls. We grew super quick in those first few months and signed a lease to move to a bigger spot; the next day, the pandemic hit but we’ve been running head first ever since — offering in-person, online sales and deliveries,” said Désirée, who has since accessed Square Loans to purchase more plants and accessories to keep pace with strong demand from customers looking to green-up their homes.

“Square Loans is so easy. Everything is laid out and it’s presented in an approachable way, as opposed to... the rigamarole another financial institution might put you through,” explained Désirée, who says she also faced skepticism when she visited a traditional financial institution in town, before opting for Square Loans.

92% of Canadian business owners who received traditional loans find the process intimidating

A newly released survey commissioned by Square¹ 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.

Although small and medium-sized businesses are often lauded as the backbone of Canada’s economy, creating up to 60% of the nation’s jobs, access to affordable funding is an unmet need that Square Loans was built to solve. The survey 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.

83% of small business owners say the pandemic has made access to business loans more critical

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.

“It’s no secret that small and medium-sized businesses face tremendous barriers when it comes to accessing funds to help them transition and grow. As the pandemic eases and Canadian business owners look to the future, they need help moving forward now more than ever before,” said Luke Voiles, GM Business Banking at Square.

“From our earliest days, Square has focused on building easy-to-use tools and services to empower entrepreneurs to succeed on their own terms,” said Alyssa Henry, Head of Square, adding that 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$6,750². In Canada, business owners can learn more and apply for Square Loans by visiting square.ca/loans.

¹ A survey was conducted by Leger among 300 Canadian small business owners/decision-makers, between March 22-27, 2022, using an online panel. The survey has a margin of error of ±7.4%.

² Figures include merchant cash advances and business loans extended by Square to US and Australia sellers between May 2014 and March 2021.

About Square

Square helps sellers more easily run and grow their businesses with its integrated ecosystem of commerce solutions. Square offers purpose-built software to run complex restaurant, retail, and professional services operations, versatile e-commerce tools, embedded financial services, buy now, pay later functionality through Afterpay, staff management and payroll capabilities, and much more – all of which work together to save sellers time and effort. Millions of sellers across the globe trust Square to power their business and help them thrive in the economy. Square is part of Block, Inc. (NYSE: SQ), a global technology company with a focus on financial services. For more information, visit www.squareup.ca.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, statements regarding Square Loans’ expected benefits to customers. Risks that contribute to the uncertain nature of the forward-looking statements include, among others, risks and uncertainties relating to Block, Inc. (the “Company”) listed or described from time to time in the Company’s filings with the Securities and Exchange Commission (the SEC), including the Company’s most recent Annual Report on Form 10-K or 10-Q, which is on file with the SEC. All forward-looking statements are based on information and estimates available to the Company at the time of this press release. Except as required by law, the Company assumes no obligation to update any of the statements in this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220428005090/en/

Media Contact:

press@squareup.com

Source: Block, Inc.

FAQ

What is Square Loans and when was it launched in Canada?

Square Loans is a new funding service launched by Square in Canada, designed to provide small businesses with quick access to loans.

How does Square Loans benefit small businesses?

Square Loans offers customized funding with a straightforward application process, quick disbursement, and a repayment structure tied to daily sales.

What percentage of Canadian small businesses find traditional loans intimidating?

According to a survey, 92% of Canadian small business owners find traditional loan processes intimidating.

How much funding has Square provided to businesses globally?

Square has provided over USD $9 billion in financing to more than 460,000 businesses globally.

What key challenge do Canadian SMEs face regarding funding?

A significant challenge is the intimidation and complexity associated with traditional loan processes, leading to many relying on personal credit.