Square Inc. said Tuesday (Aug. 19) that it has secured an unspecified investment from Victory Park Capital and that it plans to use the money to expand its Square Capital small-business financing program.
Through the initiative, Square helps businesses grow by giving them access to funds quickly and simply. The investment will enable Square to extend hundreds of millions of dollars to tens of thousands of additional sellers who need capital to grow, the company said in the funding announcement.
"We are pleased to be partnering with Square and believe they are uniquely positioned to serve their merchant base with another best in class product,” Brendan Carroll, Victory Park Capital partner and co-founder, said in a statement. “We’ve been tremendously impressed with Square Capital’s data-driven approach to merchant finance, and we are confident they will achieve substantial growth in a dramatically underserved market."
Square said it has extended nearly $50 million in Square Capital to more than 10,000 independent businesses and it said the opportunity for continued growth within the small-business financing space is significant. More than a third of merchants who have completed their first Square Capital advance have renewed for a second round of capital to make additional investments in their business, the statement said.
Square Capital merchants thus far have processed more than $1 billion with Square and have used funds from the program to buy equipment and inventory, hire more employees, and to add new stores, Square said. Follicle Hair Salon, for example, used Square Capital to move into a larger space and add 12 new salon chairs, with each chair bringing in between $5,000 to $8,000 a month.
Last week week, Square published a blog post noting the top 10 myths about the company.