Real estate can be an excellent career path, but working on commission often leads to unstable income, especially when you’re first establishing your business. Commission advances are a great option for real estate agents to cover their business and living expenses between closings without the downsides of other types of traditional loans.

What is a commission advance?

Commission advances allow real estate agents to sell a portion of an upcoming commission for a small fee so they can access that money before the closing. Depending on the commission advance provider, you’ll be able to access up to 80% of the commission. These transactions offer a number of advantages over traditional bank loans, lines of credit or credit cards. Since you’re essentially just getting early access to your own money rather than borrowing the bank’s money, the application process is much simpler and the fees involved are much lower than they are with other funding options.

What are the benefits of commission advances?

In most cases, commission advances are a much better choice for real estate agents than other lines of credit. These are some of the benefits.

1. Minimal Cost

Commission advances for real estate agents usually don’t require an application fee, unlike traditional bank loans. You can also avoid interest and exit fees that might apply with other loan products. Generally, the only fee required for a commission advance is a small percentage of the advanced amount. This means you can access your commission early without losing a significant portion of your earnings to fees and interest.

2. Almost Always Approved

Commission advances are pretty much always approved, even if you have a low credit score. Since they are based on the upcoming commission rather than your personal or business credit history, there aren’t as many factors that go into the approval process. This means there isn’t as much potential for points in your financial history that could cause a lender concern to show up and lead to the denial of a loan application.

3. Fast Process

Commission advances can often be approved within a day or two. This is one of the many benefits of the straightforward application process. In contrast, bank loans often take several weeks for processing and approval while the bank reviews a large amount of paperwork and performs a detailed credit check. If you’re trying to cover your expenses between closings, waiting weeks for a loan to be approved can be impractical. A commission advance that you receive quickly can save you from having to delay other payments.

4. Flexible Purpose

Bank loans and lines of credit are usually only approved for a specific purpose, such as a car purchase or business funding. A commission advance, on the other hand, can be used however you prefer. Your commission advance is just a way to receive your earnings sooner, so you can use the money for personal expenses, put it back into your business, or do any combination of the two.

5. No Impact on Credit

Commission advances don’t require hard inquiries into your credit history, so they don’t have any impact on your credit score. Since they aren’t considered debts, they also don’t show up on your credit report as a new account or increased loan balance. This helps you avoid the negative impact of a recent hard inquiry or a lower average age of accounts.

For many real estate agents, commission advances are a much better option than other sources of credit. If a commission advance sounds like the right funding source for you, contact Commission Express to increase your cash flow today.

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