How to offer finance to customers.

Why financing belongs at your checkout

UK consumer finance is enjoying renewed momentum. New business volumes rose by 8% year on year in September 2025, the strongest since March, and the market looks set for around 7% annual growth. Credit cards and personal loans are up around 6%, and second-charge mortgages have surged by more than a third. Despite a small dip in in-store and online retail credit, the overall signal is clear: customers still value flexible, transparent ways to spread costs.

Digital banking is accelerating this shift. Embedded finance and AI-driven decisions shrink the time between intent and approval to minutes, particularly in retail and automotive. For younger shoppers, instant decisions are now the baseline. As inflation stabilises and the Bank of England signals the possibility of rate cuts, confidence is tentatively improving. Many households remain cost-conscious ahead of fiscal changes, yet they are willing to use credit for essentials and big-ticket items when the terms are fair and easy to understand.

For UK retailers, this creates a practical opportunity. Offering point-of-sale finance can raise conversion rates, lift average order value, and reduce basket abandonment. The effect is strongest when finance is presented clearly, with eligibility checks that do not harm credit scores and monthly costs shown upfront. Personalisation matters too. Customers expect terms that reflect their budget, their values, and their purchase context. Ethically minded buyers increasingly look for products aligned with sustainability goals, and more than one in five UK consumers now hold at least one sustainable finance product.

Kandoo is a UK-based retail finance broker, which means we connect businesses and customers with a panel of lenders while helping navigate the paperwork and compliance. Whether you sell appliances, home improvement services, or leisure goods, finance can make larger purchases accessible without eroding your margins. The key is to design a customer journey that is fast, compliant, and transparent from the first price tag to the final e-signature.

Understanding APR is not just percentages - it is what you will pay in real terms. Your customers feel the same.

Who benefits from adding finance

If you sell higher-value items or services where affordability is a hurdle, finance provides a structured bridge between desire and decision. Retailers in sectors like electronics, home improvement, mobility, and garden and leisure often see the biggest lift. Service businesses offering planned work, such as heating installations or dental treatments, can also convert more quotes into booked work with staged payments.

Customers benefit when finance fits their budget, is explained plainly, and can be applied for on a mobile in minutes. As external remortgaging inches up and households reassess budgets, many want predictable instalments with clear end dates. With strong savings growth supporting mortgage lending, homeowners are also refinancing and reallocating budgets, creating further room for planned purchases financed responsibly.

Jargon made simple

• APR: The annual cost of borrowing including interest and mandatory fees, shown as a yearly rate.

• Representative APR: A rate that must be offered to at least 51% of successful applicants for an advertised credit offer.

• Soft search: A credit check that does not impact the applicant’s credit score and is visible only to them.

• Hard search: A full check recorded on a credit file that can affect score for a period.

• Fixed term credit: Borrowing repaid over a set period with fixed or variable interest.

• Interest-free credit: A term where interest is 0% for a defined period, usually subsidised by the retailer.

• Buy now pay later: Short-term deferred payment products with specific rules and disclosures.

• Embedded finance: Finance integrated directly into your checkout or sales journey, often with instant decisions.

Practical models you can offer

1. Interest-free instalments

   • Simple monthly payments at 0% APR for a fixed term. Effective for price-sensitive customers and promotional campaigns. Retailer often funds the subsidy fee.

2. Classic interest-bearing credit

   • Fixed-term loans with a clear APR. Suitable for longer terms and higher baskets where subsidy is impractical.

3. Deferred payment with instalments

   • Nothing to pay for a set period, then instalments begin. Useful for seasonal items or renovation projects.

4. Split-pay at checkout

   • Short-term, low-friction split payments. Helpful for mid-ticket items and online conversion.

5. Second-charge options for large projects

   • For home improvement sellers where customers leverage property equity, reflecting rising second-charge activity.

6. Embedded finance with pre-qualification

   • Provide a soft-search eligibility check early, reducing friction and building confidence before the final basket.

The right product mix depends on your average order value, margins, and customer profiles.

What it means for your bottom line

Who can qualify to offer finance

Most UK retailers can offer customer finance by partnering with an authorised lender or working through a licensed broker. You will need to consider whether your activity requires Financial Conduct Authority permissions or whether you can operate under an appointed representative arrangement. The right structure depends on the products you want to offer, your sales channel, and how advice-like your conversations are. You will also need robust sales processes, compliant marketing disclosures, and clear customer documentation. Digital readiness matters. Customers increasingly expect mobile-first applications, soft-search pre-checks, and electronic signatures. If you trade nationwide, ensure your systems handle identity verification consistently and provide accessible routes for vulnerable customers. Training your team is essential, particularly around affordability, fair treatment, and how to explain APRs and terms in plain English.

Set-up in clear steps

1. Define target products, terms, and customer outcomes.

2. Choose broker or lender partners with UK coverage.

3. Confirm permissions and compliance responsibilities.

4. Integrate digital journeys with soft-search pre-qualification.

5. Configure pricing, subsidies, and promotional rules.

6. Train staff on disclosures and vulnerable customer support.

7. Launch, monitor approvals, and optimise conversion.

Upsides and trade-offs at a glance

What to check before going live

Set clear objectives for conversion uplift and average order value so you can judge the business case objectively. Map the customer journey end to end, removing extra steps and ensuring customers see eligibility and monthly costs before they commit. Put governance around promotions so representative APRs and key information are displayed consistently online and in store. Build affordability into conversations, particularly for essential items, and offer alternative options where finance is not suitable. As consumer confidence improves but budgets stay tight, prioritise transparency and simple terms that customers can compare without pressure.

Sensible alternatives if finance is not a fit

1. Flexible deposits and staged invoicing with clear milestones.

2. Loyalty credit or vouchers for future purchases to ease budgets.

3. Seasonal discounts tied to supplier funding rather than subsidy.

4. Subscription or service bundles that spread ownership costs.

5. Partnerships with credit unions for community-focused lending.

Questions retailers often ask

Q: Is demand really there in 2025? A: Yes. Consumer credit growth is stable at around 6.4% annually, with credit card borrowing close to 8.9%. New business volumes are rising, especially for personal loans.

Q: Will offering finance slow checkout times? A: Not if journeys are embedded. AI-driven decisions and soft-search pre-checks let customers apply and sign on mobile in minutes.

Q: Do I need FCA authorisation? A: It depends on your activities. Many retailers work with a regulated broker or become an appointed representative. Get compliance advice before marketing credit.

Q: How do I protect margins on 0% offers? A: Use interest-free selectively for hero products and peak periods. Track conversion and average order value against subsidy costs and adjust terms quickly.

Q: What about customers who prefer ethical options? A: Demand is growing. Around 21% of UK consumers hold sustainable finance products. Offer clear disclosures on any green credentials and avoid overclaiming.

Q: Are homeowners a distinct opportunity? A: Yes. With savings up and more remortgaging activity, some customers are comfortable financing larger projects. Suitability and clear advice are critical.

Where to go from here

Pilot with one or two finance products, measure conversion and net margin, then expand. Integrate soft-search eligibility at the start of the journey and keep disclosures consistent across channels. Train staff to explain APRs simply and to recognise vulnerability. Review performance weekly for the first quarter so you can refine terms before scaling. If you prefer a guided route, a broker can streamline lender selection, compliance, and integration.

Start small, measure rigorously, scale what works.

Important information

This information is for general guidance only and is not financial advice. Credit is subject to status, affordability, and lender terms. Product availability, eligibility, and fees vary by partner. Always seek compliance guidance on permissions and advertising before offering regulated credit.