Square on Wednesday confirmed the launch of Capital, a new cash advance program for small businesses that Square has been testing with its merchant customers. In short, Square is offering its customers capital advances so they can grow their businesses, but unlike small business loans, repayments aren’t made at set amounts each month. Instead, Square takes 10 percent of every credit card transaction until the advance is paid off.
While Square didn’t spell out the specific financial details of the program, it said the typical advance would be around $10,000. A merchant would pay back Square $11,000 but at no set timetable. Every time the merchant took a credit card payment using Square, though, and additional 10 percent of the transaction price would go to paying off that debt.
The size of the advance is calculated based on a business’s sales history – which Square has ready access…
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