With the permission from FDIC, Square aims to open its new industrial loan company in Salt Lake City, Utah
Square, a California-based payments and merchant services provider, has secured conditional approval from the Federal Deposit Insurance Corporation (FDIC) to start Square Financial Services, an industrial loan company (ILC).
Square also stated that it has received charter approval from the Utah Department of Financial Institutions.
The new bank is expected to be launched next year, operating independently as a subsidiary of Square. The new bank will have its headquarters in Salt Lake City, Utah.
The new bank will mainly offer small business loans for Square Capital’s commercial lending business. It will also offer deposit products.
The new bank will be led by Lewis Goodwin
As per the payments company stated that its new subsidiary will sell loans to third-party investors and limit the exposure of balance sheet.
The bank’s executive team will be led by CEO Lewis Goodwin and chief financial officer Brandon Soto. Square Financial Services expects to benefit from Goodwin and Soto’s decades of banking experience and managing multiple ILCs.
Square Capital lead and Square Financial Services board of directors, executive chairwoman Jacqueline Reses said: “We appreciate the FDIC’s thoughtful approach to our application, and their recognition that Square Capital is uniquely positioned to build a bridge between the financial system and the underserved.
“We’re now focused on the work ahead to buildout Square Financial Services and open our bank to small business customers.”
Currently, Square has offices in the US, Canada, Japan, Australia, Ireland, and the UK.
Last November, the payments company completed the sale of its food delivery business Caviar to DoorDash for $410m in a mix of cash and DoorDash stock.
DoorDash has integrated with Square for restaurants point of sale to streamline the acceptance of online and in-person orders for merchants.