Square Capital, the lending arm of Square Inc., has taken advantage of a market of small- and medium-sized businesses that lack access to traditional financing, the subsidiary's head Jackie Reses told CNBC Tuesday.
In a sit-down interview with Jim Cramer on "Mad Money," Reses said the financial technology company has leveraged data to serve businesses that aren't well capitalized. Square reported making out about $472 million in 72,000 business loans in 2018, up 55 percent from the year prior.
"I think one of the unique differentiators of our product is that we can see the data that comes across payments," she said. Square also offers clients point of sale software. "So we can see the success of these businesses like restaurants who've historically been left out of the financial system because of the type of business that they are."
By using point-of-sale data of its small business clients, Square Capital can lend money more effectively, she said. That information can paint a bigger picture of the business' financial health and allow Square Capital to safely lend money and collect loan payments from the clients' cash receipts.
Square's point-of-sale system gives them more details about a firm that a bank or other traditional lenders can't see.
"If they just had access to credit, we could help them grow. We could help them get through weekends," Reses said. "We could help them get through variations in their cash flow and I think that's why we're so proud of the product that we have."
Square also owns the popular person-to-person money transfer platform Cash App, among other fintech services. The app is the top competitor to PayPal's Venmo.
The stock has seen volatile trading in recent months. Sellers cashed out on the security in early October at its $101.15 all-time high mark before it plummeted below $50 on Christmas Eve.
The equity has since recovered much of those losses topping $76 at Tuesday's close.