How To Offer Finance For Contractors

What finance options really mean on the ground

Customer finance lets you offer customers a way to spread the cost of construction and contracting work over time, rather than paying a large lump sum upfront. For many UK contractors and trade suppliers, this is less about “discounting” and more about making projects viable when budgets are tight and timelines are unpredictable. With construction costs materially higher than they were in 2020 and wage pressures still evident, customers often need a payment plan that matches cash flow and stage payments. Done properly, finance can also help you protect your working capital, because you are paid promptly while the customer repays the lender in agreed instalments.

Banner concept: A modern UK construction site mid-morning, contractors in hi-vis reviewing plans on a tablet as a crane lifts steel beams, with clear safety and sustainability signage.

Why customers choose finance in contracting

In construction, customers do not just pay for materials and labour, they pay for uncertainty. Timelines move, specifications change, and the cost of inputs can rise between quote and completion. When build costs have risen by around 15-20% since 2020, many homeowners, landlords and small commercial clients prefer to keep cash in reserve for contingencies, even if they can technically afford the work. Finance is also a practical response to a market where some firms have faced serious strain, with construction accounting for a record share of UK insolvencies in 2024. Customers want reputable contractors, but they also want payment structures that feel controlled, transparent and manageable.

How finance can lift conversion and order value

Offering finance reduces the friction that sits between interest and commitment. A customer who hesitates at a five-figure quote may be comfortable with a clear monthly figure, especially when the alternative is delaying essential work or choosing lower-quality materials. In a subdued growth environment, the firms that win are often those that make decisions easier and reduce perceived risk. Finance can also support upsell ethically: better insulation, compliant electrical upgrades, greener systems and higher-spec finishes can become accessible when the cost is spread. The commercial benefit is straightforward: more approved customers, fewer postponed jobs, and a higher average transaction value without pressuring your margin.

Standout principle: If the customer understands the real cost and the repayment schedule, finance builds trust rather than doubt.

Typical transaction values (what we see in practice)

Examples of contractor products and services customers finance

1. Roofing repairs and replacements

2. Windows and doors

3. Kitchens and bathrooms

4. Electrical rewires and consumer unit upgrades

5. Boiler replacement and heating systems

6. Heat pumps, solar PV and battery storage

7. Loft conversions and extensions

8. Damp proofing and structural work

9. Driveways, patios and landscaping

FCA and compliance: what to get right

If you introduce customers to finance, you must think carefully about Financial Conduct Authority requirements and financial promotions. The key is clarity: present representative examples correctly, avoid misleading “from” messaging, and ensure customers understand total payable, APR, term and any fees. Keep your sales process focused on the build, not on advising which credit product to take. A broker model can help because permissions, lender relationships and much of the compliance framework sit with the regulated specialist, while you follow agreed scripts, training and oversight.

Broker and introducer routes: how the model works

Most contractors do not want to become a lender, and they rarely need to. In an introducer model, you present finance as a payment option and pass the customer to a regulated broker or platform to complete the application. The broker then places the application with a suitable lender, based on eligibility, affordability and the customer’s preferences. This can be particularly valuable in construction because lenders have become more flexible as rates have eased from the 2023 peak and lender participation has broadened, while specialist products continue to develop for SMEs needing fast, cash-flow-aligned funding. The right set-up keeps your team focused on delivery while giving customers a professional, compliant credit journey.

The customer journey, step by step

1. Quote the work clearly with a full specification, VAT position, and any staged milestones.

2. Present finance as an option alongside card, bank transfer and staged payments, using approved wording.

3. Customer selects “apply for finance” and completes a short eligibility check or application.

4. Identity and affordability checks are completed by the finance provider or broker.

5. Approval and e-sign: the customer reviews the agreement, total payable, term and repayment dates.

6. You schedule the job with deposit and milestone expectations aligned to the finance process.

7. Funds are paid out in line with the agreed structure, supporting your cash flow.

8. Customer repays monthly to the lender, with clear support routes if circumstances change.

Getting set up with Kandoo

Kandoo is a UK-based retail finance broker, so we help you offer regulated finance without turning your business into a lender. We will talk through what you sell, your typical job sizes, and the customer profiles you serve, then tailor a finance journey that fits how you quote and take deposits. Because construction is sensitive to timing, we focus on a process that is fast, simple and transparent, with clear customer communications and minimal admin for your team. The aim is to help you win more work while keeping the customer experience measured and compliant.

Next steps you can take this week

• Review your last 20 quotes and identify where customers delayed or reduced scope due to budget.

• Decide the finance bands you want to promote (for example, 2,000-15,000 and 15,000-50,000).

• Map where finance should appear: website, quote template, showroom, invoice emails.

• Speak to Kandoo about a compliant, contractor-friendly set-up.

FAQs

Do my customers need perfect credit to get approved?

No. Lenders assess applications based on credit profile, affordability and other checks. Some customers will be declined, but offering finance still helps because it gives eligible customers a clear route to proceed.

Will offering finance slow down my sales process?

It should not. A well-designed journey allows customers to apply quickly, with decisions often delivered promptly. The key is presenting finance early, at the quoting stage, so it supports decision-making rather than delaying it.

Am I giving financial advice if I mention monthly payments?

You should avoid advising a customer on which credit product to choose. You can explain that finance is available, share approved representative examples, and direct them to the lender or broker to complete the application and receive the regulated information.

Can finance help me take on larger or more complex projects?

Yes. By reducing upfront cost barriers for customers and improving predictability of payment, finance can support higher-value scopes. It can also strengthen your cash-flow planning, which matters in a sector where delays and cost changes are common.

Does finance work for green upgrades like heat pumps and solar?

Often, yes. Demand for ESG and energy-efficiency improvements is growing, and customers may prefer to spread the cost of upgrades that reduce long-term bills. Finance can make these projects more accessible without pushing customers towards the cheapest option.

What do I need on my website and quotes?

Clear, compliant messaging that explains finance is subject to status and affordability, along with representative examples where appropriate. You should also signpost key terms like APR, term lengths and total payable, using broker-approved wording.

How does Kandoo make this easier for contractors?

Kandoo acts as the retail finance broker, helping you offer finance through a regulated, customer-friendly process. We support you with the journey design, the compliance approach for promotions, and the operational set-up so your team can focus on delivering the work.