To become or remain successful, a business must capitalize on buyer demand, marketplace trends and technological opportunities. With layaway and merchant credit lines on the decline in recent years, one solution that’s gained traction with consumers and businesses alike is point-of-sale (POS) financing.
POS financing offers consumer flexibility, secure and easy implementation, and new revenue possibilities for business owners. As merchants and consumers rebound from the economic effects of the pandemic and inflation, 2022 is an opportune time to consider POS loans or financing options.
For some businesses, POS financing may be crucial to remaining relevant and competitive in the new year. Consumer use of buy-now-pay-later financing has skyrocketed over the past two years, and POS financing was particularly popular with holiday shoppers.
How POS Financing Works
If you’re not already familiar with POS financing, don’t worry. One of its advantages is its simplicity.
Point-of-sale financing is exactly what it sounds like. It allows consumers to get immediate financing at the point of sale, or at the moment they go to make a purchase. Via a third-party loan resource like LendingUSA, consumers can purchase products or services from a merchant that they might not otherwise be able to buy in a single transaction.
When consumers have this option, they have fewer reasons to not purchase your product or service. The approval process is fast and straightforward, and it keeps buyers in-house rather than seeking financing elsewhere or not buying at all. And the qualifications for securing POS financing may be less stringent than those of traditional lenders.
Merchants are paid quickly and directly through LendingUSA, and the customer is able to make incremental payments over time with fixed rates and no prepayment penalties. It’s a true win-win; consumers get the product or service they desire, and merchants convert a sale and gain a happy customer.
The Business Benefits of POS Financing
Additional transactions, prompt payment and patron satisfaction are motivation enough for many merchants to offer point-of-sale loans. But these aren’t the only reasons to consider POS financing.
Point-of-sale financing can help businesses:
- Increase their overall sales, average sale amount and cash flow
- Broaden their customer base
- Gain repeat customers
LendingUSA’s POS financing solution for merchants also provides effortless integration with existing point-of-sale platforms.
From cosmetic surgeons to dog trainers to traditional retailers, more businesses have seen the advantages of POS financing as awareness of the service grows and consumer demand expands with it. Even Walmart — the largest company in America — has shifted away from layaway to point-of-sale financing.
Consumer Demand for POS Financing
From layaway to store credit, consumer-facing financing options have existed for decades. But POS financing, which offers immediate pre-approval, repayment flexibility and clear terms, has increased the allure of the buy-now-pay-later concept among consumers.
Between 2015 and 2019 alone, the volume of POS loans more than doubled. In fact, this growth cut into credit card and traditional lending model revenues by an estimated $10 billion.
This is because many consumers don’t want to use cards for purchases, and some are particular about what types of purchases they’ll make with their credit cards. Consumers have also migrated toward POS financing because it offers fixed terms and payment options — unlike credit card companies. LendingUSA even offers no interest on principal on select loans, if the loan is repaid within six months*.
When you combine these factors with the fact that approximately 30% of Americans don’t have a credit card, it only makes sense that buyer demand for POS financing continues to rise.
Point-of-Sale Financing by Industry
The retail sector is no stranger to POS financing. Unfortunately, other businesses have yet to seize on the merits of point-of-sale loans.
This often occurs because a particular merchant doesn’t believe their business model is conducive to POS financing, but consider the variety of businesses that currently partner with LendingUSA:
- Chiropractors
- Funeral home directors
- Funeral arrangers
- LASIK providers
- Pet retailers and pet service providers such as dog trainers
- Cosmetic surgeons
This list is wide-ranging, but it’s far from exhaustive. If your customer base would benefit from a buy-now-pay-later option, POS financing is likely available for your business.
Make a Resolution to Grow Your Business in 2022
There are plenty of reasons for businesses to be excited about 2022.
The economy has shown tremendous progress in its recovery from the early stages of the pandemic, with consumers spending more than many experts predicted. And as the job market stabilizes and inflation corrects, 2022 is the perfect time for merchants to resolve to win new customers and broaden their revenue streams.
At LendingUSA, our POS financing solutions are designed to help merchants succeed. With low fees, high loan amounts, fast payments and pre-approvals in seconds, we make growing your business an easy resolution to keep.
Request a demo today to learn more.
