Boost business with point-of-sale financing options
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Point-of-sale financing, or POS lending, makes it easier for consumers to pay for services without relying on credit cards — and its rise is only expected to continue in the coming years, with a projected value of $81.15 billion by 2030 .
Adopting a POS financing model can offer benefits for consumers and businesses. Here’s how.
Point-of-sale financing explained
Point-of-sale financing allows qualified consumers to be approved for credit when they make a purchase, then pay for it over time. In essence, they get a personal loan to pay for a specific purchase. That sets POS loans apart from traditional personal and installment loans.
Point-of-sale financing is often used in retail sales as a financing solution for credit-worthy consumers. It can also be used in other industries like healthcare or home improvement to make it easier for consumers to pay for the services they receive.
POS lending vs. buy now, pay later
Both point-of-sale financing and buy now, pay later (BNPL) are alternative consumer loans that you can obtain at the time of check-out — but they don’t work quite the same.
With BNPL, consumers can break payments into a series of installments. Customers typically make an initial payment toward the balance at check-out. The remaining balance is then due in subsequent installment payments (typically three payments spread out over six weeks).
Buy now, pay later loans are usually used for smaller purchases. POS lending, on the other hand, can be used to complete a large purchase with a longer repayment period.
Point-of-sale financing loans
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Can be used to finance large purchases with higher loan amounts
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A hard credit check may be required
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Monthly payments may be higher and extend over months or years
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Late or missed payments may negatively impact credit score
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Interest and fees may apply
Buy now, pay later
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Offered at the POS terminal as a financing option for smaller purchases
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A soft credit check may be required (or no credit check at all)
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After the initial down payment, a pre-determined number of remaining bi-weekly payments
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Late or missed payments might not impact credit score
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May be interest- and fee-free
Advantages of offering POS financing to customers
POS loans have the potential to yield numerous benefits for your business. The rising demand among consumers could increase sales and revenue as more take advantage of these types of loans.
Consumers who use POS financing may spend more per order, on average, and may be more likely to become repeat buyers. They might also be more likely to refer their friends, helping drive sales and improving your bottom line.
Businesses that benefit from POS lending
If your business provides higher-priced products or services, POS lending could be a useful solution to help customers who may not be able to pay in one lump sum. This could include the following industries:
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Dental or vision practices
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MedSpas and wellness centers
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Home improvement (HVAC, windows and doors, etc.)
For example, a fertility clinic may offer point-of-sale financing as a consumer payment option to help ease the financial burden for potential parents-to-be, or a general contractor might offer it as a financing option to help new homeowners make upgrades to their homes.
How can you offer POS lending?
Adopting POS financing and installing POS software doesn't have to be difficult — and you don’t have to do it alone.
Ally Lending works with you to customize financing offers that best suits the needs of your customers and your business model. We'll help launch your POS lending system with minimal effort on your part, so you can continue to deliver the same level of service your customers expect.
Consider the possibilities of point-of-sale financing
Your customers want to get the best deal and make purchases as easily and conveniently as possible. POS lending can provide both, while also delivering advantages for your business.
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