Square Capital Review

Square Capital is offered by Square Inc, a direct lender founded in 2009 and based in San Francisco, CA. Square Capital is available in 22 states across the USA.

What APRs does Square Capital offer?

The cost of merchant cash advances is typically marketed as a factor rate, not an APR. Square Inc offers merchant cash advance with a factor rate starting from 1.10 to 1.16. The higher the factor rate, the higher the fees. For example, an advance of $20,000 with a factor rate of 1.5 will have a total repayment of $30,000, which includes $10,000 in fees.

However, we ran the numbers and we estimate it has an equivalent APR that ranges from 10% APR up to 16% APR.

Does Square Capital charge prepayment fees?

No, Square Capital does not charge prepayment fees. This means you will not have to pay additional fees if you decide to pay the Square Capital off early.

How much cash can you advance from Square Capital?

Cash advance amounts start at $300 and go up to $100,000.

What types of repayment method does Square Capital accept?

Square Capital accepts the following repayment method from the Merchant:

• Split withholding
• ACH withholding

How often does Square Capital process payments?

Square Capital processes payments daily based on your business's credit card transactions. This means that a percentage of your transactions will automatically be sent to Square Capital as payment for your cash advance until the full amount is paid.

Does Square Capital charge an origination fee?

Yes, Square Capital charges a origination fee.

What is the minimum repayment amount required by Square Capital?

Square Capital requires a minimum payment of 5.6% of the total amount advanced from the merchant when the payment is due.

What is the estimated funding time for a merchant cash advance via Square Capital?

Square Capital can provide a credit approval decision in less than an hour and fund the merchant cash advance within 1 business day.

What are the business financing requirements for Square Capital?

To apply for Square Capital, you need to provide the following business documentation:

• Business license
• Business bank account

What do you need to qualify for Square Capital?

Applicants with a credit score of at least 350 and up to 850 may be eligible for Square Capital. The minimum age to be eligible is 18 or the state minimum, whichever is higher.

Square Capital does not have or does not disclose a minimum annual income eligibility requirement.

The Military Lending Act (32 C.F.R. § 232) prohibits lenders from charging service members more than 36% APR on credit extended to covered borrowers. APRs for the Square Capital product fall outside of the MLA limits, and as a result, the product cannot be issued to these applicants. Active duty service members and their covered dependents are considered “covered borrowers" under the Military Lending Act.

U.S. citizens are, of course, eligible for the services offered by Square Capital. Permanent resident / green card holders are also eligible to apply.

To qualify, applicants may need to provide the following documentation:

• Proof of income
• Recent bank statements
• Business formation documents
• Driver's license
• Proof of identity
• Proof of citizenship or residence permit
• U.S. tax identification number

What limitations does Square Capital set on the purpose of the merchant cash advance?

Square Capital considers merchant cash advance applications for business purposes, such as:

• Business debt refinance
• Equipment purchase
• Hiring
• Inventory
• Lease improvement
• New location
• Payroll
• Product or service expansion
• Technology investment
• Working capital