Have you started your own real estate business?
If so, you may be concerned about how to get small business loans for realtors to have enough working capital to jumpstart the process. Most real estate firms operate with commission-based payment plans, so they have irregular business income. This uncertainty can make it difficult to establish or expand your company.
However, you don’t need to wait around for your next sale to finalize to begin working towards your business goals. Consider startup real estate business loans to acquire working cash when you need it most, no matter when your next check is coming in.
To help you determine if small business loans for real estate agents are right for you, we’ve created a quick guide detailing your options.
Can Realtors Get Small Business Loans?
The real estate industry has distinct business practices. Much of your income probably comes from referrals from previous clients, and often, you are not paid until a deal is complete.
Due to the industry’s unconventional format, some business owners find it challenging to obtain loans for real estate agents from traditional lenders. So, instead, many seek out personal loans for real estate agents. Some lending companies, like L3 Funding, are familiar with the real estate industry and understand the benefits of supporting a viable business by providing funding for real estate agents.
Business Loans for Realtors
In order to choose the most appropriate loans for realtors, you’ll need to consider your business needs. Do you require:
- Operating capital to pay your employees
- A one-time payment to start a second location for your real estate company
- Money to buy office supplies or equipment
Your answers to these questions will help you choose which small business realtors’ loan is best for you. The most common options include:
Business Line of Credit
A real estate business line of credit may be the ideal financing choice for your firm if you need a backup reserve to fund a range of initiatives. A line of credit can help you smooth out cash flow gaps, acquire goods, start a small business marketing effort, or cover payroll.
Banks can provide some of the most considerable loan amounts with the lowest interest rates, but many businesses won’t qualify through traditional banks. On the other hand, online lenders have far fewer qualification requirements, but their interest rates are frequently higher.
If you’re accepted for a line of credit, you’ll have to pay back the money you borrowed, plus interest. Your line of credit will be replenished once you’ve paid off your debt, allowing you to continue withdrawing cash for as long as your draw period lasts.
Traditional term loans are ideal for funding specific projects with established budgets. Unlike a line of credit, you’ll be responsible for repaying the entire lump-sum amount, plus interest, according to your repayment plan.
These loans, however, are not simple to obtain. You’ll need a good credit score, steady revenue, years of expertise, a business plan, and enough collateral to qualify for a term loan from your bank.
Fortunately, you can find several trustworthy online lenders, including L3 Funding, to secure small business loans for realtors. These lenders can help you get the cash you need to continue operating — even if you’ve been rejected by a bank.
Small Business Administration Loan
Many real estate brokers may discover that the SBA 7(a) program, the most widely used Small Business Administration loan program, is the best fit for their needs. Realtors turn to SBA 7(a) loans because they are incredibly flexible and suited for various purposes, including working capital, business equipment, and commercial real estate.
Real estate brokers can use SBA 7(a) loans for:
- Purchasing or maintaining a car: Because real estate agents frequently travel to meet with customers and show properties, an SBA 7(a) loan might be an excellent method to help you purchase or repair a business vehicle.
- Refinancing business debt: If you took out a small business loan to start your company and are suffering from high interest rates or fees, you may be eligible to refinance with an SBA 7(a) loan.
- Expanding a brokerage: SBA 7(a) loans are a fantastic option if you need to recruit more staff or increase your marketing activities.
Business Credit Card
With a business credit card, you can buy all the extras your real estate firm needs to stay afloat. Plus, because business credit cards often have higher credit limits than consumer cards, you may use your card as a small loan with the benefits and incentives that a company loan won’t provide.
Business credit cards are also far more accessible to apply for and qualify for than small business loans for realtors.
How Realtors Can Get Small Business Loans
The best way to secure small business loans for realtors is to work with a loan specialist to pinpoint the type of loan that will work best for your real estate business.