Square Loans: Loss Rates Still Consistent With Historical Averages

Block’s business loan division, Square Loans, reported that loss rates in Q2 remained consistent with historical averages. This while origination volume continued to tick upward, coming in at $1.45B in Q2 over $1.32B in Q1. Block is likely the largest online business lender in the US. It originated $4.78B in 2023. The vast majority of Block’s business loans are sold off to to investors.

Because of Block’s overall company size, its business lending operation was mostly unmentioned during the earnings call. Its CEO Jack Dorsey emphasized that a key part of the company’s acquisition strategy going forward is “self-serve onboarding.”

“Product-led growth remains a core pillar of our go-to-market strategy because self-serve onboarding is still Square’s most important customer acquisition channel,” Dorsey said in the quarterly shareholder letter. “Self-serve onboarding is an important differentiator for Square and one of our super powers. Many of our competitors don’t even offer this as an option.”