It is one thing to read that an advance gets you paid early. It is another to see the actual dollars. So let us take a normal commercial leasing deal and run it all the way through, from the commission you earned to the cash that lands in your account, with the fee included and nothing hidden. The numbers below are illustrative, but the structure is exactly how it works.
You represented a tenant on an office lease and earned an $80,000 commission. The agreement pays in the usual two pieces. Half is due on lease execution and half on occupancy.
You have done all the work. The lease is signed, the tenant is committed. But $40,000 you have genuinely earned is going to sit untouchable for half a year while contractors finish the space. That is the exact situation an advance is built for.
You have two options on that second $40,000. Wait six months and collect the full amount, or advance it now, pay a fee for the time it is outstanding, and put the cash to work today. The whole decision comes down to comparing the cost of the advance against the value of having the money six months sooner.
Take the stuck $40,000 and advance it. Using a flat, time-based fee of 3 1/3 percent per month, here is how it works out over the six month wait.
So the trade is this. You can have roughly $32,000 today, or $40,000 in six months. The fee for moving that money forward six months is about $8,000. Whether that is a good deal depends entirely on what those six months and that cash are worth to you.
Note on structure: in practice a portion of the advance is held back and reconciled when the deal pays out, then returned to you net of the fee, which is covered in the guide on how much you can advance. The figures here show the net economics so the decision is easy to read.
The $8,000 fee stops looking like a cost and starts looking like a tool the moment the money does real work. A few common cases where six months early is worth far more than the fee:
Because the fee is time-based, a shorter wait costs less in a straight line. If occupancy lands in three months instead of six, you pay for three months, not six.
This is why you only pay for the time you actually use. If the build-out finishes early, your cost drops with it.
An advance is not free, so it is not always right. If occupancy is only a few weeks out, the fee buys you very little time and waiting is cheaper. If you are sitting on comfortable reserves and have no pressing use for the cash, there is no reason to pay to accelerate it. The honest test is whether the money does more for you now than the fee costs. When it does, you advance. When it does not, you wait.
Yes. In this example you already collected the execution half, so you only advance the $40,000 tied to occupancy. Advancing just the portion that is frozen keeps the fee down.
You can advance less than the full stuck amount. Since the fee is a percentage of what you advance, taking only what you need lowers the cost. See the guide on how much you can advance.
With a flat time-based structure you make no monthly payments. The fee is settled when the deal pays out, against the portion held back for reconciliation.
Use the calculator on the main advance guide to plug in your commission and expected payout date, or request a quote for the exact figures on your deal.
This guide is general information for commercial real estate brokers and is not financial, tax, or legal advice. All figures are rounded illustrations, not a quote. Your actual terms are confirmed by Cash For Commish before funding.
