5 Mistakes Businesses Make When Offering Finance

Who Will Find This Guide Handy

If you run a UK business and want to offer finance options to your customers—whether you’re a plumber, car dealer, or beauty salon owner—this guide is squarely aimed at you. Even if you’re just thinking about adding finance to your services, read on to dodge the common pitfalls.

What Do We Mean By "Offering Finance"?

Offering finance means giving your customers a way to spread the cost of what they’re buying. Instead of paying the full whack up front, they can pay in instalments—often with interest, though sometimes interest-free.

Why Paying Attention Really Matters

Get finance wrong and you can end up:

• Out of pocket on every sale
• In hot water with regulators
• Putting customers off altogether
• Losing trust if payments go sideways

It’s not something to leave down the back of the sofa. Get it right, though, and it can mean more sales, happier customers, and a reputation for being helpful—not a headache.

How Offering Finance Actually Works (Without the Fluff)

1. You partner with a finance broker or lender: They sort the legal bits and credit checks.
2. You tell your customers about the finance options: This needs to be clear and up-front.
3. Customer applies for finance (often online or in-store): They fill out a quick form.
4. Broker or lender gives a decision: Quick yes or no—no mucking about.
5. If approved, you get paid by the lender: The customer pays the lender back over time.

It’s basically a triangle—you, your customer, and the finance provider. Simple as that.

5 Clangers Businesses Often Drop (And How To Dodge Them)

1. Not Being Upfront About Costs - Hiding fees or not explaining interest properly puts off customers and lands you in trouble fast.

2. Ignoring Regs (Regulations) - Finance is regulated. If you don’t play by the rules, you risk fines or losing your right to offer finance.

3. Picking the Wrong Finance Partner - Some lenders are slow or have poor acceptance rates. That means frustrated shoppers and lost sales.

4. Poor Staff Training - If your team can’t explain finance in plain English, customers will switch off—or worse, get confused and complain.

5. Forgetting Aftercare - Just because the sale’s a done deal doesn’t mean you should disappear. Be ready to help if customers have questions.

How This Looks In Real Life: The Home Improvement Blunder

A UK double glazing firm started offering finance but didn’t bother explaining the interest rates clearly. Customers felt tricked and left negative reviews online. Sales slumped fast until they sorted honest, easy-to-understand info and trained their staff.

Say Goodbye to Jargon – Your Handy Jargon Buster

• APR: The true cost of borrowing, including interest and any sneaky fees.
• Credit Check: A check to see if someone’s likely to repay. The finance provider runs this.
• Broker: A middleman connecting you to lenders—like Kandoo.
• Regulated: Means governed by rules from the Financial Conduct Authority (FCA).

Questions People Ask (FAQs)

Do I need a licence to offer finance?

Most UK businesses need FCA permission or must work with a regulated broker.

What happens if a customer misses a payment?

The lender chases it up, but angry customers can still blame your business.

Is offering finance worth it for small businesses?

Yes, but only if done right—avoid all the mistakes above!

Next Steps: Make Finance Work For Your Business

If you want simple, hassle-free finance solutions for your customers, don’t wing it. Get in touch with Kandoo and we’ll help you get set up—no jargon, no headaches, just good old-fashioned advice.