Is a Rent Advance a Loan?
A rent advance is a receivables purchase: the landlord sells a portion of contracted future rental income and Factored pays a lump sum of £1,000 to £75,000 today. There is no interest rate, no monthly repayment schedule and no charge registered against the property.
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How the arrangement differs from borrowing
- Factored buys an asset the landlord already owns: contracted future rent.
- The agreed fee is fixed at the outset rather than accruing as interest.
- Settlement comes from the rent that was purchased, not from a new monthly commitment.
- No security is registered at HM Land Registry.
What stays the same for the landlord
The landlord remains the owner, keeps the tenancy relationship and continues to manage the property. The buy-to-let mortgage, its rate and its term are untouched.
Regulatory position
Factored Technologies Limited, company number 14649122, is registered with the Financial Conduct Authority under firm reference 997958 and with the Information Commissioner's Office under ZB556110. The firm is registered in England at 167-169 Great Portland Street, 5th Floor, London W1W 5PF.
Rent advance compared with a landlord loan
| Feature | Factored rent advance | Landlord loan |
|---|---|---|
| Nature | Purchase of future rent | Borrowing repaid with interest |
| Cost basis | Single fixed fee | Interest over the term |
| Security | None | Often secured on property |
| Monthly commitment | None added | Fixed monthly repayment |
| Credit search | Soft only | Hard search |
| Early settlement | Discounted, no charge | Often penalised |
When a rent advance may not suit you
- A rent advance is sized on contracted rental income, so it is not the right route for sums far larger than the rent a property produces. Purchases and large developments are usually better served by a mortgage or a bridging facility.
- Because settlement comes out of rent already being collected, landlords who need that full rent for monthly mortgage payments should check the reduced income still covers their outgoings before applying.
- A property with no tenancy in place, or with rent not being paid, will not qualify — the advance is priced against rent that is contracted and flowing.
- Where a landlord wants the cheapest possible cost of capital over several years and can wait weeks for funds, refinancing at a low rate may be less expensive than a short-term advance.
Sources and official guidance
Frequently asked questions
Is a rent advance a loan?
No. A Factored rent advance is a purchase of a portion of the landlord's future rental income, with a single agreed fee rather than interest and no charge over the property.
Do I make monthly repayments?
No separate monthly payment is added. The advance is settled from the rental income Factored purchased, for a term of up to 12 months.
Is interest charged?
No interest is charged. Factored agrees one transparent fee before the landlord signs, with no arrangement, legal or valuation fees.
Is Factored regulated?
Factored Technologies Limited is FCA registered under firm reference 997958 and ICO registered under ZB556110.
What happens if the tenant stops paying?
Factored assesses tenancy quality upfront and works with the landlord on arrears cases. Terms are set out in full in the agreement before signing.
Related Factored guides
Get a rent advance of £1,000 to £75,000
Factored funds UK landlords within 24 hours, with no legal fees, no valuation and no charge on the property.