What would a world without banks look like for an entrepreneur? Two words: Seller Financing.

In an era of tighter financing standards and risk-averse banks, it’s worth approaching your small business challenges as if next year will be a world without banks. Acting as your own bank, or urging your business counterparts to do so, can help you flexibly solve financial problems.

Cedarcrest Capital recently sold a group of eight houses in upstate New York using seller-financing. The houses needed a lot of work, and I do not believe a traditional bank would have accepted the properties as collateral for a mortgage.

I would have preferred to sell the properties for cash, but the purchaser only wanted to put down 20%. By agreeing to serve as “the bank” for five years, through a long-term stream of payments, Cedarcrest received enough to cover closing costs and a small margin.

Most importantly, I got the properties in the hands of an owner who can do real estate rehabilitation, something which is not Cedarcrest’s core business.

I’m pretty sure my buyer was thrilled to own the eight properties without having to go to a bank.

Properly structured, a seller-financed note is a good solution that serves both the buyer and the seller well. Cedarcrest Capital also frequently purchases notes backed by real estate or businesses.

Sellers of real estate increasingly offer “Owner will Finance” when listing their houses. This lets buyers know that a speedy transaction and flexible financial terms may be available beyond what a bank would be willing to do.

The same principles apply to small businesses offering financing terms to their purchasers. Learning to thrive in a world without banks will be a key to success for entrepreneurs in the coming economic climate.

Shortly after starting Cedarcrest Capital LLC in 2004, I was cold-called by a Dun and Bradstreet representative who started asking probing questions about my business. Not wanting to broadcast my small business to strangers, and seeing no reason to take a survey, I brushed off the cold-caller and declined to offer any information about Cedarcrest.

Since then, and because I am involved in small business credit, I have learned a bit more about the company. Among other services, D&B provides business-to-business credit scores and payment history reports for between $30 and $160, depending on the level of detail sought by the purchaser.

If you are extending credit to a vendor with whom you do not have a history, or if you’re wondering if your late-paying business customers are also paying others late, you may need to access their reports.

Cedarcrest is an occasional purchaser of D&B reports in the course of researching companies, and overall I give them a C+. The data often seem thin, and their ratings systems are difficult to interpret. Still, sometimes a D&B report is the only objective information available about small business credit histories.

A D&B representative recently re-contacted me and suggested I sign up Cedarcrest for a credit-building package, in which D&B creates and then populates my business credit file with payment histories from their large network of data providers. The idea, of course, is that banks and other creditors need a way to evaluate my company. Just as the credit rating agencies focus on consumer credit, D&B has (as near as I can tell) a lock on small business credit reporting and scoring, at least in this country.

At first I was skeptical of the pitch, and put off by the approximately $600 price tag.

In fact, I was even more put off by the fact that their original pitch was to sign up to create a ‘Free’ business credit file, only to learn that the ‘Free’ version of the credit file was about as useful as a ‘Free Meal’ at the local diner, only if that meal was made entirely of papier maché.

But, having had a frustrating experience in the past dealing with banks that simply do not lend to small businesses (see my early BizBox post), I’m always looking for an edge in buffing up my business credit profile. Also, because Cedarcrest is frequently extending credit to others, I’m also interested in the mechanics of building personal and small business credit histories.

So, I splurged this week on the D&B ‘Creditbuilder’ package for the princely sum of $599 plus tax. Will this make banks or other lenders treat Cedarcrest differently in the future? I kind of doubt it.

In fact, I continue to be quite skeptical of the whole thing. But if it works, I’ll let you know.

Any Bizbox readers have an opinion on the usefulness of working with D&B?