Q3 2025 Earnings Breakdown: Square, Shopify, and PayPal Keep Scaling SMB Lending

How the fintech giants’ business loan arms are performing

The latest earnings from Block (Square), Shopify, and PayPal show that small-business lending remains a key growth lever inside their ecosystems. Despite broader economic uncertainty, all three companies reported stable to rising loan originations and healthy credit performance across their respective merchant-financing programs.

Square Loans (Block)

Block’s Q3 2025 results highlighted another solid quarter for Square Loans, with approximately $1.7 billion in originations, slightly up from the prior quarter. The company also sold $1.1 billion of loans to third-party investors, generating roughly $62 million in gains on sale, a sign that capital-market demand for Square’s small-business paper remains strong.

Gross profit at Block rose 18% year-over-year to $2.66 billion, while Square GPV climbed 12% to $67.2 billion. Loan and receivable losses increased primarily due to higher origination volumes, not deteriorating credit. Block continues to leverage its deep transaction-level data to price and manage credit risk, while maintaining liquidity through whole-loan sales.

Key takeaway: Square Loans remains one of the most scaled embedded-finance lenders in the market, combining point-of-sale data, instant funding, and secondary-market execution to grow sustainably.

Shopify Capital

Shopify’s Q3 results show roughly $1.0 billion in Capital originations, keeping pace with prior quarters and putting the company on track to exceed $3 billion in annual originations for 2025. Year-to-date, Shopify Capital had advanced around $2.8 billion through September 30.

The company also expanded its lending reach this quarter, launching Shopify Capital in Ireland and Spain, continuing its global rollout after successful launches in other European markets earlier this year.

Shopify doesn’t break out loan performance in detail, but industry data suggests consistent loss trends and high renewal rates, supported by its real-time access to merchant sales data.

Key takeaway: Shopify Capital has achieved steady scale and strong renewal performance, driven by seamless underwriting within its merchant ecosystem and continued international expansion.

PayPal Working Capital & PayPal Business Loans

PayPal’s Q3 report showed that its business-lending operations are gaining momentum after a slower 2024. The company originated approximately $600 million in merchant loans and advances during the quarter, with $1.6 billion in receivables purchased year-to-date.

At the end of Q3, PayPal held around $1.7 billion in outstanding merchant loans and advances (net) — up nearly 28% year-over-year. PayPal’s model continues to rely on purchasing receivables from a partner bank and servicing them internally, enabling flexibility while keeping balance-sheet exposure limited.

Key takeaway: While smaller in scale than Square or Shopify, PayPal’s lending arm is showing renewed strength, benefiting from its vast merchant network and improved underwriting visibility.

Side-by-Side Comparison

Company	Product	Q3 Originations	Portfolio / Structure	Highlights
Block	Square Loans	~$1.7B	$1.1B sold to investors; $62M gain	Higher originations and stable performance despite volume growth
Shopify	Shopify Capital	~$1.0B	Funded internally; global expansion	Consistent volume; now live in Ireland & Spain
PayPal	PPWC / PPBL	~$0.6B	Receivables purchased from partner bank	28% YoY growth in portfolio balance

Industry Takeaways for Funders and Brokers

• Embedded lending continues to dominate. Square and Shopify prove that lending integrated into merchant ecosystems maintains the highest conversion and repeat-funding rates.

• Secondary markets are unlocking scale. Square’s successful loan sales to investors illustrate the power of capital-markets partnerships that independent funders can replicate through participations or forward-flow deals.

• Credit risk remains manageable. None of the three reported spikes in delinquency or charge-offs; growth in loss provisions stems mostly from higher originations.

• Competition is tightening. Embedded lenders with instant data access are compressing decision times. Independent funders must compete with better speed, renewal programs, and niche expertise.

Bottom Line

Small-business lending remains a profitable and growing component for each platform:

• Square Loans continues to lead with scale and capital-market efficiency.

• Shopify Capital maintains strong global momentum with high-quality renewals.

• PayPal Working Capital is quietly expanding its footprint again.

For brokers, ISOs, and alternative funders, this is another reminder that the embedded-finance players aren’t slowing down — but they’re also validating demand. The more these ecosystems lend, the more they signal that the SMB funding market is healthy, dynamic, and still full of opportunity for creative, data-driven funders.