A Loan against Point of Sale (POS) machine is a financial product offered by various lending institutions in India. It is a quick and convenient way for small and medium-sized businesses to access short-term funding. POS loans are similar to merchant cash advances, and provide businesses with immediate cash flow.
Here, the POS system is a key element, as lenders recover the outstanding credit via the payments made through the point-of-sale machine. This type of loan is typically used to purchase inventory, pay bills, or cover unexpected expenses.
To know more about the loan against POS machines and for answers to the question, “What is POS in banking?” read on.
Before understanding how to avail credit card merchant loans, learn about the key parts of a POS system. They are as follows.
Electronic point of sale or EPOS interface
Drawers for cash and cards
Receipt printer
Barcode scanner
Keyboard/touchscreen
Display device that displays the invoice
Card reader or machine
The fundamental principles are constant, even if the eligibility requirements for various lenders may vary. These generally are to do with the quantity of POS transactions. The eligibility rules can be characterised as follows based on the basic characteristics:
Minimum 1 year worth of business operations.
Card transactions start at a minimum of ₹50,000 per month.
Minimum six-month usage of POS.
ITR for two years if the turnover exceeds ₹10 Lakhs.
Repayment is simple as it eliminates the tedious process of EMI repayments. Repayment is handled instantly through daily POS machine transactions.
You can benefit from a POS system in the following ways:
Monitors sales patterns, price, gross income, and inventory levels across all locations
Manages stock to generate product variants
Uses a special serial number to identify inventory items
Creates a single order that combines orders and purchases
Assists in the digital scanning and counting of items
You get instant access to funds and are not subject to the daily automatic repayment.
You can get a credit limit of up to ₹50,000 up to ₹1 Crore.
The loan against POS can be useful if you’re looking for financing for business expansion or to increase working capital. It is a safe, flexible, and simple way to run a parallel line of credit for your business.