Offering finance to customers explained.

Why point-of-sale finance matters right now

UK shoppers are still buying, but they want flexibility. Recent data shows consumer credit growing year on year, led by car finance and second charge mortgages, with credit cards and personal loans also edging up. Forecasts suggest credit card finance could expand further this year, even as monthly borrowing figures show occasional slowdowns. The message is simple: demand for pay-over-time options remains resilient, especially for big-ticket purchases.

For retailers, offering finance at checkout is no longer a nice-to-have. Over 70% of digitally active UK adults now use fintech services, and the UK remains a global leader in financial innovation. Shoppers are comfortable applying on their phones, linking bank data, and receiving instant decisions. In parallel, almost 84% of UK adults hold a credit or loan product, which normalises credit use across categories from home improvements to specialist equipment.

In 2025, car finance continues to underpin growth, and personal loans are supporting broader consumer credit expansion. Even when Bank of England data shows a quieter month, that often reflects timing or seasonal dynamics rather than a structural drop in appetite. For retailers, this environment rewards those who provide transparent, compliant finance choices that suit varying budgets. Clear terms, fair interest, and responsible checks are critical. Nearly half of UK credit card balances attract interest, and average personal loan APRs remain in the low teens for typical amounts. Helping customers understand total cost, not just the monthly, builds trust and reduces complaints.

Kandoo is a UK-based retail finance broker that helps retailers integrate finance options seamlessly, without building a lending stack from scratch. A broker model broadens access to multiple lenders, improves approval rates through smart routing, and simplifies compliance with UK regulation. With consumer credit on track for sustained growth, the opportunity is to turn browsers into buyers by removing affordability friction at the checkout while safeguarding customer outcomes.

Understanding APR is not just about percentages - it is about knowing the pounds and pence you will pay over time.

Offer finance to increase conversion, not confusion.

Who benefits from offering finance

If you sell higher-value goods or services, finance can widen your addressable market and lift conversion. Home improvement firms, cycle retailers, medical and dental providers, furniture stores, and automotive specialists typically see the strongest impact. Finance helps price-sensitive customers buy now and manage cash flow, while preserving your margins.

For customers, the appeal is predictability and choice. Some prefer zero-interest promotional terms, others want longer terms with fixed monthly payments, and a growing share value instant digital approvals. Transparency matters. Clear disclosure of interest, fees, and total repayable makes it easier to compare options and reduces the risk of missed payments. In a market where consumer confidence can fluctuate with inflation and jobs data, the retailers that win are those who keep finance simple, fair, and fast.

Jargon made simple

• APR: The annual cost of borrowing that includes interest and any compulsory fees, useful for comparing products across providers.

• Representative APR: The advertised APR that at least 51% of accepted applicants should receive, subject to credit assessment.

• Fixed rate vs variable rate: Fixed stays the same for the term; variable can change, affecting monthly payments and total cost.

• Deposit: An upfront payment that reduces the amount you finance and may improve approval chances.

• Term: The length of the agreement, typically 6 to 60 months for retail finance.

• Interest-free credit: 0% APR for a fixed period; check what happens if payments are missed or the term is exceeded.

• BNPL: Buy now, pay later products used for shorter terms and smaller baskets; check fees and late payment rules.

• Second charge mortgage: A secured loan on a property, often used for larger home improvements; risk includes potential repossession if unpaid.

Your finance menu

1. Interest-free credit (0% APR)

   • Great for baskets where margin can subsidise the cost. Drives conversion and larger orders. Requires strict clarity on term length and missed payment consequences.

2. Classic fixed-rate finance

   • Fixed APR personal loans with predictable monthly payments across 12 to 60 months. Works well for mid to high-ticket items and services.

3. Deferred payment options

   • Pay nothing for a set period, then begin instalments or settle in full. Useful in seasonal sectors but requires attention to post-deferral APR.

4. BNPL at checkout

   • Short-term, often lower-ticket financing with rapid decisions. Ensure alignment with regulation, affordability checks, and clear late fee policies.

5. Secured options for large projects

   • Second charge mortgages can fund major renovations. Lower rates than unsecured in some cases, but with property at risk if repayments are missed.

Pounds and pence: what it means for your business

Can your business offer finance

Eligibility hinges on your sector, average basket size, and operational readiness. Lenders will look for a clean trading history, stable financials, and processes that support responsible lending. You do not need to become a lender. Partnering with a UK-authorised broker like Kandoo can streamline approvals by routing customers to appropriate lenders and handling much of the back-end work. You will need to commit to transparent advertising, accurate pre-contract information, and a smooth application flow. Staff training is essential so customers receive balanced guidance. For secured products, additional checks apply and the customer’s property may be at risk if repayments are missed. The aim is not to approve everyone, but to match the right customers with the right products, reduce complaints, and ensure good outcomes.

From idea to live checkout in simple steps

1. Define target baskets, margins, and desired APR options.

2. Choose a broker-partner and confirm FCA compliance scope.

3. Integrate checkout journey via API, link or portal.

4. Configure products, terms, deposits, and eligibility rules.

5. Train staff on disclosures and fair customer outcomes.

6. Test journeys end-to-end with sample applications.

7. Launch, monitor approvals, NPS, and conversion rates.

8. Optimise offers, copy, and term mix by cohort.

The upsides and the trade-offs

Read this before you switch the button on

Clarity wins. Show representative APRs, total repayable, monthly payments, and the term in plain English. Explain what happens if a payment is missed, and when interest applies. Keep advertising precise and consistent with FCA rules. If you are offering 0% deals, set clear eligibility to protect margin. Monitor approval rates and reasons for decline to refine targeting rather than loosening standards. Expect fluctuations in monthly demand. Bank of England data shows borrowing can dip month to month, but broader FLA statistics point to steady annual growth, especially in car finance and personal loans. Align your mix to that reality, not a single month. Finally, use analytics to compare financed versus non-financed baskets, and manage your fee structure so the economics remain predictable.

If finance is not a fit today

1. Introduce deposits and staged invoicing to smooth cash flow.

2. Offer layaway or reservation schemes for seasonal items.

3. Provide price-match guarantees and clear returns to build trust.

4. Promote savings calculators and budgeting tools on product pages.

Questions retailers are asking

Q: Is now the right time to add finance? A: Yes, provided you implement it responsibly. Consumer credit has continued to grow annually, with forecasts supportive for 2025, though monthly borrowing can vary.

Q: Do I need FCA authorisation to advertise finance? A: You must comply with financial promotions rules. Working with an authorised broker helps ensure compliant wording and processes.

Q: What APR should I show customers? A: Display a representative APR and total repayable. Nearly half of UK card balances incur interest, so clarity on costs is vital.

Q: Will approvals hurt if my customers have thin credit files? A: A broker model can route applications to multiple lenders, improving the chance of a suitable match without lowering standards.

Q: How do I control subsidy costs on 0%? A: Limit 0% to targeted baskets and terms, and monitor margin impact monthly. Consider mixed options with longer fixed-rate terms.

Q: What about large home improvement projects? A: Secured options like second charge mortgages are growing, but they carry property risk if repayments are missed. Provide balanced information.

What to do next

Map your pricing and margin by product, define the finance terms you can sustainably offer, then speak to a UK-based retail finance broker like Kandoo to assess lender fit. Pilot with a clean customer journey, measure conversion and satisfaction, and iterate on terms and messaging. Keep compliance and staff training front and centre.

Important information

This guide is for general information only and does not constitute financial advice. Finance is subject to status, credit checks, and affordability assessments. Terms, conditions, and eligibility criteria apply. Customers should consider independent advice where appropriate.