April 14 (Reuters) - Square Inc (NYSE:SQ) SQ.N will begin providing loans to small businesses in Australia, the payments firm said on Wednesday, where it will compete with the country's big banks in lending to small and medium enterprises in a tight market.
National Australia Bank NAB.AX is currently the country's biggest SME lender, followed by Commonwealth Bank of Australia CBA.AX . However, the banks' loans often require to be backed by security.
"Many small-business advocates have acknowledged that traditional lending processes in Australia aren't flexible enough for small businesses," said Samina Hussain-Letch, head of industry and payments, Square Australia.
"Overly onerous and lengthy processes from big banks will act as a deterrent to small businesses and will force many to borrow from less secure means. What we're bringing to market solves that issue."
Square Loans would use transaction data to allot quick loans as early as the next day, with one upfront fee repaid automatically based on a percentage of daily sales, the company said.
Square did not disclose its market share of payment terminals in Australia but said as of December 2020, the number of active sellers using its platform in the country had grown at an average of 92% annually since it began offering payments in 2016.