Best Commission Advance?

[thetwinsmom]

Hello all! This is my first post but I can't seem to find the answer online anywhere.

Getting ready to become appointed and while filling out my paperwork it asked how I would like to be paid: 6, 9 or 12 month Commission advance.

Which one is best?

 

[goillini52]

Hello all! This is my first post but I can't seem to find the answer online anywhere.

Getting ready to become appointed and while filling out my paperwork it asked how I would like to be paid: 6, 9 or 12 month Commission advance.

Which one is best?

That depends on your cash flow.

 

[thetwinsmom]

That depends on your cash flow.

Could you elaborate a little on what you mean by cash flow?

 

[WCMason]

Hello all! This is my first post but I can't seem to find the answer online anywhere. Getting ready to become appointed and while filling out my paperwork it asked how I would like to be paid: 6, 9 or 12 month Commission advance. Which one is best?

Best is no advance. Get paid 1/12 of the annual commission. No interest charged for the advance (read: loan), no chargeback risk. But hard to do unless you have reserves to live on while the commissions accumulate. Next best is 6, 9, then 12 if you can wait for the money. But if 12 month advances keep you in business longer, then they are the best for you, even with interest and chargeback risk.

 

[goillini52]

Could you elaborate a little on what you mean by cash flow?

Money to live on. The smaller the advance, the better. Like WC said, if you need the 12 month advance to keep yourself going, then that's what's best for you.

 

[thetwinsmom]

Best is no advance. Get paid 1/12 of the annual commission. No interest charged for the advance (read: loan), no chargeback risk. But hard to do unless you have reserves to live on while the commissions accumulate. Next best is 6, 9, then 12 if you can wait for the money. But if 12 month advances keep you in business longer, then they are the best for you, even with interest and chargeback risk.

Thanks! Its still a little over my head. I may have to wait until I can speak with someone at the company.

 

[Josh]

If it's interest free (which it usually is with life products) I like 9 months. You're getting money upfront and if at least 75% of your premium stays on the books you'll never have to pay a dollar back. Keeping 75% of your premium on for at least 12 months should be pretty easy as long as you're doing it right.

 

[Thad.Sipple]

As long as it's interest free, 9 months is fine, it's and interest free loan that your client is paying for, if you invest 30% of all money "loaned" to you, live off 40% and save the rest for taxes and business expenses you will be rich very quickly.

 

[Norwayguy]

Thanks! Its still a little over my head. I may have to wait until I can speak with someone at the company.

If your not sure then take the longest advance to begin with and when the money comes in stick a portion in a savings account. Realize it is a loan and some of your business will fall of the books and become a chargeback that comes out of your next commission/advance with the company which can cause problems if you don't have savings. As you build your income go back to the company and ask about lowering the advance in whatever increments they allow until you are mainly as earned. The feeling of freedom knowing no matter what you sell today that you have $x coming in next week, next month etc can not be described. Also you don't have commission breath the customers can almost tell if you make this sale or not does not matter to you it barely changes your income and I swear you get less people that don't trust you.