While the legal market is often considered saturated, there is still money to be made by starting your own firm.
Starting your own law firm is no easy feat, but the payoff is worth the investment.
One of the hardest parts of getting off the ground? Having the capital to do it.
It’s estimated that you’ll need at least double digits in cash to open your own firm. Fortunately, there are a lot of options when it comes to obtaining law firm financing.
Keep reading to learn about some of the best ways to secure funding for your startup.
SBA Loans
SBA loans help small businesses such as law firms secure financing by guaranteeing up to 85% of the total loan. This serves as a promise to the lender that if the borrower can’t pay back the loan, the SBA will on their behalf.
The benefit of SBA loans is that financiers and lenders are able to accept risks that they otherwise wouldn’t because the risk is mitigated by the SBA. As a small business owner, you’ll be eligible for larger amounts of money, better rates, and more manageable terms.
There are many types of SBA loans, but the best kind for law firm financing is a 7(a) loan. This is large amount loan that can be used for pretty much anything, from getting started to purchasing an office.
These loans come with low interest rates and long repayment terms. SBA loans are very competitive and the application and approval process can be time-consuming. If you need cash fast, look elsewhere.
Business Lines of Credit
This is an excellent form of law firm financing for those who need cash periodically.
Instead of borrowing a lump sum of cash and paying interest right away, business lines of credit allow you to only borrow when you need to. You’ll only pay interest on the money you’re currently borrowing.
Term Loans
Bank loans are a better option than SBA loans for many law firms because of the competition. But bank loans can still take weeks before you even hear back.
For many businesses, this won’t work. Fortunately, term loans offer fast access to law firm financing.
These don’t rely on your credit like bank loans often do. They also don’t require tons of business experience.
These loans come with few restrictions on how you can use your cash.
You can choose the specifics of your loan like whether the repayment term length is short, medium, or long. These loans offer the most flexibility for first-time law firm owners.
Secure Law Firm Financing
If you’re a new business owner looking to secure funding for your new company, contact us today to learn more about our law firm financing options.
We offer various loan and credit options for new law firm owners. Click here to get started with an application or contact us directly to find out which of our options is right for you.