The Pros and Cons of Point Of Sale Financing

 

Point of sale financing is a type of financing that is available to point of sale owners. It allows them to purchase point-of-sale equipment without having the upfront costs in order to get their business off the ground. This post will explore point of sale financing pros and cons so you can make an informed decision about whether or not a point of sale financing is right for your business.

Pros of Point of sale financing

Point of sale financing companies allow businesses to offer point of sale loans and credit cards. Point of Sale Financing can be an excellent way for business owners looking to grow their customer base by offering point-of-sale loans and credit cards that may not have qualified otherwise, or when a small short term cash infusion is needed in order to help the company meet payroll.

The benefits are many: it’s easy – point of sales financing solutions handle everything from application process through fulfillment; they increase your consumer reach as you can now provide point-of sale finance options at the point where people are most likely shopping - so customers don’t need to go elsewhere; there’s no collateral required which means applicants with low credit scores are more likely to qualify for point of sale financing solutions; and the rates are often lower than a traditional point-of-sale loan.

Traditional point of sales loans can be expensive, with interest rates around 20% or higher. Point of Sale Financing companies offer point-of-sale finance options that have low upfront fees (often as little as $99) and reasonable monthly payments - usually in the range from $25-$150 per month depending on your credit score. This solves two problems: it gives customers access to better financial products at an affordable price so they don’t need to go elsewhere, and it provides you with new revenue streams without adding additional costs by offering incentives like discounts or cash back rewards if customers pay.

Cons of Point of sale financing

Many point of sale financing companies charge a setup fee for the loan - often in the range from $99 to $199. This may make point-of-sale loans more expensive than traditional point of sales loans which do not have any set up costs, but it also means that you will be able to offer point-of-sale finance options without having to invest anything upfront and then wait for your money returned after customers pay down their balances. If you are a small business with low capital reserves or little cash flow coming in, this can be an attractive option when compared with other sources like banks who only give out point of sale financing as terms go long past 90 days on credit cards.