(Bloomberg) —Square Inc. offers loans to customers to pay for goods and services from merchants who use its payment platform, another company initiative to deepen financial services.

Merchants in 22 states will be able to offer installment payments on purchases of $ 250 to $ 10,000. The lending branch of the company, Square capital, will cover the cost on behalf of the buyer, the San Francisco-based company said in a statement Thursday. The initiative, tested for a year, allows buyers to apply online. If approved, they reimburse Square in fixed monthly amounts over three, six, or 12 months for purchases of $ 250 to $ 10,000.

“We believe this gives small businesses a level playing field,” said Jackie Reses, director of Square Capital. “Think of someone who needs to do a home improvement project, or even hair extensions that they would like to try. This product contains many examples of how an expensive item can be analyzed. In the past year, Square recorded 36 million transactions over $ 250 on its platform, Reses said.

This initiative is part of Square’s efforts to expand beyond its core business of payment processing. Square Capital has played a growing role in increasing the company’s sales and profits since its inception in 2014. During the last quarter, it facilitated more than 60,000 business loans totaling $ 390 million. Investors have backed Square’s efforts, with the company’s shares more than tripling to $ 96.96 in the past year.

The product puts Square in a space crowded with fintech companies like Max Levchin’s Affirm Inc. and PayPal Holdings Inc. who also offer installment loans. It is also the latest step the company has taken to increase its relevance in the lives of consumers, not just merchants. Square recently rolled out a loyalty program connected to its Venmo-like peer-to-peer money transfer app, called Square Cash. It also offers a debit card connected to the Cash application.

Square has kept default rates for business loans low by using all the data it has on merchants through its payments platform. With installment loans, Square will be exposed to consumer defaults.

“We feel very comfortable with the type of risk we take,” said Reses, given the credit information and external data sources that Square will use in making its underwriting decisions. Square plans to keep consumer credits on its balance sheet, but since it lends more, it could sell them to outside funds, as it does with its merchant loans.

Borrowers who are approved are billed at an annual percentage rate of zero to 24%. This contrasts with Affirm, which offers payments at an annual percentage rate of 10-30%.

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