Square Embraces Lending for Growth with Small Businesses and Consumers
Americans might still be spending heavily, but payment processor Square faces more competition than ever. Point-of-sale rivals like Toast and Lightspeed are gaining ground at checkout counters across the country. To find new growth, Square has turned to lending, writing $4.78B in small and midsize business (SMB) loans in 2023, even as competitors pulled back on lending.
- Square’s $1.32B in loans grew 17% year-over-year, surpassing the value of SMB loans written by America’s largest bank, JPMorgan Chase.
- In the first quarter alone, Square originated 129K small business loans, structured as advances to be repaid using daily sales.
On the other side: Square isn’t stopping with small businesses. Its $21B acquisition of buy now, pay later company AfterPay has given Square businesses another way to close sales — and has helped it push into consumer lending. Together, these efforts boosted Square’s subscription and services-based revenue by over 23% in the latest quarter, generating a surprising $5.77B profit. Despite this success, is down 9.5% year-to-date.
