Definition of Factoring
Factoring is a financial transaction whereby a business sells its accounts receivable (i.e. Real Estate Commission) to a third party (called a factor = Commission2Cash) at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three distinct ways:
The emphasis is on the value of the receivables (the actual real estate transaction and the likelihood of getting the future commission), not the agent's personal credit worthiness.
Secondly, factoring is not a loan. It is the purchase of a financial asset in the form of receivables (i.e. real estate commission).
Finally, a bank loan involves two parties whereas factoring involves three:
- Real estate agent,
- Broker or escrow company, and
You've earned it. Why wait to get paid!
Tony is a KellerWilliams® agent and he came to us looking for a commission advance on his transaction which was set to close in 45 days.
The inspection contingency had been satisfied. The buyers had an FHA loan with 5% down and had put a $10,000 earnest deposit down on their $500,000 purchase. Tony was a first time client with ... MORE