Square Financial Services initiates banking operations

By Pavithra R

Square, building simple tools to help people participate and thrive in the economy, has announced that its industrial bank, Square Financial Services, has begun operations after completing the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions.

Square Financial Services is an independently governed subsidiary of Square and is built with the primary purpose to offer business loan and deposit products, beginning with underwriting and originating business loans for Square Capital’s existing lending product. 

“Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved. We thank the FDIC and Utah DFI for their partnership enabling us to reach this milestone, and look forward to continuing to expand access to financial services at this critical time for small businesses,” said Amrita Ahuja, Square, Inc. Chief Financial Officer and Executive Chairwoman of the board of directors for Square Financial Services.

The industrial bank is led by an executive team who bring deep experience across banking, lending, and finance. Joining the previously announced CEO Lewis Goodwin and CFO Brandon Soto are:

• Samantha Ku, Chief Operating Officer
• Sharad Bhasker, Chief Risk Officer
• David Grodsky, Chief Compliance Officer
• Homam Maalouf, Chief Credit Officer
• Jessica Jiang, Capital Markets and Investor Relations Lead

The opening of Square Financial Services deepens the FinTech’s ability to expand access to loans and banking tools to underserved populations. 58% of loans through Square Capital go to women-owned businesses, and 35% of loans through Square Capital go to minority-owned businesses.

Square Financial Services will continue to sell loans to third-party investors and limit balance sheet exposure. Moving forward, the industrial bank will be the primary provider of financing for Square sellers across the U.S.

Recently, Brex filed application for Industrial Bank Charter with FDIC and UDFI