Since we began processing Payroll Protection Program (PPP) applications on April 29, 2020, as of June 10, Square Capital has facilitated more than $820 million in PPP loans, providing access to a financial lifeline to more than 76,000 small businesses. That’s an average loan of less than $11,000, with 97% of our loans falling under $50,000 – the SBA’s smallest tier for measurement.
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“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 and aimed to become one of the country’s top facilitators of microloans”
Compared to the Square Capital program’s 2019 business loan origination volume, which was $2.3 billion, we did 4.5 months worth of volume in just 6 weeks. The demand for stimulus funds from Square sellers was immense, and overall we received more than 140,000 applications for more than $2 billion in loans. 60% of our PPP borrowers had never before received a loan through Square Capital, enabling us to expand reach and serve new businesses.
“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 and aimed to become one of the country’s top facilitators of microloans,” said Jackie Reses, Square Capital Lead. “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 impact shows in our numbers: the average SBA loan for all of PPP is $113,0001, while PPP loans through Square Capital are 1/10th that size.”
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By employer type – Majority of borrowers were non-employer businesses
80% of American businesses are non-employer firms2. For Square Capital, non-employer firms received twice the number of loans as employer firms, but half the dollar volume when compared to employer firms (50,000 loans for a total of $290 million, compared to 26,000 loans for $530 million).
“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 seller Carolyn Hart, CMT, who owns her San Francisco massage practice. “Despite being unable to work, I wasn’t planning to apply for a PPP loan because I was too afraid of being rejected. Square Capital made a point to make their application transparent, streamlined, and accessible to businesses like mine, and it was a true lifesaver. I’m so relieved my 28-year business will survive the pandemic.”
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