SBA Loan: One Way to Finance your Law Firm Business
The process of obtaining law firm financing has many similarities to that of getting a small business loan. One should expect to spend anywhere in the range of $5,000 to $15,000 on his or her law office or business before seeing clients in the right way. A lawyer would also need to budget for all recurring expenses and any business expansion plans he or she may wish to factor in, as the practice grows.
There are many advantages to obtaining law firm financing which other segments do not necessarily have. First of all, lawyers are in much stronger shape for some loan products based on the work they do in a high-paying area of work. There are also some financing sources which are unique to esquires, too, and which can make it easier for them to access capital. One of these options is SBA loans for law firms.
SBA loans are loan guarantee programs, meaning the Small Business Administration in the US helps owners get access to traditional bank financing. Most banks perceive investment in small businesses as a risky bet – they are more used to working with bigger clientele having long-standing financial histories. Even if they are law practices, small businesses are perhaps too anonymous as entities for traditional banks to work with.
The administration helps small business owners overcome such risks by guaranteeing a portion of the loan on their behalf. This means if a business cannot repay its loan, then it will pay back the lending company that loan’s set portion.