Client financing has become an essential tool for businesses looking to reduce friction at checkout, meet customers’ needs, and unlock new growth opportunities. Across industries, more customers expect flexible payment options that allow them to move forward without the burden of a large upfront payment.

Whether you run a service business, an e-commerce brand, or a healthcare practice, offering customer financing can improve cash flow predictability, increase sales, and strengthen the overall customer experience. While financing programs can vary by industry, the core steps to implementing client financing are largely the same. Here’s a practical, step-by-step guide to help you implement a client financing program — with considerations for both in-house financing and third-party financing solutions.

Step 1: Determine Whether Client Financing Makes Sense for Your Business

Before offering client financing, it’s important to understand whether it aligns with your pricing, customers’ needs, and business model.

Client financing is most effective for businesses with higher upfront costs, where customers may hesitate to pay in full at checkout. This often includes service businesses, healthcare providers, and businesses with a higher average order value. Financing can help reduce price sensitivity, attract potential customers, and turn interested prospects into paying clients.

For many small business owners, financing also plays a role in increasing sales by allowing customers to say yes sooner, rather than delaying a purchase due to budget constraints. If cost is routinely a barrier to purchase — or if customers frequently ask about payment plans, alternatives to credit cards, and ways to pay over time — that’s a strong signal that client financing could support business growth.

Step 2: Choose Between In-House and Third-Party Client Financing

Once you’ve decided to offer client financing, the next step is choosing between in-house financing and working with third-party financing providers.

How In-House Financing Works

In-house financing means your business acts as the lender. You manage customer payment schedules, repayment, payment collection, and any late payments directly. While this gives you control, it also ties up cash flow and exposes your business to credit risk.

How Third-Party Financing Works

Third-party financing companies, on the other hand, handle underwriting, repayment, and payment collection on your behalf. These financing partners typically pay the business upfront, while customers repay the lender over time. For many businesses, especially those without dedicated financial teams, third-party financing providers offer a more scalable and lower-risk approach.

Cash flow is a major consideration here. In-house financing can delay revenue and strain the bottom line, while third-party financing allows businesses to get paid upfront and avoid acting as a financial institution.

Step 3: Select the Right Client Financing Partner

Choosing the right financing partner is one of the most important decisions in the financing process.

When evaluating customer financing solutions, businesses should consider approval rates, eligibility requirements, and how credit checks or credit score thresholds may affect potential clients. Cherry Payment Plans, for example, conducts a soft credit check during the application (which doesn’t hurt credit score), and more than 80% are approved instantly across credit profiles. Financing partners that approve more customers tend to drive higher adoption and better overall conversion rates.

It’s also important to understand the types of financing available. Some lenders focus on BNPL (buy now, pay later) models with short-term installment plans, while others offer longer-term consumer financing with monthly payments. The right option depends on your pricing, customers’ needs, and typical purchase size.

For healthcare providers, this step is especially critical. Healthcare financing often involves elective or out-of-pocket services, where customer experience, transparency, and speed matter. Industry-specific fintech solutions like Cherry are designed to support healthcare practices by offering financing options on behalf of the provider without adding administrative burden.

Step 4: Define Financing Terms and Structure (If You Choose In-House Financing)

This step applies only to businesses that decide to offer in-house financing.

Determining Terms and Eligibility

When you choose the in-house route, your business becomes the lender. That means you’re responsible for defining interest rates, payment terms, installment plans, and monthly payments. You must also determine eligibility criteria, decide whether to run credit checks, and establish policies around late payments.

Managing Repayment

Beyond setting terms, in-house financing requires ongoing repayment management and payment collection. Missed payments, customer disputes, and delinquent accounts can directly impact cash flow and require additional resources to manage.

Operational and Compliance

There are also operational and compliance considerations. Businesses must handle payment processing securely, manage customer financial data, and ensure their financing program aligns with applicable regulations. All of this can introduce friction into the customer experience and create internal complexity.

Because of these responsibilities, many businesses ultimately decide that in-house financing is not worth the operational and financial tradeoffs — especially when third-party financing providers can handle these elements end to end.

Step 5: Streamline the Application and Checkout Experience

No matter which financing model you choose, the application process should feel simple and intuitive.

