What is POS?

Point of Sale (POS) is a place where the purchase transactions are made by customers by using credit cards or debit cards.

When a customer is buying something from a store, they are completing a Point of Sale (POS) transaction. The point of sale could be a store, hospital, hotel, fuel station, school, or any other location where the POS machines are used to accept payments from customers by using credit cards or debit cards.

 

Financing

The Financing against POS Receivables is availed as short-term to medium term facility against the POS receivables.

Financing is structured either as an overdraft or as a loan with a tenor of up to a maximum of 5 years.

The  finance is amortised and repaid usually in monthly instalments from the POS receivables.

Financing being self-liquidating in nature; the Banks/lenders are agreeable to  extend such financing usually with no collateral.

 

Features:

• Financing is competitively priced vis a vis other type of loans

• The credit approval process is simple

• Banks consider volume of POS transactions, value of transactions, track record of POS operations for last 2 to 3 years.

• Financing is available as conventional finance or Islamic finance

• POS receivables are assigned to the Bank/ lender

• For small value of such financing, the credit approval process is simple and fast with banks largely conducting due diligence around the POS receivables. Banks consider track record of POS receivables of up to last 2 years.

• For larger financing amounts, credit approval process of Banks includes credit assessment of full operations of the borrower, its past financials, etc along with due diligence around POS receivables.    

 

End Usage

The  finance against POS receivables can be used for the following purposes:

• Business expansion

• Opening another outlet,

• Financing inventory,

• Finance fixed assets,

• Finance debtors

• Any other operational expense