Square extends lending arm to Australian small businesses
April 14 (Reuters) – Square Inc SQ.N will begin providing loans to small businesses in Australia, the payments company said on Wednesday, where it will compete with the country’s major banks for loans to small and medium-sized businesses in a tight market.
National Bank of Australia NAB.AX is currently the largest SME lender in the country, followed by the Commonwealth Bank of Australia CBA.AX. However, bank loans often require collateral.
“Many small business advocates have recognized that traditional lending processes in Australia are not flexible enough for small businesses,” said Samina Hussain-Letch, Head of Industry and Payments at Square Australia.
“The overpriced and time-consuming processes of the big banks will act as a deterrent for small businesses and force a lot of people to borrow from less secure means. What we put on the market solves this problem.”
Square Loans would use the transaction data to issue quick loans the next day, with an upfront commission refunded automatically based on a percentage of daily sales, the company said.
Square did not disclose its share of the payment terminal market in Australia, but said that as of December 2020, the number of active sellers using its platform in the country had grown by an average of 92% per year since ‘it started offering payments in 2016.
(Reporting by Arundhati Dutta in Bengaluru; Editing by Shailesh Kuber)
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