Compare point of sale financing options for your business

When your business offers high-cost services or products, it can be frustrating to lose customers before they really start to shop. With the rapid growth of online payment options, there’s a solution for your business.

Point of sale (POS) financing has grown to support merchants and providers with consistent high average order value. This guide takes you through the how, who and what of POS financing to help you make the best choice for your business.

How does point of sale financing work?

POS financing is comprised of 2 subsections: online merchants and in-person financing. Online merchants can integrate customer financing directly on their existing websites. This type of POS financing can be as basic as showing a credit option at checkout to laying out a payment-per-month price on every high-ticket item that’s offered.

For in-person financing, providers can link up to your business through an existing checkout system or tablet. Some providers even let customers use their own smartphone to run a financing app.

This kind of POS financing essentially modernizes a service that was historically used by furniture and home appliance merchants, whereby a business could quickly verify a customer’s income and expenses at the point of sale to offer credit for the purchase. When a business uses a POS financing provider, it’s choosing not to take on the intrinsic credit risk of underwriting its own financing options.

What businesses can benefit from POS financing?

Typically only businesses with high average order value will benefit from POS financing. If your business provides goods or services that are relatively expensive and could require credit for the average customer to purchase them, you could potentially benefit from this financing options.

Just as with any lender, the minimum loan amount will vary from one POS financing provider to another. You’ll want to try for a minimum that matches your inventory or services, but consider other features to address both you and your customers’ needs.

Where can I get point of sale financing?

Companies offering payment solutions that enable businesses to accept card payments and process transactions electronically may also have solutions for implementing point of sale financing into your business’s checkout process. Quality service providers will offer the following:

• Uncomplicated integration with your existing checkout system
• Easy ways to onboard merchants
• Variety and flexibility in the ways customers can pay
• Quick and efficient checkout processes
• Knowledgeable and reliable support personnel to answer questions and troubleshoot any problems that arise

Compare other business loan options

Sort by:

Name	Product	Interest Rate	Loan Amount	Loan Term	Minimum Revenue	Minimum Time in Business	Loans Offered
OnDeck Business Loan		8.00% – 29.00%	$5,000 - $300,000	6 - 18 months	$100,000/year	6+ months	Secured Term, Line of Credit, Merchant Cash Advance	To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000. OnDeck offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.	Go to site More Info	Compare	loading Fetching your data...
Merchant Growth Business Loan		12.99% - 39.99%	$5,000 - $500,000	3 - 12 months	$10,000 /month	6 months	Unsecured Term, Line of Credit, Merchant Cash Advance	To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales. Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.	Go to site More Info	Compare	loading Fetching your data...
Loans Canada Business Loan		6.60% - 29.00%	$4,000 - $500,000	3 - 60 months	over $10,000/month	100 days	Unsecured Term	To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year). Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.	Go to site More Info	Compare	loading Fetching your data...

loading

CompareClear

How do I compare POS financing providers?

In addition to the When considering providers, keep both the needs of your customer and the needs of your business in mind.

• Minimum amounts. Try to align the minimum costs with the minimum cost of your product. If you can’t find a provider that matches your minimum, it may say something about your need to offer financing.
• Your costs. With most providers, you will pay to set up and use its services. Weigh how much it will cost you to set up services and train your employees against how much you’ll pay per sale and in monthly minimums.
• Application process. There’s little point in offering a financing solution if the process is so difficult that your customer leaves before completing the application.
• Mobile support. Think about how your average customer might pay their bills and manage their finances. Depending on your industry, accessing their loan info on the go may be essential.
• Who assumes risk. In most cases, the provider who takes on the credit risk. But confirm this ahead of time to avoid getting stuck without payment if a customer defaults.
• Available loan terms. The higher the average order value, the longer the maximum loan term you’ll want available. Shorter-term loans help customers pay less interest, but they can come with unmanageable monthly payments.
• Promotions and rewards. Just as credit cards can offer no-interest promotions, so do some of financing solutions.
• Hidden fees. Fees are a pain for your business and can leave your customers feeling dissatisfied. Review all of the terms before agreeing to a provider.
• Funding time. Confirm how long it will take for you to receive the cash from your sales.
• Extra equipment. Ask if you’ll need to buy new hardware to support the provider’s services.

Compare other business financing options

Benefits and drawbacks of POS financing

What are the costs of POS financing?

Depending on the lender, POS financing could come with a single cost. Some providers charge only a percentage of your sales financed through it or offer discounted rates.

Other providers, however, can be more costly. Monthly maintenance fees, setup fees, training and minimum monthly quotas can be stacked on top of the base cost for services. Carefully compare providers to ensure that the one you choose is best for your business.

Check out these other helpful articles:

• Guide to merchant cash advances
• The best business credit cards
• Guide to comparing small business bank accounts

Frequently asked questions about point of sale financing

• Will the provider help me set up a financing portal on my website or at my business?

  Most often, yes. It’s rare that a POS financing provider wouldn’t get it fully operational for your needs.

• What types of merchants or services can use POS financing?

  Industries served vary by provider as does the minimum amount you can finance through a provider. Compare your options to ensure that POS financing is cost-effective for your specific business.

• What happens if a customer wants to return a product or my business needs to provide a chargeback?

  Some providers will use your existing return policy, while others may subject returns to their own terms. Ask how returns work before signing any contract.

• Who lends the money when it comes to POS financing?

  Each provider has a different method of financing. Some are direct lenders, others go through a partner bank and still others pull from a network of lenders.