High-profile fintech company Block (SQ -2.00%) had some good news from north of our border to report on Thursday. As a result, its shares bumped almost 5% higher on the day.
Block revealed Thursday morning that its core fintech brand Square has launched its Square Loans services in Canada. This relatively new offering from the company is, as the name strongly implies, its small business lending operation.
It's always heartening when a company rolls out an offering to a fresh new market. In the case of Block and Canada, investors are probably also happy that this rollout is happening in a fertile environment.
Block cited proprietary research indicating that seven in 10 small business owners in the country have not opted to access what the company calls "traditional" funding for their enterprise. Forty-six percent of respondents surveyed in Block's research said that they sourced funding from personal credit cards. That's a potentially disastrous move given the meaty interest rates typically charged on borrowings from such instruments.
Block quoted Square's general manager of business banking Luke Voiles as saying: "It's no secret that small and medium-sized businesses face tremendous barriers when it comes to accessing funds to help them transition and grow. As the pandemic eases and Canadian business owners look to the future, they need help moving forward now more than ever before."
As with any other service offered by Block, Square Loans plugs directly into the company's ever-expanding suite of products available to its clients. Square Loans crunches transaction data from those businesses to analyze their creditworthiness, and presents a fast, paperwork-free application process. According to the fintech, it can provide the borrowed funds to approved parties as soon as the next business day.