Block Inc. Expands Financial Services with FDIC Approval for Cash App Borrow

On March 13, 2025, Block, Inc. (NYSE: XYZ) announced a significant advancement in its financial services portfolio through its subsidiary, Square Financial Services, Inc. (SFS). The company received approval from the Federal Deposit Insurance Corporation (FDIC) to launch Cash App Borrow, a consumer loan product aimed at enhancing financial accessibility for Cash App users. This initiative underscores Block's commitment to economic empowerment by providing small, easily repayable loans to consumers navigating a challenging financial landscape.

Cash App Borrow is designed to bridge the gap for consumers often overlooked by traditional banking systems. The product offers short-term loans averaging less than $100 with a typical duration of about one month. These loans are significantly more affordable than payday loans or overdraft fees, which have historically burdened consumers with high costs. In fact, the average payday loan carries an annual percentage rate (APR) of approximately 391%, while Cash App Borrow offers loans at less than one-sixth of that cost, making it a viable alternative for those in need of quick cash flow.

According to Block, the product has already demonstrated strong market viability, with nearly $9 billion in loan originations reported in 2024 through an external banking partner. The majority of the revenue generated from Cash App Borrow comes from customers who repay their loans on time, reflecting a low historic loss rate of under 3%. Eligibility for these loans is determined by various factors, including the borrower’s state of residence, Cash App usage, and repayment history.

Amrita Ahuja, Block’s Chief Operating Officer and Chief Financial Officer, as well as the Executive Chairwoman of SFS, emphasized the importance of this milestone. “Across Block, we’re focused on building technology to increase access to the economy, and Square Financial Services is a critical tool in helping us deliver on that,” Ahuja stated. She highlighted that the bank’s capabilities allow for innovative underwriting processes that cater to consumers inadequately served by conventional financial institutions.

In addition to Cash App Borrow, Square Financial Services also provides business loans and interest-bearing savings accounts tailored for businesses. The average loan amount offered through Square Loans is approximately $10,000, which is notably lower than the standard business loan amount reported by the Small Business Administration, estimated at around $436,000. This allows small business owners to access financing options that are transparently priced and adjusted to their sales performance.

Square Savings, another service from SFS, employs automation to help sellers manage their finances effectively, with total savings balances exceeding $300 million as of December 31, 2024. This product offers a structured approach to budgeting and saving, helping small business owners achieve their financial goals.

The transition to Cash App Borrow will not affect existing loan terms for current borrowers. Customers will continue to make payments through the Cash App platform, ensuring a seamless user experience. SFS plans to commence servicing and originating Cash App Borrow loans shortly, with a gradual ramp-up in volume anticipated over the coming quarters.

Block, Inc.’s recent FDIC approval to roll out Cash App Borrow marks a pivotal moment in the company’s mission to democratize financial services. With a focus on providing accessible and affordable lending solutions, Block is not only positioning itself as a leader in the fintech space but also as a champion for consumers seeking financial empowerment. As the company continues to innovate and expand its offerings, it stands poised to make a lasting impact on the financial landscape.