Square Capital Processed 76K PPP Loans Totaling $820M

Square Capital LLC processed more than $820 million in Small Business Administration (SBA) Paycheck Protection Program (PPP) forgivable loans in six weeks, the firm reported.

The San Francisco-based division of Square Inc., the mobile payment company, said it provided a financial lifeline to more than 76,000 small businesses.

The average loan was less than $11,000, with 97 percent of its loans falling under $50,000, the SBA’s smallest tier, the company said.

Last year, Square Capital did $2.3 billion in business loan volume. From April 29 through June 10, the company did 4.5 months’ worth of that volume.

Square said it received 140,000 applications for more than $2 billion in PPP loans. Of that number, 60 percent of the borrowers had never before received a loan through Square Capital.

“While our lending business has served Main Street small businesses for years, we knew that as our sellers and their communities were facing deep economic uncertainty, we could play a meaningful role in disbursing stimulus funds,” said Jacqueline Reses, the head of Square Capital, in a statement. “In mere weeks, we were able to create an application that made it simple for business owners to complete the PPP application, knowing many Square sellers handle all elements of their business, including financial operations, themselves.”

The majority of borrowers, 80 percent, were individual entrepreneurs.

“Being a sole proprietor is always challenging, but coronavirus amplified that exponentially, as it meant you were one person alone trying to figure out how to adapt and survive,” said Carolyn Hart, a San Francisco massage practice owner, in a statement. “It was a true lifesaver,” she said. “I’m so relieved my 28-year business will survive the pandemic.”

Not all of Square’s PPP loans went to big city businesses.

The funds were distributed across all 50 states with a near even distribution across urban, suburban, and rural regions.

The company said 34 percent of loans went to rural businesses, with an average loan size of $9,400; 26 percent went to suburban businesses, with an average loan size of $10,700; and 39 percent went to urban businesses, with an average loan size of $11,900.

States with some of the highest costs of living saw many of the highest average loan sums. The average loan for Massachusetts businesses was $14,200; in California, $13,900; New York and Washington, D.C. both saw averages of $13,700; and New Jersey averaged $13,600.

The top industries by loan volume were beauty and personal care, with 18,700 borrowers and an average loan size of $5,600; professional services, with 14,800 borrowers and an average loan amount of $11,700; and healthcare and fitness, with 9,500 borrowers and an average loan of $11,100.

Among restaurants and bars, food and drink saw an average loan of $19,800, with loans totaling $170 million. Home and repair had an average loan of $14,500 and total loans at $72 million. For retail, the average loan was $11,700, and total loans were $86 million.