The commercial case for customer finance

Customer finance lets you sell the installation your customer wants, on terms they can manage. For heat pumps, the gap between the headline grant and the remaining balance is often where decisions stall, even when the long-term running cost case stacks up. By offering a clear monthly option alongside a cash price, you turn a large, one-off cost into a predictable household commitment, helping customers move from interest to installation. Done properly, finance also supports your cashflow, reduces time spent negotiating price, and creates a more consistent sales pipeline.

Why homeowners lean on finance for heat pumps

Heat pumps sit in an unusual bracket: they are a home improvement, a heating system replacement, and a future energy decision rolled into one. While the Boiler Upgrade Scheme (BUS) can reduce the upfront cost by up to £7,500 in England and Wales, many installs still leave a meaningful balance to pay. Customers also respond to trusted cues in the market, such as VAT relief for heat pump installations and widely promoted low or even 0% finance offers. Add in occasional bank cashback incentives linked to heat pump installs, and finance becomes part of the decision framework rather than a last resort.

How finance lifts conversion, margin and order values

Offering finance can increase sales by reframing affordability and reducing friction at the point of commitment. Instead of competing purely on the lowest cash price, you can compete on clarity and choice: deposit options, term length, and whether repayments start immediately or after installation completion. In the UK market, it is common to see fixed-rate plans over 5 to 10 years and shorter promotional 0% options over up to 2 years, which can be particularly persuasive for customers who could pay cash but prefer to spread the cost. Finance can also increase attachment rates for add-ons such as smart controls, cylinder upgrades, solar panels, or a home battery.

Typical UK heat pump transaction values

Standout line: When you present cash price, grant, and monthly repayments on one page, objections move from “too expensive” to “which term suits us?”.

What you can put on finance

1. Air source heat pump unit and installation labour

2. Heat pump cylinder, pipework and radiator upgrades

3. Smart thermostat and zoning controls

4. Electrical works (consumer unit, isolators, cabling)

5. Commissioning, testing and handover

6. Servicing bundles and extended warranties (where eligible)

7. Solar PV, inverter and home battery (where offered as part of a broader home energy system)

FCA and compliance essentials to get right

In the UK, offering finance touches FCA regulation, so roles and responsibilities must be clear. As an installer, you typically act as an introducer rather than the lender, and you must avoid giving regulated credit advice unless authorised. Marketing needs to be fair, clear and not misleading, especially around APRs, 0% promotions, deposits, and when repayments start. Ensure customers can see key information before applying, complete eligibility checks properly, and handle personal data in line with UK GDPR. Keep a clean audit trail of what was shown and agreed.

Introducer and broker models, explained simply

Most installers do not fund loans themselves. Instead, you introduce the customer to a retail finance broker who can source an appropriate lender and manage the regulated parts of the journey. You keep control of the sale, pricing and installation, while the broker handles application flows, lender panels, decisioning, and compliant documentation. This model also helps you offer more than one “shape” of finance: for example, shorter terms for customers who want to clear the balance quickly, longer terms for lower monthly payments, and structures that align with grant reductions. In the wider market, installer partnerships with third-party platforms and back-office integrations are increasingly common, embedding finance directly into quoting and ordering.

A practical customer journey you can implement

1. Quote in two columns: show the full cash price and a finance illustration, then separately show how any grant reduces the customer balance.

2. Confirm what is included: list installation scope, add-ons, warranties, and timelines so the finance covers the right basket.

3. Explain the moving parts: term length, deposit (if any), APR, and whether repayments start immediately or after installation completion.

4. Run a quick eligibility check: customers want reassurance before a full application, especially for higher ticket installs.

5. Customer completes the application: the broker-led flow gathers details and runs the lender decision.

6. Approval and agreement: customer reviews and signs credit documentation, with clear pre-contract information.

7. Schedule installation: align finance milestones with install dates and any grant administration.

8. Installation and sign-off: ensure handover is documented and any “pay after install” features are applied correctly.

9. Activation and repayment: payments begin per the agreement terms, and the customer knows who to contact for account queries.

10. Aftercare: offer service plans, maintenance reminders, and referral prompts once the system is performing well.

Next step suggestions:

• Add a finance toggle to your website quote form (cash vs monthly).

• Train your team on three scripts: “grant plus finance”, “0% promotional terms”, and “low deposit options”.

• Build a one-page finance explainer you can send immediately after the survey.

Getting set up with Kandoo

Kandoo is a UK-based retail finance broker, which means we help you offer customer finance without you becoming a lender. We support you in presenting finance clearly at point of sale, with a journey designed to be straightforward for homeowners and operationally light for your team. In practice, you can position finance as a standard payment option alongside cash and bank transfer, then introduce eligible customers into an application flow that fits your sales process. The aim is simple: reduce drop-off at the decision stage, increase average order value where customers want broader upgrades, and keep the experience professional, consistent and compliant.

FAQs

What APR should I expect for heat pump finance?

APRs vary by lender, term and customer profile. In the UK market you will see competitive rates advertised around 5.9% to 7.9% APR for longer terms in some offers, with other common fixed-rate options around 9.9% APR over 5 to 10 years.

Do customers need to pay a deposit?

Not always. Some offers are available with a 0% upfront deposit, while other lenders commonly expect a deposit, sometimes around 15%. Having more than one option helps you serve different customer budgets.

Can finance start only after installation is complete?

Yes, some market propositions delay payments until installation completion. This can be reassuring for homeowners, but you must present the terms clearly and ensure the installation and sign-off process is well documented.

How does the Boiler Upgrade Scheme (BUS) affect finance?

In England and Wales, BUS can reduce the upfront cost by up to £7,500. Practically, it lowers the balance the customer needs to fund, which can materially reduce monthly repayments and improve affordability.

Are 0% finance deals available?

Some providers promote 0% interest options, often for shorter periods such as up to 2 years, subject to eligibility and promotional terms. Where available, they can be powerful for customers who want to minimise interest and pay down quickly.

Can I finance solar panels and a home battery with the heat pump?

Sometimes, yes. Certain providers bundle heat pumps with wider home energy upgrades and allow finance across the whole system. Whether this is possible depends on your offering and the lender criteria.

What can I say to customers without giving regulated advice?

You can explain the options, the process, and the costs shown on the illustration, but you should avoid telling a customer what they “should” choose. Focus on factual comparisons, and let the customer decide based on term, deposit, and monthly cost.

Will offering finance slow down my sales process?

If implemented properly, it usually speeds up decisions by removing the “we need to save up first” delay. The key is to introduce finance early, keep the quote simple, and use a streamlined broker-led application flow.

How do I promote finance on my website compliantly?

Use clear representative examples where required, avoid hiding key costs, and ensure APR, term, and any deposit assumptions are prominent. If you run promotions like 0%, be specific about duration and eligibility.

Is finance only for customers who cannot afford a heat pump?

No. Many customers use finance to preserve savings, match repayments to monthly budgets, or fund a broader package of works. Present it as a normal payment choice, not a last resort.

Final thought: Finance works best when it is part of your quoting system, not a separate conversation you introduce only after price resistance.