Watch for the warning signs

Bruce Holsinger, a MAC franchisee in the Cincinnati area, knows it's important to watch for the red lights that a customer is likely to fall behind, and to keep them in check before they are seriously delinquent.

"He'll start to dial back his payment," says Holsinger. "When a customer says 'I'll be $10 short this week,' you've got to be sure they know you expect that $10 next week. Otherwise, you're leaving the door open to more weeks when he'll be $10 or even $20 behind. Once a customer begins to fall too far behind, it becomes next to impossible for them to catch up. He could end up more than just behind on payments, he could start avoiding you altogether."

One way to avoid letting a customer stretch his payments too far is to ask him what he wants to "pay today." Often a guy will offer you a larger down payment than you would suggest. Some will even pay for the entire purchase that day. He may have $50 burning a hole in his pocket. If you don't ask open-ended questions and let your customers make the first offer, you could be creating your own problem.

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