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Residual income, or recurring income, continues to be generated after the initial work is done. Rather than linear income where you receive one lump sum and that’s it, residual income is a continued source of income that requires little or no work once the income has been initiated. Residual income can come in the form of sales from a published book, a movie, or even a rental property. In any of these cases, an initial lump sum of money would have been invested to complete the project, or purchase the property. Once the initial payments have been made, any sales or rentals of that property will generate income for the owner.

For loan brokers, residual income is attainable through accounts receivable financing or factoring. Businesses receive income as payments are received from their customers. Most businesses use a 30, 60 or 90 day payment turnaround for these types of financial transactions. Too often, the daily expenses related to the business like, payroll, office utilities and supplies exceed the expected income from customer payments. Many businesses can’t wait 60 or 90 days to receive payment and need to have ways to obtain the income needed to pay business expenses. This is when business owners rely on lenders to help them obtain the funding they need.

Loan brokers can generate residual income by funding accounts receivable or factoring loans to qualified businesses. Commission is typically 10-15% of the monthly fees that the lender receives. Monthly commission on an accounts receivable loan can range from $100 to $1,500 a month. These payments can vary based on the amount financed to the business in the previous month and on the amount of the fees that the lender is collecting. This amount may not seem like a lot, but considering the fact that the work itself is only done once, this monthly amount becomes more tolerable. Also, considering the amount of businesses that can benefit greatly from this type of funding, the possibilities are truly endless.

Loan brokers can earn an excellent income through residual payments alone with little to no effort after the initial deal is closed. By offering business owners funding options like accounts receivable financing and factoring loans, business loan brokers can create residual income month after month and free up time for other aspects of the business like marketing and networking.