Square already has its fingers in a number of different businesses. Jack Dorsey’s company offers mobile restaurant payments, free money transfers and of course the sleek white smartphone credit card scanner that started it all. Now, Square is moving into new territory with Square Capital, which offers quick cash to small companies that need a boost.
Square Capital will compete directly with banks, offering the same business loans while cutting out the extra paperwork and application process. Square promises to transfer $10,000 to small startups in just one business day, but expects $11,000 in return. Investments are repaid automatically by taking a cut from the company’s daily credit and debit card sales. Square Capital expects to earn back most loans within 10 months by taking a 10 percent cut from each sale.
Besides the potential to give new startups a boost while elbowing its way into a new market, Square Capital also means more small business will be using Square Readers. There’s also a special app for tracking your payments as you go, and Square says it has millions of dollars reserved for this new venture.
If you’re looking to launch a small business, Square Capital may be an option worth considering, though for the average consumers today’s news won’t make much of a difference to every day life.