Head of Square Capital
When the Federal Deposit Insurance Corp. approved Square's application to become an industrial loan company in March, the fintech became one of only two firms to receive an ILC charter in the past decade.
And Jackie Reses, who heads Square Capital, was the driving force behind Square's ILC bid.
Square was formed in 2009 to simplify credit card payments for point-of-sale purchases from small vendors, and it created Square Capital in 2014 as a way to expand into lending to these customers.
The unit, led by Reses, offers small businesses a loan that can be repaid through a portion of sales, utilizing Square's point-of-sale technology to facilitate repayment. And in the five years since Reses joined, it has made more than $6 billion in loans, with an average loan size of just $7,000.
Square plans to launch its ILC, Square Financial Services, in 2021, with Reses serving as the executive chairman of the board of directors.
This expertise in small-business lending has become especially valuable since the pandemic took hold earlier this year, as Square tallied 76,000 successful Paycheck Protection Program applications that delivered more than $820 million to small businesses in its network. Because Square works with many microbusinesses that are not served by traditional banks, its loans also are far smaller than typical small-business loans.
"One of the top takeaways from this crisis is also something we've known for a long time: Small businesses are routinely overlooked and underserved by the traditional finance system," Reses said. "These comparably small loans made a massive amount of difference to businesses, and I'm grateful that I've been able to personally hear the stories of resilience and perseverance of sellers who were able to receive PPP through us."
