How to Set Up a 0% Finance Offer That’s FCA-Compliant

Who Should Read This Guide

If you’re a UK business owner or retailer thinking about offering your customers interest-free finance, this guide is for you. Maybe you sell sofas or bikes, or you’re an online store. If you want to boost sales without tripping up on the regulations, keep reading.

What Is a 0% Finance Offer?

Let’s keep it simple: a 0% finance offer lets your customer buy something now and pay it off later, interest-free. No sneaky costs, just straightforward monthly payments until the balance is cleared.

Why Bother with FCA Compliance?

Here’s the deal. The Financial Conduct Authority (FCA) sets out rules to make sure finance offers are fair and clear for everyone. If you’re not compliant, you risk fines, legal trouble, and a reputation that’s taken a beating. Do it right, and you build trust—making your customers more likely to do business with you again.

Breaking Down How 0% Finance Actually Works

Here’s how most 0% finance offers run, step by step, minus the waffle:

1. Work with a finance provider: Don’t try to lend cash yourself without proper approval. Partner up with someone regulated (like Kandoo!).
2. Decide what you’re offering: Make it crystal clear—what’s the loan period? Any fees? What happens if someone pays late?
3. Check your own FCA permissions: Are you introducing customers to finance? Then you may need authorisation, or a relationship with someone who’s got it.
4. Make the offer obvious: The advert or website must show it’s a 0% deal, not hide costs in the small print. The FCA hates surprises.
5. Get the paperwork right: Use documents checked over by your finance partner. Customers should know exactly what they’re signing up for.
6. Training your team: Staff need to know what they can and can’t say about the finance.

Real-World Example: Sarah’s Sofa Store

Sarah owns a shop in Leeds. She wants to offer customers the chance to spread the cost over 12 months, paying nothing extra. She signs up with a regulated finance broker, uses their point-of-sale system, and makes sure every sign and webpage spells out “0% finance—no fees, no interest”, with plain-English terms handed to customers. Sarah’s staff are trained to help without pressuring anyone. Easy. Her sales go up, and her customers walk away happy, without confusion.

Key Terms Explained

• FCA (Financial Conduct Authority): The folks checking everyone plays by the rules
• APR: Annual Percentage Rate, basically the true cost of borrowing (should be 0% here)
• Broker: Connects a customer to a lender, doesn’t lend money themselves
• Regulated: Meets the FCA’s standards, can legally provide finance products

Questions People Often Ask

Do I need a licence to offer 0% finance?
Yes, usually. You either get FCA authorised or use a broker who is.

Will 0% finance hurt my profits?
Not if it brings you more business. You’ll typically pay the finance provider a fee, but most see higher sales.

Is there a lot of paperwork?
Less than you’d think, especially if your finance partner is on the ball. It can be a quick process.

Can my staff talk about finance?
They need basic training so they don’t overstep—your finance provider should help with this.

Ready to Get Started?

Setting up a 0% finance deal doesn’t have to be painful. If you want hassle-free advice or a chat about how Kandoo can help, get in touch today and make your offers stand out (for all the right reasons).