Managing Cash Flow During the Startup Phase
"Activity today may not turn into income for weeks or even months later. That's why understanding your runway matters more than almost anything else in your first year."
Understanding the real lag
- Lender accreditation: 30 to 90 days before you can write with a particular lender
- Settlement: typically around 30 days after submission
- Aggregator payment: often not until end of the month after settlement
- Trail commission: a further one to two months to begin
A deal submitted today might not turn into commission for four to six months. If you're planning to pay yourself $100,000 a year, aim for six to twelve months of buffer, roughly $50,000 to $100,000.
Know your real numbers
Most lenders pay around 0.65% upfront on the drawn amount and 0.15% trailing. On a $1 million settlement, that's roughly $6,500 upfront, minus your brokerage split, minus GST, before your own expenses and tax. Commissions can be clawed back 100% within 12 months and 50% between 12–24 months, so never spend an upfront the moment it lands.
Plan your cash flow before you need to, not after. Understanding your numbers early is what lets you keep going through the slow months instead of being forced out by them.
