LJ Hooker Surry Hills office relied on advances to help cash flow
The LJ Hooker Surry Hills office now under Fair Trading NSW investigation was a client of PaidOnExchange, the real estate industry company that turns pending estate agent sales commissions into cash.
Given the size of its advance, PaidOnExchange lodged a charge over the estate agency company, CBD Commercial, in July.
The office continues to trade under Fair Trading supervision. Its licensee has departed.
Since established in 2005, PaidOnExchange has marketed itself as a highly innovative industry option for cash flow funding situations without the red tape that banks traditionally demanded.
Its marketing suggests the typical six-week starvation period was able to be replaced, with estate agencies able to get a percentage of their pending commissions paid within four hours.
More than 1,000 agencies across Australia have taken up the company’s services since 2005.
“The essence of cash flow funding is simple; it represents the sale of invoices for completed services, in this case, commissions owing, to a third party, at a discount on the face value,” the website suggests.
“Having commissions owing converted to cash within four hours is a benefit that can’t be overstated,” it says.
The PaidOnExchange website suggests real estate can be a fickle business.
“All too often we witness a team performing at its peak for months on end, only to see it crash into obscurity seemingly overnight.
“Cash flow – or lack of it – is the killer.
“It’s caused the ruin of far too many real estate offices that, in every other aspect, had great prospects and a clean bill of health.
“Companies can, and do, simply starve to death while they wait for commissions to come in.
“At PaidOnExchange.com.au we recognised the real estate industry’s need for effective short-term financing, and done something about it.
“The solution is called PaidOnExchange.com.au, and it turns commissions owing into cash within 4 hours.
“With none of the red tape that banks traditionally demand, the six-week starvation period has finally been consigned to history.”
Between $500,000 and $1 million is unaccounted for at the agency.
