Retail Finance For Small Businesses

Retail Finance For Small Businesses

Retail finance allows small businesses another way to pay for their customers. It also gives small business another tool to help them compete with the major retailers and chain stores which often have the edge over the independent outlets and specialist stores both on and off-line.

One piece of good news for smaller businesses is that they are now able to offer the same kinds of retail finance products as their larger competitors. Retail finance enables customers to make a decision about whether or not they want to pay for their goods in more manageable monthly installments at the point of making the transaction. The fact that this option is now available to small businesses means that they can compete on a level playing field with their larger rivals when it comes to offering their customers an easier and more advantageous shopping experience.

What is more, new e-signature retail finance products offer a paperless experience, which means that the application process is smoother, easier and much faster. It also enables online retailers to offer retail finance, so that they too can compete with their larger rivals in offering their customers a choice of finance options.

The benefits of offering customer retail finance

Being able to offer your customers an attractive retail finance product at the point of sale will help to give your business the edge over its competitors and generate more revenue. Retail finance gives your customers more options and empowers them to make a decision on how and when they want to make payment. Your business doesn’t have to wait for the money however. You will receive full payment for the product from the retail finance provider, usually by BACS transfer within the next few working days.


Retail finance providers are offering interest-free credit at 0% APR, or an interest bearing finance product, on purchases that cost from around £300 and going up to around £15,000. Customers can choose to spread their payments over monthly installments from around 6 to 36 months, and in some cases even longer. The process in which the customer applies for retail finance while at the point of sale is almost immediate, so that there need not be any hold-ups, and the finance providers endeavour to achieve a high acceptance rate. The success of e-signature point of sale retail finance products is that they take the inconvenience out of the application process and increase the chances of your business being able to keep its customers happy.

How your business can get retail finance

There are a number of companies that offer retail finance packages to small businesses, including Deko (previously known as Pay4Later), Omni Capital, V12 Retail Finance and Hitachi Capital.When considering your application, retail finance providers are also likely to ask for your company’s latest set of accounts, a list of the services or products that your customers will be purchasing, and they will also want to know about your company’s returns and complaints policies. There maybe a set up fee- and then a small monthly maintenance fee. In return the finance provider will likely offer your business a dedicated account manager to help iron out any difficulties that arise, and they will also be willing to train your staff so that they can make applications at the point of sale. If you have a merchant account it may also be worthwhile checking if they offer finance options.

Do You Need a Consumer Credit License?

Since the 18th March 2015 you no longer need a Consumer Credit License (CCL) in order to offer your customers certain loan options. You do not need a Consumer Credit License if:

  • Your offer interest free loans
  • The loan period is maximum 12 months
  • There are no more than 12 payments to be made

Outside of these terms then you will have to apply to the Financial Conduct Authority (FCA) for a license, you can apply to the FCA here.  A CCL can typically take up to 6 months to be approved, and the FCA have up to 12 months to approve a license,  so it’s worth preparing your application well in advance of any planned finance activity in your business. The cost of the license will depend on the size of  your business and the exact activities you’ll be carrying out.