Not too long ago, an attorney could open a law practice with just a desk, some legal pads of paper and a few pens.
Now, lawyers need healthy cash flow to pay for overhead expenses, technology tools, personnel, legal experts, marketing and more.
Many attorneys struggle to maintain a steady flow of capital as fees for services can be delayed. An injection of low-cost funds can bridge the time between client payments or settlement payouts. However, attorneys might find that going directly to a bank isn’t the right solution.
SBA loans are the best bet for lawyers who own their own practice for several reasons. First, they have the lowest rates around. SBA loans through SmartBiz LoansÒ have rates from 5.50% - 7.75%*. That’s hard to beat.
Second, SBA loans have a 10-year payback term with no prepayment penalty. Long terms means your monthly payments are very low, helping you to manage cash flow and you can pay them off at any time without a penalty. For example, if you get an SBA loan through SmartBiz for $100,000, your monthly payment is just $1,123 per month.
Finally, you might have heard you have to jump through a lot of hoops and that paperwork can be overwhelming. That’s not true anymore. SmartBiz has a streamlined online application that’s fast and easy to use.
Also, because we are a marketplace with multiple, preferred SBA lending banks, we can match you with the bank most likely to approve your loan – getting you to a “yes” easier and faster. Funds can be in your bank account as soon as 7 days after the application is complete. We know how valuable your time is and our dedicated Relationship Managers are available to help you through the process .
If you’re still not convinced that extra funds can help your practice, here are some great ways legal professionals can use SBA loan proceeds to grow and save money.
1. Working Capital
Working capital is calculated by deducting current liabilities from current assets. If your current assets do not exceed your current liabilities, you run the risk of being unable to pay your short-term creditors on time.
Make sure you have enough working capital in the bank to meet ﬁnancial obligations and cover day-to-day expenses. A low-interest, long-term SBA loan can provide a steady cushion of working capital.
2. Paying Off Existing High Interest Debt
It’s easy to get trapped in a debt cycle, especially when you face an emergency or unexpected dips in cash flow. Credit cards can be a source of funding that ends up costing more than expected. Consolidating or refinancing debt can improve cash flow, strengthening your business.
You need the best equipment to help you and your team manage communications, paperwork and case files. From computers, to printers to scanners, an SBA loan can help finance high dollar items to keep your firm up and running.
Could you use a new associate, paralegal or another legal professional on your team? A low-cost SBA loan can help you cover the expenses of hiring, training and paying a new employee.
5. Commercial Real Estate Purchase or Refinance
With 25-year terms and low interest rates, 7(a) SBA loans through SmartBiz are a great option if you need to refinance an existing commercial real estate mortgage or buy an office building. Instead of spending your hard-earned dollars on a rent or lease, purchase a property where you can operate your firm and start building your personal net worth.
When business costs are cut, marketing efforts often takes a hit. You can use proceeds from an SBA loan to increase marketing outreach, attracting new clients and cases to strengthen your bottom line.
If you’re ready to strengthen the finances of your legal practice or take it to the next level, take five minutes to see if you pre-qualify for a low-cost SBA loan through our bank partners here. As a bonus for our blog readers, you’ll save $500 off of closing costs when you create an account and enter the promo code “blog”.