Our nation’s current financial climate presents a challenge for small businesses in any field. The credit crisis has affected a substantial portion of the country’s consumer base; 37% of the country has a credit score of 650 or lower, and approval rates on loans are frequently tightening.

A lack of access to financing options can often act as a barrier between consumer and provider. Turning down these customers outright ultimately means turning down business from a high percentage of the population. What if there was a practical way to meet the consumer halfway, and take care of the lending yourself?

It’s no surprise that many businesses are taking matters into their own hands, and using innovative financing models to make their services more available to the consumer. While we have made the case for membership plans and their success in providing access to medical procedures, this model may not be right for every business. In other cases, in-house financing is the key to putting your services and products in the hands of your client.

At its core, modern in-house financing is an updated version of the small town shop-owner keeping a “tab” for his customers. When the shop-owner knew the customer and saw him on a daily basis, this model made sense. All he needed was a small notepad and a #2 pencil to keep track of the various purchases made, trusting that he would be repaid in a reasonable amount of time.

While the simplicity of this system is charming, it’s largely been abandoned in the modern age. Keeping track of multiple loans is demanding, and the #2 pencil and notepad aren’t enough. Without a comprehensive system to track lending, providing “tabs” can be costly and problematic, especially for businesses without a dedicated accounts receivable department.

Luckily, there is a solution available to businesses of any size. Thanks to advances in loan servicing software, any business can create a comprehensive in-house financing program, tracking loans, payments, and interest with the click of a mouse. Required down payments and interest plans minimize the risk associated with lending, while over time generating a high level of wealth creation for the business owner.

In the coming weeks, we’ll examine who is using this system in various industries, and how it can be modified to meet the needs of any small business.