$472 million in loans to small businesses

Square (SQ), which has been extending loans to small businesses for a few years now, sees more room for growth on this front. Speaking on CNBC’s show, Mad Money, Square Capital head Jackie Reses hinted that making loans to restaurants could be lucrative for the company.

According to Reses, restaurants have historically been left out of the traditional financial system, suggesting that restaurants could be more open to alternative credit financing options like the one Square provides. Square extended $472 million in loans to 72,000 businesses in the fourth quarter.

Square Sees a Big Opportunity in Lending to Restaurants

Square’s unique advantage in the restaurant sector

Square is not alone in extending loans to small businesses, PayPal (PYPL) and Amazon (AMZN) have also loaned billions of dollars to small businesses in the past few years. However, Square could have a unique head start in the race to lend to restaurant businesses because of its long working relationship with restaurants. In addition to making mobile readers that even small restaurants can use to accept credit card payments, Square helps restaurants reach customers through its Caviar food ordering service. The third-party restaurant meal delivery market in the United States, worth $8.5 billion in 2017, is poised to hit $15.5 billion by 2020, according to Pentallect.

Square’s Caviar is currently battling for this revenue opportunity with GrubHub (GRUB), which bought Yelp’s (YELP) food delivery service Eat24 in 2017 to sharpen its competitive edge. Last year, GrubHub won a contract to deliver meal kits for Blue Apron (APRN).

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