Finance to Start or Buy Into a Practice
From associate
to owner.
Most professionals become owners by buying into a practice, buying one outright, or setting up on their own. Each route needs funding at different points, and lenders view each one differently.
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- Who we helpProfessional practicesSole traders, partnerships, LLPs and companies
- Our roleSpecialist brokerWe approach suitable lenders for you
The picture
The first step into ownership is the one lenders scrutinise most.
Becoming an owner changes how a lender sees you. As an associate, employee or salaried partner you are judged on your income. As an owner you are judged on the practice: its fee income, its costs, its people and your ability to run it.
The three routes carry very different risk. Buying into an established partnership or LLP means joining a business with a track record, so lenders can look at years of accounts. Buying a practice outright gives you control, but you take on the whole of the goodwill and the transition. Starting from scratch has no trading history at all, which narrows the market considerably and puts more weight on your own experience, a credible business plan and your personal contribution. Our guides to starting a law firm and starting an accountancy practice walk through the regulatory steps and first-year costs.
The funding also comes in stages. The price of ownership is only the first cost. Equipment, fit-out and the cash to carry payroll while income settles all follow, and it is far easier to plan them together than to go back to a lender a few months after completion.
The journey, step by step
- 1
Choose your route
Buying into the practice you work in, buying an established practice, or starting from scratch. Lenders view each differently, and the route shapes how much you will need to contribute and what security may be asked for.
- 2
Fund the ownership
Goodwill, a capital contribution to a partnership or LLP, or the price of the practice itself. Partner capital is usually borrowed by the individual, while an acquisition is usually borrowed by the buying company or practice.
- 3
Equip and fit out
New owners often want to modernise equipment and rooms early. Asset finance can spread the cost over the working life of the equipment rather than taking it from the cash you need to trade.
- 4
Keep cash for the first year
Working capital to cover payroll and costs while income settles under your ownership, including the first PII renewal, VAT quarter or tax bill that falls to you.
Things to consider
Worth settling before you commit.
Your own contribution
Most lenders expect a first-time owner to put something in. Knowing what you can contribute, and where it comes from, is the starting point for every conversation.
The agreement you are signing
A partnership or LLP agreement, a share purchase or an asset purchase each sets out what you are buying and what happens when you leave. Lenders read them, and so should your solicitor.
Regulatory approvals
Many professions require the new owner or entity to be approved or registered by a regulator. Build the time into the plan so funding and approval land together.
Personal borrowing
Partner capital loans are often personal. Finance of £25,000 or less for sole traders and small partnerships can be regulated consumer credit, and we’ll tell you at the outset if that applies.
Preparing the case
What lenders will want to understand.
- Your professional experience and track record, including any management responsibility
- The practice’s accounts, or for a start-up a business plan and cash-flow forecast
- How much you are contributing and the source of those funds
- The terms of the partnership, LLP or purchase agreement
- Your personal financial position and credit history
- Any regulatory approval the new ownership needs
We help you gather this and present it in the way lenders expect, so the first approach is a serious one. How it works →
- 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.
In our clients’ words
“The team dealt with my enquiry in a timely, efficient manner. They recommended the government-backed Start Up Loan to me, and I’ve successfully borrowed the money I needed at a low interest rate.”
Questions
What owners usually ask.
Can I get finance to buy into a partnership with no deposit?
Some partner capital facilities are arranged with the firm’s support and little or no personal contribution, but it depends on the lender, the firm and your position. See partner buy-in finance and our guide to partner capital loans.
Is it easier to buy an existing practice than start a new one?
From a lender’s point of view, usually yes, because an existing practice has accounts and a client base to assess. A start-up relies more heavily on your experience, your plan and your contribution, and fewer lenders will consider it.
Should I arrange equipment finance separately from the purchase?
Often it makes sense to plan them together but fund them separately, with asset finance for equipment and a term loan for goodwill. We look at the whole picture before approaching the market.
When should I talk to a broker?
Before you agree terms if you can. The funding structure can affect what you offer, how any deferred payments are set up and the timetable to completion.
Knowledge Hub
Read the guides.
Partner Capital Loans: How to Fund a Buy-in to a Partnership or LLP
How new partners and members fund their capital contribution to a partnership or LLP, what lenders look at, and what happens to the loan when you eventually leave.
Read the guide →Buying a Professional Practice: Every Cost You Need to Fund
A cross-profession checklist of what you need to fund when buying a law, accountancy, vet, pharmacy, optician, funeral, medical or architects’ practice, and the order to arrange it in.
Read the guide →What Lenders Look For in a Practice Finance Application, and How to Prepare
A practical guide to the documents, numbers and narrative lenders expect from professional practices, the common reasons applications stall, and how a broker presents the case.
Read the guide →Let's talk
Finance for
what's next.
Before you approach a lender, speak to someone who understands the transaction. Confidential, no-obligation initial discussion.
