Square Loans Continues Streak of Low Loss Rates

“Square Loans are underwritten on data banks can’t see and serve sellers banks won’t. Our loan cohorts have had loss rates of less than 4% through every cycle we’ve seen,” said Block CEO Jack Dorsey in his Q2 shareholder letter.

Square Loans has led online small business lenders in originations for a while, bolstered mostly by its massive captive POS ecosystem, but solidified with the performance of those loans. Some of those loans are held on balance sheet while others are sold to third party investors.