The Ultimate Guide to: Offering Retail Finance

Who Should Read This Guide

If you’re a UK business owner thinking there must be a better way for your customers to pay, you’re in the right spot. Whether you run a high street shop, offer home improvements, or sell services people love but don’t always have cash for upfront, this guide is for you. Maybe you’ve seen big retailers let customers split the cost or pay later, and wondered, “Could I offer this too?”

Maybe you get quizzed about monthly payment plans and worry you’ll lose business if you say, “Sorry, it’s pay in full.” Or perhaps you’re just curious about how retail finance works, and if the effort is worth it. Whatever your situation, we’ll walk you through everything, no nonsense, so you can decide if retail finance is right for your customers—and your bottom line.

What Does "Offering Retail Finance" Mean?

Offering retail finance simply means giving your customers the choice to buy now and pay later, usually with a finance plan (like monthly instalments). Instead of paying in one go, shoppers spread the cost over time. It’s a bit like store cards you might have seen at major chains, except these days, you don’t need to be a huge retailer to do it.

This isn’t just about selling sofas or TVs on tick. Retail finance covers loads of purchases, big and small. Whether you sell bikes, jewellery, home improvements, or even dental treatments, if your customers want to spread the cost, retail finance opens the door. And—here’s the important bit—you get paid up front by the finance company, not left chasing penny-pinchers or payments that never come.

Why Retail Finance Helps Your Business (and Your Customers)

Let’s be honest, people like a bit of breathing space when it comes to big or unexpected spending. Offering finance at the checkout can make the difference between someone choosing you—or going somewhere else.

A few reasons why it matters:

• More customers say yes. If the upfront price makes people hesitate, spreading the payments can tip the scales.
• Bigger baskets. Customers can afford more if they’re not lumped with a big upfront bill.
• You get your money quickly. The finance partner pays you, not the customer, so cash flow stays healthy.
• Sets you apart. It shows you’re thinking about your customers’ needs—not just your till.

Bottom line: Retail finance is about making life easier for both you and your customers.

Offering Finance: The Nuts and Bolts

So, how does it actually work? Let’s walk through it in plain terms.

1. You team up with a retail finance broker (like Kandoo). They connect you to lenders who can offer payment plans to your customers. 2. Customer finds something they want, and instead of paying the entire bill in one go, they pick a finance option at checkout (online or in your shop). 3. Application time. The customer fills in a quick online form. Most decisions come back in minutes. No mountain of paperwork or awkward interviews. 4. The lender does a quick credit check to decide if the customer is eligible and, if accepted, sets up a payment plan (often anywhere from 3 months to several years). 5. You get paid by the lender—fast. Usually within a couple of days. Your customer starts repaying monthly, directly to the finance company (not you). 6. Job done. No chasing payments. The risk is with the lender if someone struggles to pay, not you.

A few home truths:

• You’ll need to get set up with a provider. There’s usually some checks (to make sure you’re a legit business) and a bit of training. But it’s less hassle than most people think.
• The finance company or broker usually takes a small cut (think of it like a card payment fee).
• You control which products are eligible, and can pick finance terms that suit your shop and your customers.

Most systems are slick now: you can offer it in-store, over the phone, or straight from your website.

What to Think About Before You Dive In

It’s not all sunshine and rainbows. Here’s what you need to know first:
• FCA Regulations: Offering finance is a regulated activity in the UK. You’ll need approval or work through a broker who handles the legwork.
• Customer experience matters: Finance shouldn’t slow things down or confuse shoppers. Pick a provider with easy, clear processes.
• Costs to you: There’s a fee for offering finance, usually a percentage of the sale. Weigh that up versus how much extra business you’ll win.
• Training: Staff need to know the basics, like how to spot the right customers for finance and answer common questions.
• Returns and refunds: Make sure you understand how refunds work with your finance partner. There’s extra admin if someone changes their mind or cancels.

Think about your audience—some will love the flexibility, others may just want to pay the old-fashioned way. Keep it an option, not an obligation.

Simple Lingo for Tricky Terms

APR: Annual Percentage Rate. The total cost of borrowing in a year, including fees and interest.

Agreement: The contract between your customer and the lender.

Broker: A middleman who finds suitable lenders for your customers (Kandoo is an example).

Soft Search: An initial credit check that doesn’t harm your customer’s credit score.

Deposit: The amount your customer puts down up front, before the finance kicks in.

Interest Free Credit: A plan where your customer only pays back what they borrow—no extra costs tacked on.

The Good, The Not-So-Good

Pros:
• More customers buy or spend more
• You get paid upfront, no chasing debts
• Helps you beat the competition
• Simple for you and your staff to use

Cons:

• Small fees eat into each sale
• Can add admin or training
• Regulated: more rules to follow

What Else Can You Offer Customers?

Not every shopper needs finance. It pays to have options:
• Layaway Schemes: Customer pays bit by bit, then collects the item when it’s paid for (no credit needed).
• Credit Cards: Still popular, but not everyone has one.
• Buy Now, Pay Later: Slightly different—some BNPL providers delay payment but don’t always offer structured plans or protections.
• Personal Loans: Customers sort these themselves, so less admin for you, but also less convenience.
• Discounts for Upfront Payment: Give customers a reason to settle in full if they prefer.

Each option has its pros and cons—find out what your customers actually want before you decide.

Your Questions Answered

Is retail finance only for big businesses? No. Even the smallest UK retailers can offer finance if they use a broker like Kandoo, who handles the tricky bits and connects you to lenders.

Does it cost me anything? Usually, yes. There’s a fee, but it’s often offset by extra sales and bigger purchases.

Can any customer apply? Most can, as long as they’re over 18, UK residents, and pass a credit check. It’s up to the lender’s criteria.

Will I have to chase payments if a customer defaults? No. You’re paid by the lender, even if the customer misses payments later.

What about refunds? If your customer cancels or returns the product, you’ll have to process the refund via the finance partner. Keep your returns policy in line with your agreement.

Is it complicated to set up? It’s easier than it used to be. A good broker sorts the paperwork, connects you to the right lender, and gives you training.

Is offering finance right for every business? Not always. Think about your customer base, the size of transactions, and whether it will boost sales enough to cover any extra fees or paperwork.

Ready to Take the Next Step?

Curious about offering retail finance with less faff and more support? Kandoo can guide you through, step-by-step. Get in touch for a no-obligation chat or browse the site to see how easy it can be to get started—without the jargon or hassle.