Did you know you could get a commission advance as you wait for your commission to be processed? There are commission advance companies that can advance you cash as you wait for your commission from a house you sold. This is not a loan. It is simply cash advanced to you on the condition that, once your commission is processed, the advanced cash will be repaid.
With an advance, you are able to maintain cash flow for your business based on expected earnings. Is this right for you? There are a number of factors to consider.
1. Make Sure You Are Dealing with an Established Company
Not every cash advance company is ideal for you. You should make sure you are dealing with an established and reputable cash advance company with a record of providing cash flow solutions to real estate professionals.
2. Cash Advance Fees
Cash advance companies charge different fees for their advances. Besides the reputation and a credible record of a commission advance provider, you should go work with a company with the lowest fees.
3. Commission Advance Processing Speed
With a commission advance, speed is of the essence. The ideal real estate commission advance company should provide you with a same-day approval. It does not make sense to apply for a cash advance only to wait forever before your request is granted. The importance of a commission advance is to meet urgent cash flow needs. The last thing you want is to receive your cash advance on the same day your real estate commission is released.
4. Look Out for Hidden Fees
Some cash advance companies are notorious for charging exorbitant fees. Before you approach a cash advance provider, let them table all the fees that will be charged to you. Also, establish whether there are administrative fees involved.
5. Are Credit Checks Required?
In most cases when you are applying for a loan, most lenders will perform a credit check on you. However, a real estate commission advance is not a loan. There is, therefore, no reason why a cash advance company should perform a credit inquiry on you. Credit inquiries, especially hard credit checks, can hurt your credit score.
6. Are There Holdbacks?
You will need to establish whether the cash advance company charges holdbacks. These can seriously affect your cash flow. A holdback is calculated as a percentage of your future sales payable to the company until the cash advance and all applicable fees are paid off. This involves authorizing your credit card processing company to pay your cash advance company a certain amount every week.
7. Are There Minimum and/or Maximum Cash Advance Restrictions?
When applying for a real estate cash advance, you do not want to be restricted as to how much funds you can access. It is your money and your business in the first place. You and only you understand your financial needs. In some cases, not getting all the cash you need is as good as getting nothing at all. If a cash advance company cannot meet your cash requirements without putting minimum and maximum restrictions on you, move on and look for a company that will.
8. How Easy Is the Application Process?
The last thing you need is to engage in a lengthy and complicated application process. The process should be simple and straightforward. You should also be able to apply online and complete all the application steps without having to visit the company for a manual application.
If you find yourself in need of a real estate commission advance, there are cash advance companies that will be willing to help. However, make sure that the real estate commission advance company you engage has a reputation for efficient, competitive and credible services.