If you are a real estate agent and you want cash fast, there is no better option than applying for a commission advance. With a commission advance, you don’t have to wait weeks or even months for a sale to pay out. Instead, you can receive your commission in a day. This is critical since your business requires a healthy cash flow to run.
Below are seven reasons real estate commission advance is better than other loan options:
1. Helps Your Cashflow
Operational expenses in real estate are high. Even higher is the cost of real estate products. You are constantly pumping money into your business. This is why you may not have the luxury to wait for concluded deals to pay. Instead, being able to access your earned commissions greatly helps with your cash flow. Healthy cash flow is critical to a real estate business, and advance commissions ensure this.
2. They Are Cost-Effective
Unlike most other loans, e.g. “payday loans,” commission advance for real estate is based on commission earned. The fee charged for a commission advance depends on the amounts advanced. For instance, you might be charged anywhere from 5% depending on the amount and duration. Besides, the cost of borrowing a commission advance is tax deductible since it is a business expense!
3. Fast Approval
Applying for a business loan from a bank is a long agonizing process. Not so with commission advance, which can be approved within minutes. After approval, you can get the funds in your account within the same day. No other loan option can beat this!
4. Low Fees
With a real estate commission advance, you don’t pay interest rates. Instead, you are charged a monthly flat rate depending on the size of the loan you are seeking. The rates are highly affordable compared to what other loan options charge. For instance, you can pay a flat fee of $112, give or take a few cents, for a one-month $5,000 loan depending on your provider. If the alternative is missing lucrative deals due to cash flow problems, this should be a small price to pay.
5. Credit Checks Are Not Mandatory
If you are applying for a business or personal bank loan, you will be subjected to rigorous hard credit checks. Real estate commission advances do not require you to undergo such pain. Instead of relying on your credit score, they concentrate on background checks, sales record, and current listings.
6. You Get Your Own Money
Real estate commission advance is not a loan. It’s not like a bank is lending you money and therefore has to charge you exorbitant interest rates and fees. With commission advance, you are getting an advance on your money to pay when your commission is finally paid. It’s your money, but it will take time before you receive it; your cash flow can’t wait that long.
7. You Avoid Debts
Since a real estate commission advance is an advance payment from money that will ultimately be paid to you, it’s much better than taking a loan facility from a bank. Instead of taking out a loan and getting into debt, a real estate commission advance provides you with an easy way out.
Real estate commission advance converts your pending commissions into ready cash you can use for your business expansion and maintain healthy cash flow. After clinching a deal, closing may take weeks, even months, before your commission is paid. Rather than take a bank loan during this waiting period, it makes more sense to apply for commission advance on expected commissions. This ensures your operations continue uninterrupted since your cash flow is unaffected.