Read Our SquareTwo Financial Review and Use Our Tested Research So You Don’t Lose Out

We reviewed the SquareTwo Financial online lender. But there are three rather similarly-named players online. We look at the specifics for all three. We did this in order to cut through the confusion. Here now is our SquareTwo Financial review.

SquareTwo Financial Review: The Details on SquareTwo Financial

SquareTwo Financial engages in asset recovery. Their subsidiaries purchase charged off assets from banks and other financial institutions. And then they place them for collection with SquareTwo’s branch offices.

According to Bloomberg:

“It also purchases Canadian consumer credit charged-off receivables. The company was formerly known as Collect America, Ltd. and changed its name to SquareTwo Financial Corporation in December 2009. SquareTwo Financial Corporation was founded in 1994 and is headquartered in Denver, Colorado.”

SquareTwo Financial Review: Background

Allegedly, SquareTwo Financial is located online here: www.squaretwofinancial.com. Their physical address is in Englewood, CO. You can call them at: (877) 304-0146.

Their website is currently not responding; so much of their basic information cannot be determined based on a simple check online.

Asset recovery

SquareTwo purchases outstanding accounts receivables from companies. But a bankruptcy will throw a monkey wrench into any company’s plans to work with them.

SquareTwo Financial Review: SquareTwo Financial Bankruptcy

The company is currently (since March of 2017) restructuring under Chapter 11. Reuters says:

“SquareTwo reached an agreement with Resurgent Holdings LLC to take ownership of the debt collector’s portfolio of assets, with Resurgent agreeing to invest $405 million, according to the filing. 

SquareTwo Chief Operating Officer J.B. Richardson said the proceeds from the agreement would result in a final purchase price of $264 million in exchange for 100 percent of the equity of the reorganized company.”

Fees

The SquareTwo Financial website did not list fees when it could last be checked.

SquareTwo Financial Review: Advantages

Advantages are hard to find; the company is basically a collections agency.

SquareTwo Financial Review: Disadvantages

Disadvantages include no transparency on fees. Also, they seem to be completely out of business, as even their website no longer responds. The company is allegedly in Chapter 11 restructuring.

But it is impossible to tell whether it will bounce back or if it is gone for good, or even if any other company will come in and buy the name or the company’s assets, or both. The SquareTwo Financial bankruptcy is currently ongoing. But there has been no news since the middle of 2017.

Another disadvantage is the similarity in names. It is easy to end up on the wrong site.

Square

This company provides options to take payments on the go. They are a business capital provider, but it must be through a loan offer.

Background

Square is located online here: https://squareup.com/. Their physical address is in San Francisco, CA.

Square Loan Offers

According to Square:

“Log in to your Dashboard to see if you have a loan offer through Square Capital. Application only takes a few clicks and there are no long forms to fill out or long waiting periods. All loans are subject to credit approval.”

Loan eligibility depends on a business’s history with Square. Square states:

“Eligibility for a loan through Square Capital is determined by factors like processing volume through Square, account history, and payment frequency. Eligible Square sellers receive an email and a notification in their Square Dashboard.” 

Loans are through Square Capital. But see below.

Square Advantages

Using performance as a part of the approval process for financing is a brilliant idea. For newer business owners, and for young adults, Square offers a chance to develop a reputation.

And if the business owner’s reputation at Square is a good one, then they will have a chance for approval.

In addition, getting an offer is effortless. All you have to do is be a good user of Square and you should become eligible (see above) and will get a notification in your dashboard. And that is a lot easier than trying to find a loan elsewhere.

Square Disadvantages

For businesses with a smaller amount of processing volume, there won’t even be an opportunity to try to qualify. And that is true no matter how good a customer you are of Square.

An easy offer on a dashboard could potentially be a bit of a disadvantage in that we are all lovers of inertia. So if it is easier to just go with Square, a business owner might not shop around for financing. And if that is the case, they could be getting less favorable terms.

Or they might get less.

But either way, you are leaving money on the table.

Names, Again!

The final disadvantage is the issue of names. The name ‘square’ is a good one, and it rather nicely mimics the look of some on-the-go payment methods you can use with a smartphone. Also, the term connotes fairness.

But it is such a good term that three similar companies all use it. For Square to stand out and for them to not lose business due to confusion, they might have to change their name.

Square Capital

Square Capital acts as a go-between for banks and customers, including businesses.

Background

Square Capital is located online here: www.squarecapital.co.in. Their physical address is in Gurgaon, India. You can call them at: (800) 108-7000.

Fees

There don’t seem to be fees; this company is paid via its referrals to its partners.

And of course the biggest issue is that they have the exact same name as Square’s lending division.

A Non-Confusing Alternative: Building Business Credit

Business credit is credit in a business’s name. It doesn’t link to an entrepreneur’s individual credit, not even when the owner is a sole proprietor and the solitary employee. Because of this, a business owner’s business and personal credit scores can be very different.

The Process

Establishing business credit is a process, and it does not occur without effort. A business needs to actively work to build business credit. Nevertheless, it can be done readily and quickly, and it is much faster than establishing individual credit scores.

Vendors are a big component of this process.

Carrying out the steps out of sequence will result in repetitive denials. No one can start at the top with business credit. For example, you can’t start with store or cash credit from your bank. If you do you’ll get a denial 100% of the time.

