Digital payments giant Square is launching Square Loans in Canada, giving small businesses quick and simple access to funds and eliminating another major pain point associated with running a business.
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.
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.
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.
Square’s 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.
“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 $6,750.
Starting today, business owners in Canada can apply for Square Loans online.