Square Launches Small Business Lending Product in Canada

April 28, 2022 Enterprise, FinTech and Alternative Finance, Fintech Services, Innovation and Resources, Leadership, Productivity, Competition, Human Capital, Health, Marketplace Lending/P2P, Online Lending, BNPL No comments

Square | Press Release | Apr 28, 2022

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.

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.

Luke Voiles, GM Business Banking at Square:

“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."

See: Lending Loop Launches ‘Loop Card’ for Small Business Cross-border Transactions

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.
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.

See: Square launches small business banking

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.

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