Popular Questions about CSC
We are actively involved in checking out businesses that apply for loans. We approve loan requests from businesses with at least a year of proven revenue in their books or qualified backgrounds in launching similar businesses.
We review an application to check for financial integrity, community commitment and social capital (the ability for a business to recruit Squareholders). We check to see if a business has significant outstanding debt or other commitments that would compromise their ability to repay a loan. Our most important criteria when reviewing a loan application include a business’ ability to generate revenue to pay back their loan.
Borrowers pay back loans using a preset percentage of revenue instead of a flat monthly payment. As such, the payment timelines could change if revenues accelerate or decelerate. We send monthly reports to Squareholder so they know how much has been repaid, but we never disclose how much revenue the business produced.
At the end of the day, this revenue-based financing is healthy for small businesses with seasonal revenue or projected growth.
As loans are repaid, we make funds available to Squareholders (on a pro-rata basis, or in other words, if 10% of the total loan principal has been repaid, then 10% of each Squareholder’s portion of the loan is now available to them). Squareholders receive repayment notifications monthly, including a nice note about what’s new with the business they support. Squareholders can withdraw funds or lend them to a new business as they wish.
We aren’t interesting in taking a percentage of the funds a business raises. And since Squareholders don’t make money from interest rates, neither do we. We charge a small fee to a business (currently $250) before launching a campaign so we can spend time one-on-one to set them up for success. Following a successful campaign, and after we issue a loan, a monthly fee (currently $100) is charged until the loan is fully repaid. This flat monthly fee is not related to the size of the loan or the business.
If you have extra questions, use the "Ask us" tab on the right side of this page. We're still learning exactly what community funders want to know about these kind of loans, so your straight-forward input is very much appreciated.