Company Legitimacy

A business needs to be reliable to lenders and merchants. That is why, a business will need a professional-looking website and email address, with site hosting bought from a merchant such as GoDaddy.

Also company telephone and fax numbers must have a listing on ListYourself.net.

At the same time the business phone number should be toll-free (800 exchange or comparable).

A company will also need a bank account dedicated only to it, and it must have every one of the licenses necessary for operation. These licenses all must be in the particular, correct name of the business, with the same business address and telephone numbers.

So keep in mind that this means not just state licenses, but potentially also city licenses.

Working with the IRS

Visit the Internal Revenue Service web site and obtain an EIN for the company. They’re free. Pick a business entity such as corporation, LLC, etc.

A business can get started as a sole proprietor. But they will more than likely wish to change to a kind of corporation or partnership to limit risk and maximize tax benefits.

A business entity will matter when it comes to tax obligations and liability in the event of litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and taxes. No one else is responsible.

Sole Proprietors Take Note

If you operate a business as a sole proprietor, then at the very least be sure to file for a DBA (‘doing business as’) status.

If you do not, then your personal name is the same as the company name. Consequently, you can end up being personally responsible for all business debts.

Plus, according to the Internal Revenue Service, using this arrangement there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 chance for corporations! Avoid confusion and noticeably lower the chances of an Internal Revenue Service audit as well.

Starting the Business Credit Reporting Process

Begin at the D&B web site and obtain a cost-free DUNS number. A DUNS number is how D&B gets a business into their system, to generate a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s web sites for the business. You can do this at https://oldcs.creditsuite.com/reports/. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.

By doing so, Experian and Equifax will have something to report on.

Vendor Credit Tier

First you must build trade lines that report. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can start obtaining retail store and cash credit.

These varieties of accounts have the tendency to be for the things bought all the time, like coffee, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are credit issuers who will give you initial credit when you have none now. Terms are typically Net 30, rather than revolving.

Hence if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.

Details

Net 30 accounts need to be paid in full within 30 days. 60 accounts must be paid completely within 60 days. In comparison with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you used.

To launch your business credit profile properly, you should get approval for vendor accounts that report to the business credit reporting bureaus. When that’s done, you can then use the credit.

Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit Tier – It Helps

Not every vendor can help like true starter credit can. These are merchants that will grant an approval with marginal effort. You also need them to be reporting to one or more of the big three CRAs. They are Dun & Bradstreet, Equifax, and Experian.

But you may have to apply more than once to these vendors. And you may need to buy some things you don’t need to have, to verify you are dependable and will pay timely. Consider giving unwanted things to charity.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one CRA, then progress to the retail credit tier. These are companies such as Office Depot and Staples. These companies are more likely to have items you need.

Use the business EIN on these credit applications.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These are businesses such as BP and Conoco. Use this credit to buy, fix, and take care of vehicles. Make certain to apply using the business’s EIN.

Cash Credit Tier

Have you been responsibly managing the credit you’ve up to this point? Then move onto the cash credit tier. These are businesses like Visa and MasterCard. Keep your SSN off these applications; use your EIN instead.

These are companies such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are normally MasterCard credit cards. If you have 14 trade accounts reporting, then these are in reach.

Monitor Your Business Credit

Know what is happening with your credit. Make sure it is being reported and address any mistakes as soon as possible. Get in the practice of checking credit reports and digging into the specifics, and not just the scores.

We can help you monitor business credit at Experian and D&B for only $24/month. See: https://oldcs.creditsuite.com/business-credit-monitoring. Update the relevant information if there are inaccuracies or the relevant information is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to contest any mistakes in your records. Errors in your credit report(s) can be taken care of. But the CRAs often want you to dispute in a particular way.

Disputing credit report mistakes generally means you mail a paper letter with copies of any evidence of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and keep the original copies.

Fixing credit report mistakes also means you precisely itemize any charges you contest. Make your dispute letter as understandable as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you sent in your dispute.

A Word about Building Business Credit

Always use credit sensibly! Don’t borrow more than what you can pay off. Keep track of balances and deadlines for payments. Paying off promptly and in full will do more to raise business credit scores than nearly anything else.

Establishing business credit pays. Excellent business credit scores help a business get loans. Your loan provider knows the business can pay its financial obligations. They know the business is bona fide.

The business’s EIN connects to high scores, and lending institutions won’t feel the need to require a personal guarantee.

Business credit is an asset which can help your business for many years to come.

SquareTwo Financial Review: Takeaways

The real question is whether SquareTwo or some unknown possible successor company will survive Chapter 11 at all. At the time of researching and writing this post, that seemed to be highly unlikely.

Therefore, we don’t just recommend you not work with SquareTwo. It is virtually impossible to do so, even if you wanted to.

Try Square Instead

But Square is another story. Seriously consider them for your funding. You will do best with Square if you use their payments system in your business religiously.

And finally, as with every other lending program, whether online or offline, always be sure to read the fine print. And do the math.

Go over the details with great care, and decide whether any option will be good for you and your company.

In addition, consider alternative financing options that go beyond lending. These include building business credit. This is in order to best decide how to get the money you need to help your business grow.

Today, we want to hear from our audience! Share your voice with us about your experiences with online lenders. And please be sure to pass along our SquareTwo Financial review.