A complicated financing process creates hassle for customers and reduces adoption. The goal is to streamline financing so it fits naturally into the point-of-sale flow, whether that’s online, in-store, or at checkout.

Modern financing programs integrate directly into e-commerce platforms, in-store systems, or digital estimates. Automation plays a key role, reducing manual work for staff while improving the user experience. Customers should be able to apply quickly, understand their options clearly, and move forward without unnecessary delays.

A smooth checkout experience improves customer satisfaction and increases the likelihood that customers complete their purchase.

Step 6: Present Client Financing at the Right Time

How and when you present customer financing options matters just as much as the options themselves.

Financing should be introduced as a solution, not a last resort. Showing flexible financing options early — such as estimated monthly payments — helps customers understand affordability without feeling pressured. Messaging like “buy now, pay later” or “flexible payment plans” can reduce sticker shock and support higher conversion rates.

Financing can also be promoted beyond checkout, including on pricing pages, during consultations, and through marketing channels like social media. When aligned with customers’ needs, financing becomes a helpful add-on rather than a barrier.

Step 7: Measure Performance and Optimize Over Time

Once your client financing program is live, ongoing measurement is key.

Businesses should track how financing impacts cash flow, average order value, and overall revenue stream. Monitoring customer satisfaction and customer loyalty can also provide insight into whether financing is improving the experience or creating confusion.

Over time, financing can become a meaningful driver of business growth by attracting new customers, increasing repeat business, and generating referrals. Regularly reviewing performance allows you to optimize how financing is presented and ensure it continues to support the bottom line.

Client Financing in Healthcare: A Specialized Use Case

While client financing applies across industries, healthcare presents unique considerations. Patients often face significant upfront costs and may delay care due to financial concerns. Flexible payment plans can help reduce that friction while supporting better outcomes.

Because of regulatory complexity and the importance of patient trust, many healthcare providers prefer working with third-party financing providers rather than managing financing in-house. Healthcare-focused solutions like Cherry are designed to support practices with transparent financing options, streamlined application flows, and a patient-friendly experience — creating a win-win for providers and patients alike.

Why Providers Choose Cherry

Over 50,000 providers who want to expand treatment access while supporting business growth already partner with Cherry. For patients, it’s flexible and easy: The application takes 60 seconds, doesn’t hurt credit score, and over 80% of borrowers are approved instantly across credit profiles. Qualified borrowers can access up to $50,000 financing, as well as flexible terms from 1-60 months with true 0% APR (no deferred interest traps).

For providers, Cherry provides upfront payment, exclusive approvals (patients must use their financing at the practice where they were approved), and the lowest merchant fees in the industry. By combining a fast, patient-friendly experience with predictable upfront payment to providers, Cherry removes financing complexity and turns affordability into a growth advantage.

FAQs About Client Financing

Does applying for financing affect a customer’s credit score?

This depends on the lender and the type of financing. Some financing programs involve hard credit checks and full underwriting like traditional financial institutions, while others, like Cherry, focus on broader eligibility criteria — offering a simple 60-second application with instant decisions that doesn’t hurt credit score.

Are interest-free financing plans available?

‍Some financing partners offer interest-free options, depending on the financing plan and customer eligibility. For qualified borrowers, Cherry offers true 0% APR on plans from 1-60 months (no deferred interest traps).

What happens if a customer makes late payments?

‍With third-party financing providers, the lender typically manages repayment and late payments. The business is typically paid the full amount up front, reducing financial risk.

How does client financing compare to credit cards?

‍Unlike credit cards, financing programs often offer structured installment plans and clearer repayment schedules, which can feel more manageable for customers, and keep them from facing costly surprises.

Making Client Financing a Win-Win

Offering customer financing can help businesses meet customers’ needs, reduce upfront barriers, and drive long-term growth. By understanding your options, choosing the right financing partners, and implementing financing thoughtfully, you can offer client financing in a way that benefits both your customers and your business.

When done right, client financing isn’t just a payment method — it’s a strategic tool that supports stronger relationships, better experiences, and sustainable growth. Find out how Cherry could transform your practice. Claim your personalized demo here.