Australia’s Real Estate industry embraces cash flow solution
Lack of cash flow has long been one of the biggest business hazards for Real Estate Agents in Australia. Even the best agents are prone to intermittent cash flow because of the very nature of the business. A 4 week wait for commissions can be difficult to manage in the good times, and one bad month has spelled the end for more than a few solid businesses in this country.
The good news is that our Real Estate industry today is embracing change and tackling the problem with an innovative yet remarkably simple solution – Cash Flow Financing. The system is easily instigated, cost-efficient and carries peripheral benefits that are hard to ignore.
So what’s the difference between an Agent holding their breath for 4 weeks, or having commissions paid within hours of the sale? On completion of a sale, an Agent exchanges documentation with the Cash Flow Financier, and up to 100% of commissions owing are paid within as little as 4 hours. The process is not a loan as such, so the Real Estate Agent’s credit rating is unaffected. Fees are based on a modest amount per thousand dollars per day, plus a set administration fee. There are no hidden clauses, contracts, liens or red tape.
Cash Flow Financing represents a Real Estate Industry adaptation of ‘factoring,’ and it is proving itself every day in Australia. The relatively small cost is seen as more than worthwhile for most Agents, and as fees are also fully tax deductible, the value is pretty hard to argue with. Tens of millions of dollars are advanced each year in Australia by companies such as PaidOnExchange.com.au, with the numbers growing steadily all the time.
For those who’ve lived for years on the 4 to 6 week wait, Cash Flow Financing is being seen as a light at the end of the tunnel. Agents new to the game are simply asking why it hasn’t been this way since the start. Industry uptake of the system certainly indicates that in this country at least, it’s a service that’s here to stay.
