Square Expands Lending Access for Seasonal and Project-Based Sellers

Square is now extending credit to more sellers after improving its underwriting models to assess the creditworthiness of those with non-standard revenue patterns.

The new underwriting models enable the company to offer Square Loans to project-based earners, seasonal operators and businesses that are new to Square, the company said in a Friday (March 27) press release.

As a result, Square is extending credit offers to over 50% more sellers, according to the release.

“To serve these sellers, we’re not changing or loosening our standards; instead, we’ve improved the innovative underwriting models that underpin Square Loans to more accurately evaluate the different realities that so many businesses experience — all while maintaining the same responsible practices that have made Square’s credit offerings not only industry leading, but beloved by sellers across the globe,” Square said in the release.

The improved underwriting models are built on those Square has offered for over a decade, according to the release.

The company’s unique position in the flow of funds enables it to gather real-time data that can be combined with advanced machine learning to provide a deep understanding of a business’ health, the release said. This understanding enables Square to extend credit to businesses that may be overlooked by traditional financial institutions, per the release.

Since 2014, the firm has originated over $32 billion in loans for small businesses, with the average loan size being about $10,000, according to the release.

Square’s newly enhanced underwriting models offer funding options that include smaller credit offers that can be repaid over shorter periods of time than traditional Square Loans. These offers can help businesses cover needs such as cash flow gaps, supply needs and utilities costs, per the release.

In the time since Square began rolling out these new offers to more sellers, the firm has seen that “the early results demonstrate we’re filling a significant market gap, further broadening access to credit, and setting more small businesses up for success.”

Jack Dorsey, CEO of Square parent company Block, noted the appeal of Square Loan to sellers during a November 2024 earnings call.

“It’s just having an easy option for sellers to potentially increase sales by getting an appropriately sized loan right to their email inbox and an invite to opt into it and then paying back through just making sales to their customers,” Dorsey said, adding that the offering “really took off. And it kind of guides how we think about all of our lending products.”

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