Accountancy Practice Loans & Fee Block Finance

Fee blocks are usually priced by reference to the recurring fees they generate, and part of the price is often deferred and adjusted for the clients actually retained. That shapes the funding: a term loan can cover the completion payment, deferred consideration spreads the rest, and the buyer’s own contribution shows a lender that the risk is shared.

Lenders look at the quality of the fees being bought, the strength of the acquiring practice and whether the combined firm can service the debt. Fee block finance sets out what can be funded, practice acquisition finance covers buying a whole firm with its team and premises, and our fee block finance guide explains pricing, retention clauses and due diligence. ICAEW also publishes a helpsheet on buying and selling fees covering the ethical and confidentiality points.

An incoming partner or member usually funds their capital contribution, and sometimes a share of goodwill, with a partner capital loan taken in their own name. Lenders look at the firm’s accounts, the partnership or LLP agreement and the individual’s own position, and the loan is normally repaid from the new partner’s profit share.

Partner buy-in finance explains the options, and our partner capital loans guide covers the detail. Where a partner is retiring rather than joining, succession finance and our guide to funding partner retirement and succession cover the other side of the transaction.

Yes. Accountants spend the winter on their clients’ tax, but the practice has its own bills too. Self-assessment payments on account are due by 31 January and 31 July, each usually half of the previous year’s tax, and corporation tax is due 9 months and 1 day after the end of the accounting period for most companies, alongside the VAT quarters.

Tax and VAT funding spreads a bill over months rather than paying it from the office account in one go, and partners’ tax funding covers the personal bills of partners and members. Our guide to funding corporation tax, VAT and partners’ tax compares borrowing with an HMRC payment plan.

Much of the self-assessment work is done in the months before the 31 January deadline, while fees are billed and collected afterwards. A practice can be at its busiest when cash is tightest, with salaries, overtime and software costs all running ahead of the income.

Seasonal working capital, a revolving facility or a short-term loan can bridge that gap, and many smaller needs can be met with an unsecured practice loan. Our guide to reducing lock-up covers the other half of the answer: bringing the cash in sooner.

• Recent accounts, management figures and current borrowing
• Recurring fee income, client retention and client concentration
• The mix of compliance and advisory work
• For an acquisition, the agreed price, deferred and retention terms and the buyer’s own contribution
• For a buy-in, the partnership or LLP agreement and the individual’s position
• A cash-flow forecast showing how the borrowing will be repaid

Our guide to what lenders look for in a practice finance application explains how to prepare, and if you are setting up on your own, read our guide to starting an accountancy practice.

With working capital or an unsecured practice loan for the extra staff time and training, and software finance for new systems, repaid as fees for quarterly work come through. Sole traders and landlords with qualifying income over £50,000 in 2024 to 2025 should have started on 6 April 2026, and the threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028, so the number of clients sending quarterly updates grows each year. Professional Practice Loans, a specialist whole-of-market broker, finds lenders that understand the timing of accountancy fees.

• Client review. HMRC’s agent toolkit asks practices to identify which clients must start, which are exempt and which have another agent.
• Software. Checking that each client’s software is compatible, or moving clients onto products the practice supports.
• Workload. Each self employed business sends its own quarterly update, so clients with several businesses mean more work.
• Fees. Repricing engagement letters for quarterly work, and how long the new fees take to be billed and paid.

GOV.UK explains when clients need to sign up and HMRC’s agent toolkit covers planning. See IT and software finance and working capital, or get instant quotes to compare options.

Yes, through a management buyout, where senior managers or junior partners form a new company or LLP to buy the practice. It is usually funded with the team’s own money, a term loan based on the recurring fees and deferred consideration agreed with the retiring owner, who is often paid partly over several years. Lenders generally like a buying team that already knows the clients, but they normally look hard at whether relationships held by the owner will transfer. Professional Practice Loans, a specialist whole-of-market broker, structures the deal and approaches lenders that fund practice successions.

• The team. Who is buying, their roles and how much each person puts in.
• The fees. Recurring compliance fees, client concentration and how many clients deal mainly with the retiring owner.
• The handover. How long the owner stays on, and any consultancy agreement during the transition.
• Deferred terms. How later payments are tied to client retention, and how they rank behind the loan.

See succession finance, practice acquisition finance and partner buy-out finance, or get instant quotes for the purchase.