Working Capital
Editorial Team
At Working Capital, we believe access to funding should be simple, transparent, and designed around your business not the other way around. We’re committed to helping entrepreneurs make smart financial decisions with tools, guidance, and lending partners they can trust.
For small businesses, access to capital becomes most important when cash flow tightens, inventory costs rise, expansion opportunities appear, or unexpected expenses put pressure on day-to-day operations. But finding the right financing solution is not always straightforward. Some businesses need fast access to short-term working capital loans with minimal paperwork, while others want larger funding amounts, longer repayment timelines, or more flexible borrowing options that can support sustained growth.
Square and Funding Circle approach small business financing from very different directions. One focuses on fast, platform-based funding for existing payment-processing customers, while the other offers more traditional business lending products designed for established companies seeking structured financing. But the differences between the two lenders extend beyond loan structure and repayment terms, affecting who can qualify, how funding is delivered, and what types of businesses each platform is best equipped to serve.
Square’s business credit card is designed specifically for businesses already operating within the broader Square ecosystem. Unlike many traditional business credit cards for small businesses, eligibility is currently invite-only and based largely on a seller’s processing history and transaction volume.3
The card operates on the American Express network and can be used anywhere Amex is accepted. Square also keeps the fee structure relatively simple compared to many traditional business credit cards, with no annual fee, no late fees, and no foreign transaction fees. Cardholders earn unlimited 1% rewards on eligible purchases without category restrictions or earning caps. Rather than receiving rewards as a cash deposit, rewards come as credits towards Square payment processing fees.3
Rather than functioning as a standalone financial product, the card is tightly integrated into Square’s broader banking infrastructure. Business owners can manage spending, repayments, sales activity, and other banking tools from the same dashboard they already use. Payments toward the card balance can be made directly through the dashboard.3
Credit limits are largely tied to a business’s Square processing volume and transaction history rather than relying solely on personal credit metrics. Applying for the card does not impact a user’s credit score. However, if a business misses a required minimum payment, Square may automatically deduct a percentage of daily card sales processed through Square until the required payment amount is satisfied.3
Funding Circle’s cashback Visa business credit card is designed to sit alongside its lending rather than operate as a standalone banking alternative.
At its core, the card works like a standard business credit facility with a revolving credit limit that can reach up to £250,000.6 Owners can use it for everyday business spending across any merchant that accepts Visa, including domestic and international purchases, supplier invoices, travel costs, software subscriptions, marketing spend, and inventory purchases. It also includes support for employee or team cards, allowing businesses to distribute spending authority while retaining centralized control over limits and visibility.9
The most prominent feature is its cashback structure. Businesses earn 2% cashback on eligible spend for the first six months (up to £2,000 total cashback), after which the rate drops to 1% uncapped cashback on ongoing eligible purchases. Cashback is earned automatically on qualifying transactions and credited back to the account after the relevant billing cycle, once repayment of the statement balance has been received.9
The card does not charge monthly or annual fees, and there are no foreign exchange fees on international transactions, which makes it competitive for businesses that spend outside the UK. Interest applies only if a balance is carried beyond the interest-free window. Businesses can avoid interest entirely by paying their statement in full within the up to 42-day interest-free period.9
Eligibility is limited to UK-registered businesses that meet minimum trading and revenue requirements, and applications are subject to underwriting approval. Funding Circle may request financial information and can apply a personal guarantee depending on the business profile.6
Business financing through Square is only available by invitation to merchants currently using the Square payment platform. Square evaluates merchants using internal performance data, including payment processing history, transaction consistency, and sales volume. Eligible sellers receive prequalified loan offers directly through their seller dashboard.1
Square does not require a minimum credit score or check personal credit before offering financing. Square also does not require a personal guarantee, making the program accessible to businesses that may not qualify for conventional bank financing.1
Loan offers range from as little as $100 to as much as $350,000, with higher funding amounts typically reserved for larger merchants processing significant payment volume through Square.1 Smaller loans can work well for short-term working capital needs such as inventory purchases, payroll, equipment, expansion costs, or cash flow management.
Instead of charging traditional interest, Square applies a single fixed borrowing fee to each loan it issues. This fixed fee structure allows borrowers to know the total repayment amount from the outset. However, repaying the balance early does not reduce the overall borrowing cost.1
Repayment is designed to fluctuate alongside business revenue. Rather than requiring fixed monthly payments, Square automatically deducts an agreed-upon percentage of daily card sales processed through the platform until the loan balance is repaid. During slower sales periods, payment amounts decrease accordingly, while stronger sales periods accelerate repayment. This revenue-based structure resembles repayment structures available from many MCA loan companies and can help businesses manage seasonal fluctuations or uneven cash flow without the pressure of rigid repayment schedules.1
Although Square Loans do not follow a conventional term loan structure, borrowers are still required to make consistent progress toward repayment. The full balance must generally be repaid within 18 months, and businesses must repay at least 1/18 of the original loan amount every 60 days. This structure allows repayment flexibility while ensuring the balance steadily declines over time.
