Square Financial Services to Service and Originate Cash App Borrow Loans

Block said Thursday (March 13) that its industrial bank, Square Financial Services (SFS), received approval from the Federal Deposit Insurance Corp. (FDIC) to offer the company’s consumer loan product Cash App Borrow.

SFS will begin servicing and originating Cash App Borrow loans nationwide in the coming weeks, replacing Block’s current external bank partner, Block said in a Thursday press release.

Cash App Borrow provides small, short-term consumer loans — typically less than $100 and about one month in duration — to Cash App customers in a simple and accessible way that includes making payments within Cash App, according to the release.

The short-term credit product saw nearly $9 billion in originations in 2024 offered by Block through its external bank partner. Most customers pay on time, and the product’s historic loss rates are under 3%, the release said.

SFS will continue to offer business loans through Square Loans and interest-bearing business savings accounts through Square Savings, per the release.

“Across Block we’re focused on building technology to increase access to the economy, and Square Financial Services is a critical tool in helping us deliver on that,” Amrita Ahuja, chief operating officer and chief financial officer of Block and executive chairwoman of the board of directors for SFS, said in the release. “The bank allows us to provide a clear path to cash flow using our proven underwriting mechanisms for businesses and now consumers who are not well served by the traditional banking and credit systems.”

Block executives said during a Feb. 20 earnings call that the company plans to continue doubling down on traditional banking territory in the year ahead, as it did for much of the past fiscal year.

For example, executives pointed to Cash App’s continuing evolution that has included the addition of an expanded suite of banking features including high-yield savings, paycheck allocation to investments and free tax filing. They noted that Cash App Borrow’s nearly $9 billion in originations demonstrates strong demand for micro-lending services.

In a shareholder letter, Block said: “Our goal is to make Cash App the top provider of banking services to households in the United States that earn up to $150,000 per year.”