Liquid Advances - Returns and Capital Cost Calculator

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2	Commission Advance Returns & Cost of Capital
3	This calculator is a tool to estimate the potential for you to support your Agents with commission advances, opening a new income stream. Please note we cannot confirm or validate any data or outcomes.
4	If you are holding onto cash you would review the projections on the left for the self funded model. If you would rather use a line of credit you're going to review the projections on the right side.
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6		Instructions:	1	Make a copy of this worksheet via the File menu
7			2	Add your own data to all GREEN fields
8			3	The Annual Interest Rate of your Line of Credit is used to show the comparison between self funding and funding with credit
9			4	Update the "Risk of Default" Tab to estimate potential defaults (Optional)
10			5	Compare the rate you're charging your agents to market rates on the "Competative Rates" Tab
11			6	View your expected returns!
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13	Average Advance Inputs			Volume Projection Inputs
14	Average Commissions Earned	$5,000		Number of Agents on the Team	60
15	Max % of Commissions allowed as an Advance	70%		Deals per Agent per Month	1
16	Average Commissions Advanced	$3,500		Percentage of Agents Requesting Advances (Adoption Rate)	50%
17	Average days from Advance to close	45		Monthly Advances (Deals per Agent x Adoption Rate)	30
18	Daily Rate as $0.00 per $1,000 Advanced per day. Eg $1.25	$1.00
19	Fees Charged per Average Advance	$157.50		Cost of Capital and Risk Inputs
20				Annual Interest Rate of your Line of Credit	18%
21				Risk of unpayment (Adjust this on "Risk of Defult" tab)	1.16%
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24	SELF FUNDED MODEL			CREDIT LINE FUNDED MODEL
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26	Income Projections			Income Projections
27	Monthly Income Pending	$4,725.00		Monthly Income Pending	$4,725.00
28	Monthly Cost of Defaults (Risk * Avg Advance amount + Interest)	$42.28		Monthly Cost of Defaults (Risk * Avg Advance amount + Interest)	$42.28
29	Net Monthly Revenue (Income / loan adjusted monthly)	$3,121.81		Net Monthly Revenue (Income / loan adjusted monthly)	$3,121.81
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31	Annual Gross Revenue	$37,461.75		Annual Revenue	$37,461.75
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34	Capital Required			Capital Borrowing Requirements
35	Volume advanced (per month)	$105,000.00		Volume advanced (per month)	$105,000.00
36	Capital Pool Required (to cover days outstanding)	$157,500.00		Capital Pool Required (to cover days outstanding)	$157,500.00
37				Monthly Cost of Borrowing for Brokerage	$2,362.50
38				Annual Cost of Borrowing	$28,350.00
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40	Annual Net Profit	$37,461.75		Net Profit	$9,111.75
41	Annual Return on Capital (if you're self funding)	23.79%
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45	Per Advance Breakdown			Per Advance Breakdown
46	Fees Charged to the Agent per Average Advance	$157.50		Fees Charged to the Agent per Average Advance	$157.50
47	Capital Required to fund Average Advance	$3,500		Brokerage Cost of Borrowing per Advance	$77.63
48	Return on Capital per Advance	4.50%		Brokerage Profit per Advance	$79.87
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