US-based technology company Block’s subsidiary Square Financial Services (SFS) has received approval from the Federal Deposit Insurance Corporation (FDIC) to offer Cash App Borrow loans.
This approval marks a step in providing consumers with accessible short-term credit options.
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With loans averaging less than $100 and a duration of about one month, Cash App Borrow is claimed to serve as a cost-effective solution for short-term cash flow needs.
Eligibility for Cash App Borrow loans is determined by various factors, including state of residence, Cash App usage, and repayment history.
Block COO and CFO, and SFS directors board executive chairwoman Amrita Ahuja said: “Across Block we’re focused on building technology to increase access to the economy, and Square Financial Services is a critical tool in helping us deliver on that.
“The bank allows us to provide a clear path to cash flow using our proven underwriting mechanisms for businesses and now, consumers who are not well served by the traditional banking and credit systems.”
In addition to consumer loans, SFS provides business loans and interest-bearing savings accounts through Square Loans and Square Savings.
The average Square Loan is around $10,000, offering businesses tailored financing options. As of 31 December 2024, SFS has accumulated over $300m in savings balances.
SFS will maintain the existing terms of outstanding loans, including payment schedules, as it begins to service and originate Cash App Borrow loans.
In December 2024, Block announced that sellers using its commerce tools had processed 144 million transactions globally during Black Friday and Cyber Monday, a 17% increase from the previous year.
