POS System: Meaning, Features & Loan against POS Machines

Point of Sale (POS) is a place where the customer makes a payment for the purchased goods and services at a particular store. It is basically the place and time where a retail transaction is completed. For each and every instance, if a customer is buying something from a store they are completing a Point of Sale (POS) transaction. After the merchant has received the payment, he/she will issue a printed receipt for the transaction to its customers. This receipt can also be sent electronically.

POS which can also be termed a ‘retail management system’ acts as a central component for businesses, as it is linked with sales, customer management, inventory, stock, equipment, staff, etc. POS is an advanced version of excel, bookkeeping, and maintaining manual cash registers. Almost every POS consists of software and hardware components that make it easy for retailers to manage their daily operations.

Features of POS

• Used majorly in retail stores, shops, counters, receptions, etc.
• Helps in sales processing and inventory management
• Keeps supplier’s records and customer’s invoices
• Advanced type of bookkeeping
• Hides barcode label creation
• Removes the hassle of keeping price tags
• Helps in issuing purchase orders
• Keeps record of quotations and stock transfers
• Allows recording and processing of transactions between an enterprise and its customers at the time of the purchase of goods and services

Not all retailers are much familiar with POS machines as they find it a bit complicated and make them hard to change their existing practice of maintaining books. By not using POS, retailers can end up slowing down their operations and missing out on critical data used to expand their businesses.

Components of POS Loans

• Display Unit: Showing the bill
• Barcode Scanner
• Keyboard/touchscreen
• Card and cash drawers
• Card Machine
• EPOS (Electronic Point of Sale) software interface
• Receipt Printer

Know, how It helps to start a business

Business owners, enterprises, MSMEs, entrepreneurs, and retailers can avail Loans against POS machines to start a new business or to operate their existing businesses. This type of loan can also be termed as Merchant Cash Advance in which the loan amount offered by banks and NBFCs depends on the business volume generated through POS terminals.

Features

• Attractive interest rates
• Loan amount as per card swipes per month
• Easy and flexible repayment options
• Hassle-free documentation process

Must Read: Most Successful Small Business Ideas for Beginners in India

Popular Banks/NBFCs offering Loans against POS Machines – April 2023

Kotak Mahindra Bank

Loan against Credit Card receivables

• Eligible Entities: Private or Public Limited Companies, Partnerships, and Sole Proprietorships
• Business loan or overdraft amount of up to Rs. 3 crores, based on yearly sales on credit and POS facility
• Collateral is not required
• Sales via credit card should be over Rs. 60 lakh
• Business should be in profits for last 2 years
• Self-employed with higher preference
• Lower processing fee
• Business existence of at least 3 years
• Option of combining a loan with an Overdraft
• Customer should own the business premises

Apply for a collateral-free business loan for MSME

Lendingkart Finance

Merchant Cash Advance / Loan against POS

• Loan amount: Maximum up to Rs. 2 crores, depending on the card swipes and monthly card settlements
• Repayment Tenure: From 6 months to 12 months
• Business existence: Minimum 1 year
• POS usage of a minimum of 6 months
• Minimum monthly card transactions from Rs. 50,000
• ITR of last 2 years, if business turnover is more than Rs. 10 lakh
• Processing Fee of 2%-3% of the sanctioned loan amount
• Prepayment Charges: Nil

Flexiloans – Loan against POS

• Loan amount up to Rs. 1 crore
• Repayment tenure from 3 months to 24 months
• Monthly Credit/Debit Card swipes of at least Rs. 20,000
• Repayment frequency: Daily
• Payback time from 90 days to 30 months
• Business Tenure of 1 year and above
• Monthly total sales of at least Rs. 1,00,000
• At least 6 months of Credit/Debit Card swipes at your business

Benefits of POS Systems

POS system helps its customers in the following ways:

• Consolidates purchases and orders in a single order
• Helps in scanning and counting products digitally
• Creates product variations by managing stock
• Identifies pieces of inventory with a unique serial number
• Tracks inventory levels, pricing, gross revenue, and sales patterns across the locations

With the emergence and expansion of virtual money in today’s financial market, it has become inevitable for retailers to perform almost every transaction via POS machines. This is required to stay in the competition in the retail sector by luring customers to purchase more and increasing sales. Retailers do introduce various promotional schemes if customers pay via POS machines. Even to start a new business, entrepreneurs can take loans against POS and can run a startup or use the loan amount for business expansion purposes or to meet working capital requirements.