Point of sale payments business Square announced this week the Australian launch of its small business lending program, Square Loans.
The company claims that its lending program offers Australian businesses access to funds using historical transaction data, without the red tape and paperwork required by traditional forms of funding.
According to Samina Hussain-Letch, Head of Industry & Payments at Square Australia, “There’s never been a more important time for more choice in the lending market, and so we’re delighted that we can offer our Australian sellers simple and quick access to funding through Square Loans.”
The application process includes a loan fee, repaid as a percentage of daily card sales, whereby on slow business days, the vendor will be expected to repay a smaller percentage of the loan. The company claims that its lending program provides small businesses with flexibility not accessible through traditional lending providers.
“Overly onerous and lengthy processes from big banks will act as a deterrent to small businesses and will force many to borrow from less secure means,” says Hussain-Letch.
“What we’re bringing to market solves that issue.”
According to Square’s research, one in four Australian businesses have received formal funding, though the probability of accessing such loans drops if you are a woman or under 40 years of age. Square expects its loan product to be well received by Australian businesses, as the company’s research indicates two thirds of business owners have resorted to private funding sources including credit cards and borrowing from friends and family, rather than being granted a business bank loan.
According to small business owner Jordan Walker, owner of Dexterity Salon in Ballarat, who was provided early access to the Square Loans program, “Our Square Loan helped us to buy inventory to keep money coming through the door, and has enabled us to now start to expand our business.”