As a developing nation, India is on the verge to become world’s biggest digital nation. After demonetization, the use of plastic money has increased immensely. The plastic money includes credit card and debit card. Both these cards are used in online transactions and for transaction in person. Be it a restaurant, retail store, spa salon or a government facility, everyone has started using credit and debit cards to make payments in person. One thing which is essential for this type of money transaction is a swipe machine also known as card payment device or Point-on-Sale (POS) machine.
These machines are best for quick bill payments and to avail exciting discounts and benefits. But these benefits are restricted for the consumers or customers or the card owners. Very few know that this device can be a crucial part in getting business credit for the businessman who holds this machine. Those who earn a chunk of revenue through the debit and credit card swipes can avail a special business loan for their various business related needs. There are many banks and NBFCs now-a-days who are offering this special loan for smaller amounts and shorter period.
One can use these funds to purchase additional stock items, expand business horizontally and vertically or even use the funds for working capital needs.
Features and benefits of availing a business loan against card swipes:
- Loan Amount:
By opting for this loan, one can avail a loan amount ranging from Rs. 1 lakh to Rs. 1 crore. The loan amount depends on the monthly card settlements. Its given keeping in account the actual usage of the POS machine.
- Short Tenures:
As this is a short amount loan mostly taken for working capital needs, one can easily get a loan for shorter tenures. The tenure ranges from 6 months to 12 months*. This totally depends on the bank or NBFC giving the loan and as per their policy.
- Extra Loan Amount Approved:
Many banks and NBFCs give as much as 200% of the monthly sales from the POS machine. This means, the more your machine is used, the more loan amount you get.
- Quick Approval And Disbursement:
As this is a short term loan, banks and NBFCs approves loan as quick as within 72 hours. The disbursement of the funds also happens quickly. Thus it allows the borrower to use the loan funds for emergency requirement.
- Extra Fees And Charges:
Banks and NBFCs do not apply heavy processing charges to approve business loan against card swipes. Minimum processing fees of 2%* is charges by banks and NBFCs. Also very few of them charge any prepayment charges.
- Easy Eligibility Criteria:
To get a business loan against card swipes banks and NBFCs have easy but very specific eligibility criteria. The borrower has to have an ongoing business for at least a year, the turnover of the business should be minimum Rs. 20 lakh, monthly card usage should go up to Rs. 5 lakh, etc. Once the borrower is clear of the required eligibility criteria, it doesn’t take much time to get a loan approval.
- Minimum Documentation:
Banks and NBFCs provide a list of minimum documents to apply for this loan. The borrower needs to present the business proof, KYC details of the business and of own, bank statement, card settlement details and VAT returns.
Check your eligibility here to get a business loan against card swipes!