You can be on Entrepreneur’s cover!

Square Ramps Up Its Offering with a Merchant Cash Advance Program Jack Dorsey's latest company Square, a business best known for mobile credit-card processing, today announced a program to help entrepreneurs get access to capital as soon as the very next day.

By Catherine Clifford

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Square, a San-Francisco-based company best known for its mobile-payment processing service, announced today that it is expanding its offerings to include a merchant cash advance program that can get cash in the hands of small-business owners in as little as 24 hours.

Dubbed Square Capital, the program has already advanced tens of millions of dollars to thousands of businesses who process payments with Square. Businesses do not apply for the capital. Rather, Square looks at the financial data of the businesses that use the Square payment processing dashboard and make proactive offers to those businesses that it considers eligible. Thus far, average cash advances have been less than $10,000.

Businesses that have used the Square Capital cash advance program already have used the money for the likes of adding another location, buying equipment or increasing inventory stocks.

Related: 25 Payment Tools for Small Businesses, Freelancers and Startups

Generally, the cash advances are paid back in about 10 months, according to a statement from the company released today. That time frame is flexible, however. Square automatically deducts a portion of a merchant's sales each day until the capital is repaid. The speed at which the cash advance is repaid depends on how a client's business is doing. When a merchant's business is growing, Square gets paid back faster. If sales are slow, Square takes a smaller cut.

The total fee for access to the money has typically been around 10 percent, but that figure fluctuates depending on how long a merchant's history with Square is and how big a business is, says Faryl Ury, spokesperson for Square. When a merchant accepts the capital advance, Square displays the repayment fee in a fixed dollar figure, not a percentage. That way, the merchant understands what the capital is costing. Also, notes Ury, the merchant cash advance offer is monitored and updated in real time, so if a business grows, so too can its cash advance from Square.

Square's announcement today that it is expanding its services comes just a month after rumors were rampant that Jack Dorsey's San Francisco-based company was putting itself up for sale. (Square denied these claims).

Related: Rumors Swirl That Square Is for Sale

It might appear a bit of a desperate reach for Square to be dipping its toe into the lending market, but as Square tells its own story, Square Capital is a logical extension of its core brand: making commerce available and accessible. Providing a mobile option for small merchants to be able to process credit cards was only Square's first step in overhauling commerce, says Ury. Improving the experience of businesses getting access to capital is one more way that Square is working to improve the process of making commerce available to all merchants, Ury explains.

That expansion of the vision hasn't been without missteps, though. Square just last month wound down its Square Wallet application, whereby a consumer could pay at a store through payment information saved in a consumer's smartphone. That application wasn't ever as popular as it was expected to be and Square ended up pulling it. Rather, Square says it has migrated the features of Square Wallet into Square Order, an app that allows consumers to order, pick up, and pay at local shops, cafes and restaurants.

What's clear in all the expansions and relaunches, though, is that Square wants to be all things to all small-business owners.

Related: Square Now Lets You Issue Partial Refunds

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

This Fan-Favorite Masters 2024 Item Is Still $1.50 as Tournament Menu Appears Unscathed by Inflation

The pimento cheese sandwich is a tradition almost as big as the tournament itself.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business Solutions

Save an Extra 20% on the Ultimate Microsoft Bundle Featuring Windows 11 Pro, Office, and More

Pick up this package of popular Microsoft products for only a fraction of the price through April 16.

Business News

I Designed My Dream Home For Free With an AI Architect — Here's How It Works

The AI architect, Vitruvius, created three designs in minutes, complete with floor plans and pictures of the inside and outside of the house.

Business Solutions

Visualize Data for Better Business: MS Visio is $23.99 Through April 16

Set your team up for success with a reliable tool for creating organizational charts, diagrams, and more.

Business Solutions

Scan Easier and More Affordably with This 20% Discount

iScanner is a mobile app that makes document management, editing, and sharing easier.