I’m offering credit to my customers at the moment but despite the interest rate coming down it doesn’t appear to have become much cheaper. Is there anything I can do to get a better deal?

Retailers may be surprised to hear that there is something they can do. A lot of retailers might be having difficult discussions with their banks at the moment, and automatically put finance providers in the same category, but they needn’t.

Mark Murphy is former Hitachi Capital Consumer Finance managing director, and now chief executive of 5M Consulting, which helps retailers get a better deal from their finance providers. He says: “Banks and finance providers are a totally different entity, and finance providers have not had the same sort of liquidity problems.” As such, they are more open to negotiation than people assume.

The first step is to talk to the lender. There is a range of finance players from whom retailers could get a quote to use in negotiations.

Another alternative is arranging a matrix pricing system. This works in a similar way to a tracker mortgage – as interest rates go down, the prices charged to retailers go down, and as rates go up, prices increase.

If all else fails, retailers could look at how they offer credit to their customers. Murphy says: “A lot of businesses that offer finance apply it to everything, but a big money saver can be to offer it only on products that cost, say, more than £400.”

Or, instead of offering, for example, two years’ interest free credit, retailers might look at a “buy now, pay later” deal, whereby payment starts in the next calendar year. This is often still appealing to customers, and retailers do not bear the interest and start recouping payment sooner.