Square Upgrades AI Underwriting Model to Expand Merchant Lending

Block's Square has approved more than $32 billion in financing for small businesses since launching merchant lending in 2014, with an average loan of about $10,000. Its advantage lies in using real-time payments data and machine learning to assess business performance, helping fill funding gaps for seasonal and project-based businesses and merchants with irregular revenue that banks often struggle to serve.

Square announced an upgraded underwriting model on March 27, 2026, after 12 months of testing. The model can assess loan eligibility as early as a new merchant's first transaction and adds short-term options ranging from 30 to 120 days. It allows loan offers to reach more than 50% more merchants, or about 250,000 additional businesses, including seasonal operators, project-based workers and merchants new to Square.