Funding Circle’s short-term financing options consist of short-term small business loans rather than revenue-based financing. Even with shorter terms, sometimes starting at six months, these loans have a fixed repayment schedule instead of being tied to incoming sales.
This means repayment amounts stay consistent over time, regardless of how a business performs. Funding Circle’s set payments on a defined schedule may make it more suitable for businesses that prioritize stability and can manage consistent obligations throughout the loan term.
Compared to MCAs or revenue-based advances, repayment is where the main difference lies, instead of adjusting with daily or weekly revenue.
Square’s financing model is built around one-time loan offers rather than open-ended access to credit. Businesses that receive funding through Square Loans are issued a set amount upfront and repay it over time through their sales activity on the platform.
The company does not provide a reusable credit account that merchants can borrow from repeatedly as balances are repaid. As a result, businesses looking for flexible, ongoing borrowing access would need to explore a separate business line of credit through another financial provider.
Funding Circle’s FlexiPay is a revolving credit facility that provides UK businesses with ongoing working capital, with credit limits that can extend up to £250,000.6 Approved businesses can tap into their available balance whenever expenses arise, using funds to cover ongoing or one-time costs such as supplier payments, inventory purchases, utilities, and other operational needs without applying for separate funding for each expense.
FlexiPay lets owners make individual draws as needs arise. Each withdrawal has its own repayment agreement, and the borrower selects a repayment period when they draw funds, typically one, three, six, nine, or twelve months.8 This allows repayment timing to be matched to the nature of the expense and the business’s expected cash flow.
Pricing includes a flat fee applied to each draw,8 and Funding Circle discloses all costs before funds are dispersed. Because there is no traditional interest rate, and no compounding charges or ongoing account fees, the total repayment obligation is straightforward and tied directly to each transaction. In some cases, repaying early can reduce the overall fee associated with that specific advance.
Once the facility is active, access to funds can be immediate. Requests submitted prior to the daily deadline can typically result in same-day funding.8 This speed makes it practical for urgent expenses where timing matters, such as securing inventory or covering short-term cash flow gaps.
Funding Circle makes FlexiPay available to businesses registered in the UK that also meet underwriting criteria. Approval may include a personal guarantee, depending on the business’s profile.4
Square Loans must be repaid within 18 months, making them a relatively short-term financing option that works well for temporary working capital needs.1 Rather than using a traditional interest-based repayment structure with fixed monthly installments, repayment amounts rise and fall alongside a business’s sales volume because payments are automatically deducted as a percentage of daily card transactions processed through Square.
Square does not currently offer extended multi-year repayment terms or larger long-term financing products for businesses seeking more substantial capital or lower monthly payment obligations over time.
Companies seeking traditional financing through Funding Circle may apply for a term loan for small businesses. The core of its platform, these loans are available to businesses registered in the UK with at least a year of trading history.6 They offer a lump sum advance paid back over in regular installments with terms ranging from six months to six years.5 Funding Circle caters to established limited companies that already have a trading history and predictable cash flow, rather than startups or early-stage ventures.6
The cost of borrowing is set using conventional interest rates starting at 6.9% for well-qualified applicants. This creates a familiar APR pricing structure that aligns with standard bank lending, allowing businesses to compare loan offers from different lenders. There are no prepayment or maintenance fees on Funding Circle loans.6
The lending process is positioned as a faster alternative to traditional high-street banks. Some owners may hear back an hour after submitting an application with an initial decision and may receive funding once all required checks and documents are completed (often within 48 hours).4 The exact timeline depends on the strength and complexity of the application. A personal guarantee is commonly part of the arrangement, particularly for small and medium-sized businesses.6
Loans are only available to qualifying UK businesses, and Funding Circle does not extend its term lending products to the U.S. market.6
Choosing between Square and Funding Circle ultimately comes down to how your business operates. Both working capital financing companies are designed to solve different financing needs, and each can provide an effective solution in the right context.
For businesses that prioritize speed, integrated access, and repayment tied closely to sales activity, Square offers a streamlined, platform-based approach to short-term funding. For companies that need structured repayment terms, larger borrowing capacity, or more traditional lending frameworks, Funding Circle provides a broader set of credit products built around established business profiles.
In many cases, the decision is less about selecting one provider over the other and more about aligning the financing structure with your cash flow patterns and operational priorities. Understanding those differences is what allows business owners to choose capital that supports their strategy, rather than constraining it.
1https://squareup.com/us/en/banking/loans
2https://squareup.com/us/en/banking/checking
3https://squareup.com/us/en/banking/credit-card
4https://www.fundingcircle.com/uk/
5ttps://www.fundingcircle.com/uk/small-business-loans/
6https://www.fundingcircle.com/uk/businesses/business-finance/
7https://www.fundingcircle.com/uk/resources/business-finance/preparing-credit-checks/
8https://www.fundingcircle.com/uk/payments/flexipay/
9https://www.fundingcircle.com/uk/payments/cashback/
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