Square, a US-based mobile payment company, announced that its subsidiary Square Financial Services, has begun operations.
The launch follows Square Financial Services’ completion of the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions.
Headquartered in Salt Lake City, Utah, its primary purpose will be to offer business loan and deposit products, beginning with underwriting and originating business loans for Square Capital’s existing lending product.
Moving forward, Square Financial Services will be the primary provider of financing for Square sellers across the U.S.
Square Financial Services said that it will continue to expand access to loans and banking tools to underserved populations. 58% of loans through Square Capital will be allocated to women-owned businesses, compared to 17% of traditional loans, and 35% of loans through Square Capital go to minority-owned businesses, compared to 27% of traditional loans.
Square Financial Services added that it will continue to sell loans to third-party investors and limit balance sheet exposure as it does not expect the bank to have a material impact on Square’s consolidated balance sheet, total net revenue, gross profit, or adjusted EBITDA in 2021.
In addition to the appointment of Lewis Goodwin as CEO and Brandon Soto as CFO, Square announced the following new appointments:
- Sharad Bhasker, Chief Risk Officer
- Samantha Ku, Chief Operating Officer
- Homam Maalouf, Chief Credit Officer
- David Grodsky, Chief Compliance Officer
- Jessica Jiang, Capital Markets and Investor Relations Lead
“Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved.
We thank the FDIC and Utah DFI for their partnership enabling us to reach this milestone, and look forward to continuing to expand access to financial services at this critical time for small businesses.”
said Amrita Ahuja, Square, Inc. Chief Financial Officer and Executive Chairwoman of the board of directors for Square Financial Services.
Featured image credit: Photo by Christiann Koepke on Unsplash
