Business Loans for Lawyers, Law Firms and Attorneys
Updated March 09, 2023
An attorney is a viable career choice that is both rewarding and highly lucrative. The median annual income of an attorney is $131,990, well above the national average. In order to succeed as a lawyer, public appearance and credibility are critical. To maintain a sense of professionalism, you’ll require an attractive and nicely furnished office space, reliable computers and printers, an extensive library of law resources, and a widespread marketing campaign.
Are you an attorney or law practice in need of the best lenders for business loans? With the current economy, it can be next to impossible to get a bank loan. However, by considering other financing options, entrepreneurs and businesses like yours can easily fund their operations. Look no further – find the right lender today!
Best Business Loans & Financing Options for Lawyers & Attorneys
Small Business Administration Loans for Lawyers (SBA Loans)
For beginning or established law firms, the SBA provides a variety of loan options to help you meet your financial needs. Unlike commercial bank loans, SBA loans are partially insured by the government, which enables them to take larger investment risks on entrepreneurs. Due to these elevated financial risks, they are equipped with higher interest rates, but they offer long-term payment plans to ensure easy repayment terms.
With maximum loan amounts of $750,000, and no minimum loan amount, SBA loans are an invaluable funding source no matter your stage of business. You can secure loans to cover all needed startup costs including leasing terms, office supplies, office furniture, electronics, and literature.
Working Capital Loans for Lawyers
Working capital loans provide funds for businesses at all stages of growth and offer maximum flexibility with spending. The money is provided on a short-term basis, with automatic daily payments and repayment terms from six to 15 months.
Qualification is easy, and they can be obtained even without an optimal business credit score. This is a great solution for covering immediate needs and opportunities such as equipment purchases, inventory, and marketing costs.
Private Equity Funding for Lawyers & Attorneys
Private equity firms purchase stock in a company in order to profit off of company growth. For private law practices, this may not be a viable option. However, for expanding law firms, private equity provides a cost-effective, low-interest financing method that enables you to obtain large investment sums that facilitate company growth.
Rather than scrutinizing your credit and financial history, private equity firms are more concerned with your business proposal and projected annual profit margins.
Business Credit Cards for Lawyers & Attorneys
Business credit cards are an ideal way for an attorney to get the money needed to cover routine expenses. They enable you to have cash available at all times to cover recurring business costs, so you are always prepared in the event of a financial emergency. They provide complete flexibility and can be used to cover all recurring expenses of your law firm.
Credit limits are determined based on eligibility. Credit history, annual profits, and projected revenue will be reviewed during the application process.
Line of Credit for Lawyers
Business lines of credit are a great solution for law practices that know they will need access to flexible financing in the future. Because you can access the funds at any time and you only pay interest on what you borrow, lines of credit are commonly used for emergency funding and cash flow stabilization. This option often has higher credit limits making it a better solution than credit cards for larger expenses.
Personal Loan for Lawyers
Not every law firm will qualify for business financing at an affordable rate, and this is especially true for newer firms. When you’re just starting out you likely won’t have amazing business credit or assets to pledge as collateral. So, instead of seeking a business loan, many lawyers opt for personal loans that look at their individual borrowing history and credit. By obtaining a personal loan, they can position themselves as a less risky borrower and qualify for more favorable rates and terms.
Is a Loan Right for Your Law Firm?
When determining whether a loan is right for your law firm, ask yourself how you plan to use the funds to achieve your business goals. All loans should serve a specific purpose and the amount borrowed and repayment structure should align with your objectives. After all, if you do not borrow enough funding to achieve your goals, you won’t be able to realize a proper return on your investment and if you borrow too much you will be stuck paying interest on funds you did not need.
Purchase Real Estate
Owning your business property comes with numerous benefits, so it’s no surprise that many law firms obtain a loan to finance real estate. On top of lowering fixed costs by ensuring that your lease does not increase in price over time, owning real estate also allows law firms to customize their building to their needs and leverage tax advantages. Additionally, if you have extra space to rent your building can double as a second revenue stream. There are numerous real estate financing options so be sure to weigh the pros and cons of each and be sure to understand your investment timeline and purpose for owning the property.
Hire Staff
For successful law firms to grow their business they need to be able to take on a larger number of cases, and once your team is too busy to take on additional work the only way to take on more cases is to hire more staff. However, with longer billing cycles than other industries, it can be difficult to maintain enough working capital to hire and pay new employees. That’s why many law firms obtain financing to support their growth initiatives. By ensuring they have ample working capital to pay their staff and secure additional cases, they can properly support their growth with the correct number of employees.
Cash Flow
When running a business cash flow shortages can put a hamper on growth and your ability to maintain operations. This is especially true for law firms due to the nature of their revenue streams. Business loans can help avoid a true cash flow crisis by ensuring that you have enough working capital to pay your staff, win new cases, and ultimately keep things running smoothly.
How to Grow Your Law Practice
Expanding an attorney or law practice with business financing can be a great way to take your practice to the next level. Here are some steps you can take to expand your practice with business financing:
- Develop a growth plan: Before applying for business financing for your law firm, develop a growth plan that outlines your goals and objectives. Consider factors such as target markets, new practice areas, and staff expansion.
- Evaluate financing options: Evaluate financing options, such as business loans or lines of credit, and compare interest rates, repayment terms, and eligibility requirements. Choose a financing option that aligns with your growth plan and budget.
- Invest in technology: Technology can help streamline your practice and improve efficiency. Consider investing in software, hardware, or automation tools that can save time and improve client experience.
- Expand your marketing efforts: Increase your marketing efforts to attract new clients and increase revenue. Consider investing in advertising, social media, or email marketing campaigns to reach a wider audience.
- Hire additional staff: Hiring additional staff can help you take on more clients and expand your practice. Consider hiring legal assistants, paralegals, or additional attorneys to help with workload.
- Offer new services: Consider offering new services or practice areas to attract new clients and increase revenue. For example, you can expand into areas such as intellectual property, immigration law, or employment law.
- Renovate or expand office space: If you are running out of space, consider renovating or expanding your office space to accommodate a growing staff and client base.
In order to succeed as an attorney, startup capital is necessary to secure office space, launch a marketing campaign, and establish a resource library. With the help of government-backed loans, working capital loans, private equity, and credit cards, there are innumerable attorney loan options to ensure you always have the financing you need. For modern business funding solutions, contact Credibly!
Author Bio
Jeffrey Bumbales
Director, Marketing & Strategic Partnerships
