How To Offer Finance As An Appointed Representative

What customer finance unlocks for your business

Customer finance lets you offer a regulated way for shoppers to spread the cost, while you still focus on selling the product or service. For many UK retailers, it turns “I’ll think about it” into “Let’s do it”, because the customer is choosing a monthly payment rather than finding a lump sum. When you operate as an Appointed Representative (AR), you can carry out specific regulated activities under the umbrella of an FCA-authorised Principal, rather than going through full FCA authorisation yourself. It is often a quicker route to market, but it is not a shortcut around governance, oversight, or doing right by the customer.

Standout point: finance is a sales tool and a regulated customer outcome, not just a payment option.

Why customers choose finance in higher-value retail

Customers use finance when the purchase matters but cashflow is tight, uncertain, or simply better allocated elsewhere. In practical terms, many households and sole traders prefer predictable monthly budgeting to a one-off payment, especially when the item is essential, time-sensitive, or improves day-to-day life. Finance also helps customers buy the right specification rather than the cheapest available option, because affordability is assessed in monthly terms. The best-performing finance propositions tend to be clear, consistent, and transparent: customers understand the total cost, the term, and what happens if they miss a payment. That clarity builds trust and reduces abandoned baskets at the point of decision.

How offering finance can lift conversion and average order value

Offering finance can increase sales by widening the pool of customers who can afford you today, not “sometime later”. It typically improves conversion on big-ticket items, reduces price objections, and can increase average order value as customers step up to better bundles, upgrades, or longer-term services. It can also smooth seasonality: finance helps maintain demand when cash becomes tighter, such as after holidays or during slower trading months. The commercial benefit is strongest when finance is presented early and consistently, with representative examples that feel realistic, and when staff or checkout journeys explain the next steps without pressure.

Typical transaction values (UK retail finance)

Examples of products and services customers commonly finance

1. Furniture and home improvements

2. Bathroom and kitchen upgrades

3. Flooring, windows, and doors

4. Consumer electronics and premium appliances

5. Fitness equipment

6. Dental and elective healthcare treatments

7. Training courses and professional development

8. Automotive services, repairs, and accessories

The FCA and compliance angle you cannot ignore

If you are offering regulated finance, you must either be directly authorised by the FCA or operate under an AR arrangement with an authorised Principal. The Principal is responsible for your regulated activities and will expect you to be financially solvent and fit and proper, with suitable governance and competent people. You will also need a written AR agreement that sets out what you can do, how compliance is managed, and how outcomes are monitored. Consumer Duty still applies, including clear communications and fair value.

Introducer, broker, AR: how the models differ in practice

In the UK, there are a few common ways to support customer finance without building a fully authorised compliance function from scratch. At one end, an introducer model focuses on referring customers and sharing permitted marketing information, with the regulated firm handling the advice and arrangement. A more structured version is the Introducer Appointed Representative (IAR), which is typically limited to introductions and distributing financial promotions, rather than arranging the finance itself. A full AR can usually do more, such as credit broking activities, provided the Principal has the right FCA permissions and the AR agreement allows it. Whichever route you take, expect meaningful oversight: Principals commonly require access to records, management information, and sometimes premises and staff, because they remain on the hook for compliance and customer outcomes.

What a strong customer journey looks like (step by step)

1. Present finance early: show a monthly “from £X per month” alongside the cash price on product pages, quotes, or in-store tickets.

2. Set expectations: explain that finance is subject to status and affordability checks, and outline typical terms available.

3. Capture the essentials: collect the minimum customer details needed to start the application, keeping friction low.

4. Customer applies: the customer completes an application through the approved, compliant journey provided by the lender or platform.

5. Decision and options: present the outcome clearly, including APR (if applicable), total amount payable, and key terms.

6. Confirm the order: once approved, finalise the purchase and confirm delivery or service dates.

7. Provide documentation: ensure the customer receives the required pre-contract information and agreement documentation.

8. After-sales support: signpost how customers can get help, make changes, or raise a complaint.

9. Record keeping: retain the required evidence of what was shown, when, and how the customer progressed.

Getting started with Kandoo

Kandoo helps UK businesses offer customer finance in a way that is commercially effective and operationally practical. We work with you to understand your typical basket size, margin profile, and customer demographics, then align you with an appropriate route to market, whether that is an introducer approach or an AR structure under an authorised Principal where suitable. From there, we support implementation across your website, in-store scripts, and staff training so finance is presented consistently and compliantly. You will also have a clear view of what data needs to be captured, what management information is required, and how customer outcomes are monitored over time.

Next steps: If you want to sense-check whether you need AR permissions for your sales model, map your customer journey end-to-end and identify where regulated activity begins (for example, arranging credit versus simply introducing).

FAQs

Do I need FCA authorisation to offer customer finance?

If you are carrying out regulated consumer credit activities, you typically need to be directly FCA authorised or operate as an Appointed Representative under an authorised Principal. The right path depends on exactly what you do in the sales process.

What is an Appointed Representative (AR) in simple terms?

An AR is a business that can perform specific regulated activities under the oversight of an FCA-authorised Principal. The Principal remains responsible for compliance and customer outcomes within the scope of the agreement.

Is becoming an AR a “light-touch” option?

No. Principals must carry out due diligence to ensure you are financially solvent and fit and proper, and they will monitor you on an ongoing basis. You should expect governance, training, and record-keeping requirements.

What is an Introducer Appointed Representative (IAR)?

An IAR is usually limited to making introductions and communicating approved financial promotions. It is a lower-risk model for firms that want to refer customers rather than arrange finance themselves.

Will the Principal need access to our records?

Yes, commonly. Principals are expected to monitor ARs effectively, which often involves access to relevant records, complaints data, and management information, and in some cases visits or audits.

What is an AR agreement and why does it matter?

It is a written contract that sets out your permitted activities, compliance obligations, and commercial terms. It is central to defining what you can do and how responsibility and risk are managed.

Does Consumer Duty apply if we offer finance under an AR?

Yes. The Principal must ensure ARs deliver Consumer Duty outcomes, including clear communications, fair value, and effective customer support. In practice, that shapes how you present finance and support customers.

How quickly can we launch customer finance?

Timeframes vary by model and readiness, but AR routes are often faster than applying for direct FCA authorisation because the Principal already has permissions and infrastructure. You still need to be operationally and governance-ready.

Can we be UK-based and still serve customers overseas?

ARs generally need to be UK-based, but certain activities can take place outside the UK and you can support international customers depending on the proposition. You must still follow the UK regulatory framework when dealing with UK-resident customers.

What should we prepare before speaking to Kandoo?

Bring your average order value, top-selling categories, typical customer profile, current conversion rate, and an outline of your sales journey (online, in-store, or both). That helps determine the most suitable structure and rollout plan.