Square Capital (squareup.com/capital) is a merchant cash advance service offered by mobile POS provider Square. Launched in May 2014, Square Capital is intended to be a simpler alternative to third-party merchant cash advance programs, which can require business owners to undergo a rigorous screening process before receiving their funding. With Square Capital, merchants are preapproved based on their processing history, which enables them to sign up for financing in just a few steps within the Square dashboard. They then repay the total amount borrowed by giving Square a fixed percentage of their daily credit card sales.
Square Capital is repaid as a fixed percentage of credit card sales. There is no repayment schedule, and the amount owed does not change for the merchant. For instance, if a merchant receives $10,000 from Square Capital, that merchant might then owe Square $11,000, which will be repaid with 10% of the merchant’s daily credit card sales (actual figures will vary depending on a merchant’s business type and processing volume). The merchant will pay this 10% amount until the amount is fully repaid, regardless of how long it takes.