Credit for Customers

pikeypikey

I have a shop selling high value household products. Id like to offer customers credit eg 0% for 12 months. Does anyone know who I should go to to get this?

thanks

mikewebs

Hi there

I believe to offer anything like this you would need to get a licence under the Consumer Credit Act. What you could do is contact a finance company to see if they would provide a HP service effectively meaning you sell the goods to them and then they hire the goods out to your customer until final payment is made. I am sure you could google this - I did and came across a page from Cambridgeshire council which states:

".. Most businesses that provide consumer credit, hire or leasing facilities must be licensed by the Office of Fair Trading.

You will probably need a consumer credit licence if your business provides services including:

· Selling goods or services on credit
· Offers hire purchase terms
· Debt collection
· Lending money
· Issuing credit cards
· Arranging credit facilities for others
· Leasing or hiring out goods for periods longer than 3 months
· Providing advice on debt.
· Credit references

You may not need a licence if you:

· Only provide credit or hire facilities in excess of £25,000
· Deal only with limited companies
· Accept repayments in no more than 4 instalments per year
· Only accept credit cards issued by others.

The Office of Fair Trading website gives guidance for businesses relating to consumer credit licences...."

Remember, if you do decide to go down this route, build in the total cost to you of the 0% Finance deal before you decide on your pricing structure.

pikeypikey

Not sure if this is what i mean. Are there not finance companies who provide the finance deal?

for example if i go to DFS and buy a sofa with a 0% deal my payment contract is with a separate finance company?

Im not sure how it works, but this is what im thinking.

starM

Yes it is. DFS use three different credit companies, the first one I heard of is Hitachi Finance. If they decline you then they may go to GE Capital or Beneficial Fianance.

S