Superstar businesses that use Square to process payment cards are being granted access to Square’s new small business offering - Square Capital.

Businesses that are using Square substantially may apply for a merchant cash advance from the company directly.

While it’s just in the pilot phase, and Square won’t exactly call it a “loan,” the program is very similar to PayPal’s Working Capital.

Both borrowing programs have different tiers of repayment options, with PayPal and Square taking a cut of all future sales. The percentage of this varies depending on the amount of the upfront down payment on the loan. The higher the upfront payment, the lower the percentage that Square and PayPal will take.

There is no interest charged on the loan.

So if you do the math, the only thing a business is really paying for is the agreed upon upfront payment. However, these programs forego charging interest while also taking away a merchant’s choice of when to repay the loan.

Square Capital doesn’t set a time frame for when the loan has to be paid back, but if a business owes money, it means their profit margins will be cut by a certain percent until the advance is paid back.

For some businesses, a loan like this would be beneficial. If they need the money immediately to restock for example, they trust Square and don’t necessarily want or can deal with a bank. Square Capital may be a good option.