Industries
Professional services
Professional firms are people businesses with limited hard assets. Funding is underwritten on fee income quality, client concentration and partner commitment.
Professional services
- Practice acquisition and consolidation funding
- Partner buy-in and succession finance
- Work-in-progress and fee-income facilities
- Common structures
- Work-in-progress finance, acquisition/consolidation debt, partner buy-in finance
- Typical facility size
- £100,000 – £10 million
- Indicative pricing
- Base rate plus 3–7 per cent
- Security
- Debenture over fee income; personal guarantees from partners are common
- Time to funding
- 3–6 weeks
A people business with limited hard collateral
Professional practices — law, accountancy, consultancy, architecture and similar firms — generate strong fee income but hold few tangible assets to offer as security. The value of the business sits in its client relationships, partner expertise and, in many jurisdictions, an unbilled work-in-progress balance that represents completed but uninvoiced work.
This asset-light profile shapes the whole funding conversation: lenders substitute conventional collateral analysis with a close read of fee income quality, client concentration and the commitment of the partners themselves.
Structures suited to professional practices
Work-in-progress and fee-income facilities advance against billed and, with specialist lenders, unbilled professional fees, easing the cash gap between delivering work and collecting payment. Practice acquisition and consolidation funding supports firms buying out smaller practices or merging with peers, typically structured against combined normalised profit.
Partner buy-in and succession finance funds incoming partners' capital contributions or outgoing partners' retirement payments, smoothing generational transition without destabilising the firm's working capital. These structures are frequently combined: an acquiring firm may need consolidation funding and a working capital facility simultaneously.
What lenders scrutinise
Client concentration is examined closely — a firm generating a large share of fees from one or two clients is viewed as carrying meaningful key-relationship risk. Partner tenure, retirement schedules and any recent partner departures are reviewed since they affect both client retention and the firm's leadership continuity.
For work-in-progress facilities, lenders assess billing discipline and historical write-off rates, since these determine how reliably unbilled work converts into cash. Regulatory standing, where the profession is licensed, is also verified as a condition of any facility.
Where applications typically fail
Firms frequently present unbilled work-in-progress at full expected value without adjusting for typical write-offs or fee discounts, which a lender will reprice once its own diligence is applied. Partner succession plans that are undocumented or informally agreed create uncertainty for lenders assessing the stability of the earnings base.
In consolidation transactions, failing to address client and staff retention risk explicitly — for example, through retention periods or earn-outs — is a common cause of a deal stalling at the financing stage even where commercial terms are agreed.
How GFG runs the process
GFG reviews client concentration, partner structure and billing history before approaching lenders, adjusting work-in-progress figures to a realistic recoverable value that will withstand due diligence. Where succession or consolidation is involved, retention arrangements are reviewed to ensure the earnings base underpinning the facility is well supported.
Can work in progress be funded?
Yes, specialist lenders advance against billed and, in some cases, unbilled professional fees.
Can unbilled work in progress be used as security for funding?
Specialist lenders will advance against unbilled work in progress in addition to billed fees, though typically at a lower advance rate reflecting the additional uncertainty of unbilled recoverability. Billing discipline and historical write-off rates are assessed as part of that decision.
How is client concentration risk assessed in professional services lending?
Lenders look at the percentage of total fee income derived from the largest clients and the length and nature of those relationships. High concentration is not automatically disqualifying but usually results in more conservative facility sizing or additional monitoring covenants.
Can funding support a partner buying into the practice?
Yes, partner buy-in finance is a recognised structure that funds the incoming partner's capital contribution, typically repaid from the partner's future profit share, and is distinct from the firm's own working capital facilities.
Is acquisition funding available for consolidating smaller practices?
Yes, consolidation funding is well established in professional services, structured as senior debt against the combined normalised profit of the acquiring and acquired practices, often alongside earn-out or retention arrangements to manage client transfer risk.
Do sole practitioners or very small firms qualify for funding?
Smaller practices can access facilities, though options are more limited than for larger firms with a diversified partner and client base. Work-in-progress and asset finance are typically more accessible than unsecured cash-flow lending at this scale.