In the world of economics and entrepreneurship, access to flexible financing solutions at the right time often makes the difference between success and stagnation. Among the innovative financial tools emerging to meet these evolving needs, POS loans have gained significant traction as they enable individuals and SMEs to make purchases instantly while allowing businesses to increase sales and improve customer loyalty.
In this article, we will explore the concept of a POS loan, its advantages, and the difference between it and POS financing.
What are the types of point of sale loans?
There are two main types of point-of-sale loans:
Conventional Loan: This is the most common type of point-of-sale loan. It is offered by banks or other financial institutions, and is typically used to finance the purchase of equipment, inventory, or other business assets.
Conditional loan: This type of loan is only available to companies with a good credit history; It is offered by loan providers who collaborate with manufacturers or vendors, and is typically used to finance the purchase of certain products or services from suppliers.
A conventional loan has some advantages, such as:
- Larger loan amounts.
- Longer repayment periods.
- Flexible payment options.
However, a conventional loan may be more expensive than a conditional points loan, as it requires more stringent conditions and higher interest rates.
While a conditional loan has some advantages, such as:
- More flexible terms.
- Lower interest rates.
- Lower credit requirements.
A conditional loan remains limited in the loan amounts and repayment period available.
What are the terms of a point of sale loan?
The terms of any POS loan vary from one financier to another, but generally include the following:
- Minimum credit scores: Most financiers require a minimum credit score to obtain a POS loan.
- Repayment period: The repayment period for any loan on points of sale ranges between a short or long repayment period.
- Interest: Interest rates on point-of-sale loans vary.
- Fees: Some financiers may charge fees for the loan, such as an administration fee or early repayment fees. An administration fee is a fee charged when you take out the loan, while an early repayment fee is a fee charged if you pay off the loan early.
- Collateral: Some financiers may require collateral or security for loans, such as a mortgage or personal guarantee.
What is the difference between a point of sale loan and point of sale financing?
Point of sale loan and point of sale financing are two financial products available to businesses to help purchase goods or services. However, there are some key differences between the two.
Point of sale loan
It is a traditional loan made by a bank or other financing company. Any POS loan is paid in installments, and there is usually interest applied. This loan is usually a good option for businesses that need financing to purchase goods or services of high value, which can then repay the loan over a long period of time.
Point of sale financing
Point of sale financing is a line of credit granted to establishments and entrepreneurs to help purchase specific goods or services. Financing is repaid with each sale, and there is usually no interest applied. Point of sale financing is usually a good option for businesses that need financing to purchase low-value goods or services, which can then quickly repay the financing amount.
The following table summarizes the main differences between the two:
|Type||Point of Sale Loan||Point of Sale Financing|
|Financing type||Loan||Line of credit|
|Payment||Made in installments||Made with each sale|
|Term||Usually long-term||Usually shorter lived|
|Suitable for:||Companies that need financing to purchase goods or services of high value which can then repay the loan over a long period of time||Companies that need financing to purchase goods or services at a low value which you can then quickly repay|
Point of sale financing solutions at Al Raedah Company
Point-of-sale financing solutions from Al-Raeda are among the best financing solutions for small enterprises that aspire to grow, expand and develop their businesses. Al Raedah Company provides an easy and flexible mechanism for applying for financing and repaying the financing in monthly, weekly or daily installments without monthly installments. You can more easily achieve your goals from your business project.
Point of sale financing conditions are easy and simple:
- The financing amount for unsecured facilities starts from 50,000 Saudi Riyals to 1,500,000 Saudi Riyals.
- As for secured facilities, we offer more financing on a case-by-case basis.
- There is no payment in fixed monthly installments. For flexibility and ease of payment, payment is made daily.
- Financing up to 21% of annual POS sales with a repayment term of up to one year.
- Financing up to 38% of annual POS sales with a repayment term of up to two years.
- Financing up to 50% of annual POS sales with a repayment term of up to three years.
- You must have POS devices for at least 3 months.
- You pay a one-time fixed administration fee for the life of the borrowing
When choosing a POS loan, it is important to compare different offers from different lenders to find the best possible deal. You should take into account your own financial needs, such as the amount you need, the repayment term you need, and the interest you can afford. But why go to this trouble? We can provide the solution.
Al Raedah is the best non-banking financing institution in Saudi Arabia. Through the financing services it provides, you can obtain financing that meets your aspirations in the best possible way. So what are you waiting for? Find out how we can help you today.