Lending and Professional Practices, what are the options available?

In broad terms there are three sources of funding available to a professional services firm namely the partners or members; the firm's bankers and external investors.

If you are one of the multiple owners that sit behind the platform, there is your initial capital contribution to fund, and possibly a need for additional capital at a later date to be made available by you either in the form of an increased capital contribution or a loan. This capital is often introduced into the business through a partner capital loan from a bank.

Bank funding of the business can take many forms. It may be an overdraft, a term loan or a working capital facility. All of which will need to be properly considered and documented. The implications for the business of breaching banking undertakings can be extremely serious, both for the firm and the individuals behind it.

External funding (whether from private equity, angel investors or crowdfunding) is still relatively unusual for professional services firms. It will be interesting to see how this develops as the pace of change means that professional services firms are critically examining how and where they deliver services. Will the innovation that the market demands put off or encourage external investment?

In the lifecycle of the professional services firm funding can be of concern on any number of occasions:

  • Making an acquisition
  • Developing new service lines or markets
  • Improving financial arrangements
  • Capital expenditure for example to upgrade IT
  • Cashflow management for example to meet your tax bills
  • Repaying the capital of partners leaving or retiring from the firm
  • The business encountering financial difficulties

In all of these circumstances obtaining the right funding package at the right time is a vital element to that strategic objective being successfully achieved.

At these key times, whether you are an LP, LLP, partnership or company our banking team can provide clear pragmatic advice that helps you achieve your commercial goals. We can guide you through the loan and security documentation required by lenders (both for individual partnership capital loans and banking facilities for the firm). We can help ensure that the process is as painless as possible for you, enabling you to focus on running your business.

With over 50 specialist banking lawyers across the UK you have access to a team that can deliver to you a client focussed, partner led, cost efficient service, tailored to meet your needs. We will provide to you the same quality service and advice that we know that you would look to provide for your clients.

For further information or advice on funding for professional services firms, please contact Helen Corner.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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Helen Corner


I am a partner specialising in corporate banking and a leading member of the firm’s national banking team.