Luke Voiles, the general manager of Square Banking at Block, says offering loans can be a way of seeing merchants through a difficult time.
The programs are structured as cash advances, with the platform providing a certain amount of cash in exchange for an upfront fee. The money is paid back by deducting a small amount of the merchant’s daily sales. In all cases, however, the credit offers are based on the merchant’s sales records and, unlike a traditional bank loan, do not involve a credit check.
David Lewis, an insolvency trustee with BDO Canada, said opting not to perform credit checks means the e-commerce platforms have no idea whether merchants have other loans they may be struggling to pay off. It could also provide an avenue for struggling businesses to get deeper into debt. Square says it has provided US$9-billion in loans in the U.S., Australia and Canada. The company did not say how much had been paid back. Corporate filings for the 2021 fiscal year show that, on average, merchants took nine months to pay back the loans.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: nationalpost - 🏆 10. / 80 Read more »
Source: VancouverSun - 🏆 49. / 61 Read more »