Block Says It’s Extended Over $100 Billion in Credit to Consumers and SMBs

Block said Tuesday (May 20) that since the launch of its credit products, it has extended over $100 billion in credit while keeping its loss rates “low.”

The company uses a combination of near real-time data, technology and customer-first design, rather than traditional credit scores, Block said in a press release.

“More importantly, we’re proving that expanding access doesn’t mean increasing risk,” the release said. “Our loss rates are consistently low, and we’ve shown we can approve more customers than traditional credit bureaus at these rates. This shows that when you evaluate credit asks from people based on their real financial lives — not just their credit scores — you can responsibly serve millions who were previously excluded.”

Block has provided over $22 billion in small business financing through Square Loans, provided nearly $15 billion in short-term credit to more than 9 million active members through Cash App Borrow, and served over 20 million active consumers through Afterpay, according to the release.

These Block businesses have been able to extend credit by looking at regular paycheck deposits, consistent bill payments, cash flow patterns, spending habits, business performance and other “real-time financial behavior,” the release said.

With this data, Block businesses can serve customers who are reliable borrowers but would be considered “high risk” by traditional standards, per the release. These customers include small business owners with strong sales but no credit history, young professionals who don’t use credit cards, and workers with steady income but credit issues from years earlier.

“The future of credit shouldn’t depend on feeding more data into an outdated system,” the release said. “It requires building a better one — one that reflects how people actually earn, spend and manage money today.”

Block said in a May 1 earnings report that Cash App Borrow is emerging as a keystone of its monetization strategy and that the company is accelerating the rollout of this small-dollar, short-duration loan product after receiving Federal Deposit Insurance Corp. approval to issue consumer loans nationwide via Square Financial Services.

The company is also one of the platforms to which merchants are turning to meet their working capital needs, PYMNTS reported May 12. The company’s 10-Q filing with the Securities and Exchange Commission indicated that with Square Loans, its commercial loans on the company’s balance sheet were $476 million, compared to $404 million at the end of last year.