---
title: What’s the difference between a POS loan and a traditional business loan?
description: "POS business loan is a loan that is taken by businesses, especially those businesses that receive payments from their customers through a POS (Point-of-Sale) machine. In this loan some percentage installment is directly deducted from the daily card sales of…"
url: "https://yazodo.com/help/pos-loan/whats-the-difference-between-a-pos-loan-and-a-traditional-business-loan/"
updated: "2025-12-05"
category: POS Loan
tags:
  - "Loan Features & Terms"
  - POS Loan
  - POS Loan vs Other Loans
  - "Processing & Assessment"
---

# What’s the difference between a POS loan and a traditional business loan?

POS business loan is a loan that is taken by businesses, especially those businesses that receive payments from their customers through a POS (Point-of-Sale) machine. In this loan some percentage installment is directly deducted from the daily card sales of the business, hence it is also called a flexible repayment loan.

On the other hand, in a traditional business loan, the repayment is done in the form of fixed EMIs, irrespective of the sales of the business or not. Moreover, in a POS business loan, there is often no need for collateral whereas in a traditional business loan, there is collateral, more verification process and documentation work as well.