The Complete Guide to Offering Finance as a Retailer

Who Should Read This Guide

If you run a shop, salon, or business selling direct to the public in the UK, this guide is for you. Whether you’re online, on the high street, or working from your garden shed – if you want to help your customers spread the cost of their purchases (and boost your sales), keep reading.

What Do We Mean by “Offering Finance”?

No need to overthink it. Offering finance simply means giving your customers the option to pay for their products or services in instalments, rather than handing over all the cash upfront. Think of it a bit like letting someone buy a sofa and break the cost down over a year instead of paying in one go.

Why Bother? Here’s What’s In It for Retailers

Let’s be clear: offering finance isn’t about trapping your customers or making life complicated. It’s about giving them flexibility and making your goods or services accessible. Here’s why it matters:

• Bigger Baskets: Customers are more likely to go for the extras when they’re offered finance.
• More Sales: If it’s easier for people to buy, more will say yes.
• Customer Loyalty: People remember businesses that make life easier.
• Upsell Opportunities: With split payments, the pricier model doesn’t feel so scary.

Bottom line: If you want to keep up with the big players, finance should be on your radar.

How Does Retail Finance Actually Work?

Let’s skip the small print for a second. Here’s the gist:

1. The Customer Picks Their Product: They shop as normal.
2. You Offer Finance at Checkout: They see the option to pay monthly (think just like Klarna or PayPal Credit).
3. Application Time: The customer fills in a quick online form. No piles of paper. Usually takes a few minutes.
4. Approval (or Not): The finance provider runs a check. If approved, they buy the product from you (you get paid), and the customer pays them back over time.
5. Everyone’s Happy: You’ve made a sale, and the customer gets what they need without blowing their budget.

A Real-Life Example: Sally’s Furniture Store

Sally runs a local furniture shop. Her best-seller – a gorgeous sofa set – costs £1,200. Some customers love it but can’t afford to pay all at once. With retail finance, Sally offers a payment plan: £100 a month for 12 months, interest-free.

Result? Her sales shoot up. Customers walk away happy, her cashflow improves, and she stands out from the national chains.

Key Terms Explained (No Gibberish, Promise)

• Retail Finance Broker: A go-between who arranges the finance for you. Think of them like a matchmaker, pairing you with the right lender.
• APR: Annual Percentage Rate. The cost of borrowing, shown as a yearly rate. Easy way to compare deals.
• Interest-Free: No extra cost to the customer – what they borrow is what they repay.
• Soft Credit Check: An initial credit check that won’t leave a mark on your customer’s credit file.
• Deferred Payment: Payments start after a set period, let’s say three months down the line.

Frequently Asked Questions

Do I need to be a big business to offer finance?

Not at all. Even small businesses (including one-person shops) can offer finance with the help of a broker.

Will I get my money straight away?

Yes, if the finance is approved, you get paid upfront by the lender. Customers pay the lender back over time.

Is it complicated to set up?

No faff. Most brokers handle the paperwork and tech, so you can focus on running your business.

Do customers need good credit?

Most finance deals involve a credit check, but there are options for those with less-than-perfect credit.

Are there any legal hoops?

You’ll need to be an appointed representative if you’re offering regulated finance, but again, a good finance broker can help sort this for you.

Ready to Make a Change?

If you’re keen to boost sales and make life easier for your customers, it’s time to consider offering finance. No jargon, no hard sell – just a smarter way to do business.

Want to know exactly how it’d work for your shop? [Contact Kandoo today] and we’ll walk you through (without any of the usual hassle).