Square Loans Has Consistently Beat its 4% Loss Target

Square Loans isn’t just the largest originator of online small business loans that deBanked tracks, they’ve also managed to beat their 4% loss target every year for the last 10+ years.

“Since launching Square Loans in 2014, we’ve been able to hold loss rates consistent with our target while meaningfully expanding eligibility to more and more customers,” the company said in its Q3 shareholder letter. “Every annual Square loan cohort has performed in line with or better than our 4% loss target, and we’ve been able to grow Square Loans at a 27% CAGR over the past decade because of our disciplined underwriting approach, proprietary data, and world-class expertise.”

During the earnings call, Block’s Head of Underwriting, Juan Hernandez, said that their success with Square Loans is a “core part of their DNA.”

Square Loans benefits from the POS ecosystem that Square provides its clients.