Fee Block Finance
Finance to acquire a fee block
without draining your working capital.
For many practices, buying a block of recurring fees is the fastest and most predictable way to grow. The question is how to pay for it without leaving the firm short for payroll, tax and the January peak.
- Confidential, no-obligation discussion
- Whole of market access
- We are a broker, not a lender
“An excellent company that provided funding options quickly.”
- Lender searchWhole of marketNot tied to any one lender
- Instant QuotesNo credit searchSee indicative quotes first
- Who we helpProfessional practicesSole traders, partnerships, LLPs and companies
- Our roleSpecialist brokerWe approach suitable lenders for you
Quick answer
What is fee block finance?
Fee block finance is funding to buy a block of recurring fees, usually an accountancy client book, from another practice. It lets the buyer pay the seller without draining the working capital needed for payroll, tax and busy seasons. It can also cover goodwill, deferred consideration or a succession deal. We search the market for lenders who fund fee income acquisitions.
The pressure
Growth you can buy. Cash you still need.
Organic growth in a professional practice is slow. A fee block arrives with clients, recurring income and often staff who know the work. That is why so many firms grow by acquisition.
But fee blocks are usually priced as a multiple of recurring fees, and the vendor typically wants a meaningful share on completion. Paying from reserves can leave the practice exposed at exactly the wrong time: just before a busy season, or while the new clients are still being integrated.
Finance lets the acquired income help pay for itself.
What can be financed
The specific uses.
“Simon was excellent throughout the process.”
- 01 Whole fee-block acquisitions Buying a defined book of clients and the recurring fees attached to them.
- 02 Deferred consideration Funding the later instalments due to a vendor, or replacing a deferred structure with a single completion payment where that improves the deal.
- 03 Vendor-funded structures Where the seller is willing to leave part of the price in the business, finance can cover the balance so the deal still completes on time.
- 04 Goodwill acquisition Funding the goodwill element of a practice purchase, where there may be few tangible assets to lend against.
- 05 Partner succession A retiring partner’s client base passing to a remaining partner or incoming buyer.
- 06 Top-up funding Additional capital after completion for integration, systems, recruitment or a second acquisition.
- 07 Refinancing existing acquisition debt Restructuring borrowing taken on for earlier acquisitions, often to consolidate or release capacity for the next one.
How it’s often structured
Structured around the income you’re buying.
Every acquisition is different, but most fee-block funding involves some combination of:
- A term loan repaid over a period that the acquired fees can reasonably support.
- Vendor deferred consideration with part of the price paid over time and sometimes linked to client retention.
- Clawback or retention adjustments where the price flexes if clients don’t transfer.
- The buyer’s own contribution which lenders will usually want to see.
The right mix depends on the size of the block, how the fees are recurring, the retention terms and the strength of the acquiring practice. Part of our role is working out which structure a lender is likely to support before you commit to heads of terms.
How we help
Not one lender. The right one for the deal.
Fee-block acquisitions are funded by high-street banks, specialist professions lenders, challenger banks and alternative funders, and each looks at recurring fees, retention terms and the buyer’s contribution differently.
We aren’t tied to any of them, and we search the whole of the market. We assess the acquisition, work out how it should be structured and presented, search the market for lenders with an appetite for this kind of deal, and manage the process through to completion.
Buying a fee block is often one step in a wider plan. Our page on accountancy practice loans covers the other funding accountancy firms commonly need, from partner buy-ins and succession to tax bills and the January cash-flow gap.
- Whole of market accessHigh street banks, specialist and private lenders.
- Specialist understandingLenders who understand how practices earn and grow.
- Your case, properly presentedStructured and put to lenders suited to it.
- With you to completionFrom the first conversation to funds arriving.
What lenders will want to see
What lenders will look at.
- The acquiring practice’s accounts and current borrowing
- The fee block: recurring fee income, client numbers and concentration, service mix
- The agreed price, how it was calculated, and any deferred or retention terms
- How the clients will be transferred and serviced
- The buyer’s own contribution
- For larger deals, a short forecast showing the combined practice
We help you pull this together and present it in the way lenders expect, so the first conversation with a lender is a serious one.
Who this is for
- AccountantsThe most common fee-block buyers. Also see the January cash-flow and succession sections of the accountants page.
- Financial advisers and insurance brokersRecurring-income book purchases.
- SolicitorsAcquiring a retiring practitioner’s practice or a practice area.
- Other professional firmsBuying recurring client relationships.
Questions
What firms usually ask.
Can a fee-block purchase be 100% financed?
Lenders usually expect some contribution from the buyer or the vendor. Where deferred consideration or vendor finance is part of the deal, the amount you need on day one can be much lower than the headline price.
Does the fee block itself count as security?
A fee block is income rather than a physical asset. Some lenders will lend against the combined practice’s cash flow, sometimes with personal guarantees. We’ll explain what’s likely to be asked before you apply.
Can finance cover deferred consideration I’ve already agreed?
Often, yes. Refinancing future instalments into a single facility is one of the options we can search the market for.
How early should we talk to you?
Before heads of terms if you can. The funding structure can affect what you offer the vendor.
How does the vendor’s tax position affect a fee block deal?
How and when the price is paid can matter to a retiring accountant, and many take advice on Business Asset Disposal Relief before agreeing terms. That can shape how much is paid at completion and how much is deferred, which in turn affects the funding you need.
Is fee block finance the same as an FCA fee block?
No. Fee block finance is funding to buy a block of recurring client fees, usually an accountancy client book. An FCA fee block is how the Financial Conduct Authority groups regulated firms that carry on similar activities to work out their annual fees, which are based on each firm’s tariff data. The FCA explains how it calculates annual fees, and a regulated firm can spread large bills with working capital.
Success stories
Fee Block Purchases in practice.
In our clients’ words
“I manage the VFO department at Walji & Co Accountants and contacted Simon on behalf of a client whose unique situation made him appear unsuitable for finance. I had a chat with Simon and he got straight onto the case and found a fantastic finance deal which allows my client to take his business to the next level. Finance that appeared unattainable was sorted within a short period of time.”
Knowledge Hub
Read the guides.
Fee Block Finance: How Accountancy and Advisory Practices Fund Buying a Client Book
A practical guide to financing a fee block purchase: how deals are priced and structured, what lenders look at, and how to protect cash flow while the clients bed in.
Read the guide →How to Start an Accountancy Practice: Regulation, Costs and Funding
The regulatory steps, systems and cash flow planning involved in setting up an accountancy practice, and the choice between building a client base and buying a fee block.
Read the guide →Selling an Accountancy Practice: Valuation, Clients and Buyer Finance
A guide for practice owners to selling an accountancy practice or a block of fees: valuation, retention and deferred payments, clients and confidentiality, your team, tax and how the buyer’s finance shapes the sale.
Read the guide →Let's talk
Buying a fee block?
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