Over 6 million houses were sold in the United States in 2017, with approximately 90% of sellers enlisting the assistance of a real estate agent. Currently, over 2 million Americans hold current real estate licences, while the National Association of Realtors has over 1.3 million members.

Small business loans for realtors are, as the name implies, financing solutions designed for real estate agents to employ to meet expenses associated to the operation of their business. Are you looking for a loan to establish your own real estate business? Are you on a quest to better your real estate marketing strategy? Need new technology to gain a better handle on tracking your company’s performance?

There are numerous methods to employ finance for real estate brokers, which is why there are numerous types of small business loans for realtors.

Real estate brokers might employ small business loans for a variety of reasons. Finally, the ideal funding option will be determined by a number of factors, including what you need the business loans for and how qualified you are as a borrower in the eyes of the lender.

1. Best Realtor Business Loan for Emergency Backup Funds: Business Line of Credit

Unforeseeable expenses will inevitably arise throughout the operation of a real estate business, that’s a fact. Whenever you need extra funds to cover surprise costs, a business line of credit will come in handy. They essentially work the way a credit card does, where you’ll have access to money on an as-needed basis.

Additionally, business lines of credit are typically revolving, which means you’ll be able to withdraw funds, repay them, and then use them again indefinitely. Be sure to compare term loans and lines of credit before making your decision.

2. Best Realtor Business Loan for Big Expenses: Unsecured Business Loan

The ‘unsecured’ part of this type of funding for real estate agents means that you won’t be required to provide valuable assets as collateral. That significantly reduces the risk that you the borrower take on, and shifts that risk to the lender (since they won’t be able to repossess your assets if you fail to repay).

Read Also: How to Start a Small Business Loan Company?

On the other hand, the interest rates for unsecured business loans are generally higher than they are with other small business loans for realtors. And since getting approved for an unsecured business loan is somewhat more difficult than other loan types, if you do qualify it will make it that much easier to qualify for those other types of loans.

3. Best Realtor Business Loan for Slow-Paying Clients: Invoice Factoring

For real estate agents, slow-paying clients can become a serious issue that negatively impacts their cash flow. As part of the strategy for dealing with unpaid invoices, consider invoice factoring. Instead of waiting around for those payments to come in, a third-party lender can pay you a lump sum loan of up to 80% of the unpaid invoices value and then collect those payments on your behalf.

Qualifying for this type of small business loan for realtors is quite easy, as the lender will consider your clients’ creditworthiness, not yours. In exchange for their services, the loan provider will keep a percentage of the invoices (1-4% generally) as payment.

4. Best Realtor Business Loan for General Purposes: SBA 7(a) Loan

SBA loans for real estate agents (whether they be SBA 7(a) loans or any other variant) are not technically loans. What the SBA (United States Small Business Administration) does is guarantee up to 85% of the loan amount so that lenders take on less of a risk and therefore are more likely to approve small businesses that would otherwise have a very difficult time qualifying for funding.

More specifically, an SBA 7(a) loan can be used for essentially any business-related expense, from stocking up on office supplies to refinancing existing debt and anything in between. As far as small business loans for realtors go, SBA loans for real estate agents are among the most flexible and most accessible (though not the fastest business loans, as it will take at least 2 weeks to receive funds). 

5. Best Realtor Business Loan for Office Equipment: Equipment Financing

In order to keep your real estate agency working up-to-par in this age of digital technology, you’ll need to have modern computers and smartphones to stay in touch with clients (and portable chargers to keep them juiced!), a drone to provide potential buyers with a virtual tour, a security system to maintain an office space safe from intruders, and so on.

Oftentimes those tools and machines will cost a pretty penny, and that’s where equipment financing comes in as one of the best types of funding for real estate agents. The best part is that the equipment will serve as its own collateral, meaning if you fail to repay the loan you won’t be at risk of losing the assets that you already possessed.

The possibilities for using small business loans for real estate brokers are only limited by the estate agent’s inventiveness. The way one realtor uses a small business loan may be completely different from how another realtor uses a boost to their funds, depending on where they are located, what their competitors is up to, which sections of the agency need upgrading, and so on.

We’ve included a few of the more common uses for small business loans for realtors below.

• Scale up an existing business
• Purchase new or used equipment
• Open an agency
• Fund a marketing campaign (including social media marketing)
• Boost cash flow in the off-season
• Stock up on office inventory
• Recover from a business disaster
• Renovate the office
• Cover unpaid client invoices
• Finance a business vehicle