Jack Dorsey’s payments company Square is looking to make a move into banking by applying to become an industrial loan company (ILC).

With the application, the Twitter CEO and his payments company are looking to form a wholly owned bank based in Utah. The bank, called Square Financial Services, would offer loans and deposit accounts to small businesses – similar to what Square Capital already does in partnership with Celtic Bank – and be capitalised with $56m in cash, as the Wall Street Journal reports.  

Should Square’s application be approved, it would mean it can offer loans without relying on a partner bank. The new bank will be chaired by Square Capital chairman Jacqueline Reses, while its acting CEO will be Lewis Goodwin – who joined Square after serving as CEO of Green Dot Bank.

According to Dorsey, Square has lent over $1.8bn to more 140,000 small businesses throughout the US, with an average loan size of $6,000.

In becoming an ILC, Square would be able to do many of the things traditional banks do but would not have to comply with the Bank Holding Act requirements, and would instead be regulated by state regulators and the Federal Deposit Insurance Corp.