Every firm and every situation's unique - every finance solution should also be unique. 

Over the last 40 years we've assisted many professional firms in the following areas 

• Accounting
• Financial planning
• Legal practices
• Medical and Dental practices
• Insurance Brokers
• Consulting engineers and Quantity surveyors

We understand that every practice is unique, and every partner will have their own aspirations whilst working as part of the team.

As a broker we act on your behalf to find the best solution that suits your needs.

Unlike a banker we're not tied to one set of products and lending guidelines. Our role is finding the best finance option for your practice, that will work harder for you - not the bank. 

We understand the challenges you face and can assist with all facets of practice finance to help you achieve your collective goals sooner.

Contact us to discuss your finance needs in relation to

• Refinance
• Succession planning
• funding growth of your practice by acquisition or buy in
• buying or upgrading your premises
• equipment and vehicle funding
• your personal finance needs.

Determining Borrowing Capacity

Professional practice lending is essentially based on the recurring income streams of the practice. The guidelines will vary with the type of practice and the lender.

The primary consideration is an assessment of recurring income or Future Maintainable Earnings (FME = Earnings Before Income Tax, Depreciation and Amortisation adjusted for partners salaries) on historic and future cash flows.

The secondary consideration is Gearing Level Against Turnover - usually up to 60%.

Security - is generally a charge over the practice plus the guarantees of the individual partners (or directors). The guarantees may be joint & several - or limited. In some cases, the lender may seek a mortgage over real estate assets. Care should be taken that personal assets (property) are not cross collateralised or captured under all monies clauses. 

Business and Personal Servicing must be satisfactory.

Minimum Loan Amounts and repayment terms will vary with the lender.

It's usually mandatory that the practice banks with the lender post settlement          

Example - Acquisition - Accounting /Financial Planning / Insurance Broking

Supporting a new equity holder to manage succession within a firm  - Most younger staff members within a firm don't have the asset base to buy out an existing partner.  

• 3 Director firm - One director seeking to retire and an internal planner / manager identified to step up to an equity position and directorship.
• Annual Practice Income $2.6m
• Normalised profit $950,000 per annum
• Existing borrowings $200,000 overdraft $300,000 term loan for previous acquisition

Borrowing capacity calculation - based on future maintainable earnings.

• Normalised Profit                                                                      $950,000
• Less notional Directors salaries  ( $150,000 x 3)                  ($450,000)
• Future maintainable earnings (FME)                                        $500,000
• Funding Multiple                                                                                   3x
• Maximum Loan for practice                                                       $1,500,000
• Equates to approximately 60% gearing ( $2.6m x 60% = $1.560m) 

Facilities requested/provided

• Overdraft                                                                                     $200,000
• Refinance Core Debt                                                                 $300,000
• New Equity buy in loan                                                             $600,000

                                                                                                         $1,100,000

Case Study - Acquisition - Accounting /Financial Planning / Insurance Broking

Supporting funding to acquire other firms

• 2 Director Accounting firm with planning  - with opportunity to acquire a small planning practice $500k fees - price $500k
• Current Annual Fee Income                                 $1,500,000
• Normalised annual profit                                         $750,000
• less notional directors salaries                              ($300,000)
• Future maintainable earnings                                 $450,000
• Funding multiple                                                              3x
• Maximum Loan to practice (60% AFI)              $1,200,000

Facilities Requested /Provided

• Fully drawn advance - Current purchase       $500,000 - Int only 2 years converting to P&I 3 years 
• Line of Credit - future purchases                     $500,000  - 5 yrs facility drawn as required

Case Study  - Legal Practice - Working Capital Funding 

Suporting working capital requirements for legal practices

• 3 partner legal practice - with strong growth trajectory requiring working capital funding to continue growth. Current working capital is $800,000 - provided by partners from personal borrowings.
• Total WIP & Debtors - $1,000,000 of which 15% is long dated. long dated WIP and debtors are quarantined.
• Fund up to 50%  of the non quarantined WIP & debtors  - $850,000 x 50% = $425,000 maximum loan.

Facility Provided - $500,000 overdraft.