SBA Loans for Law Firms
Acquiring a law practice, purchasing office real estate, or major expansion requires substantial capital. SBA loans offer the lowest rates and longest terms available, potentially saving your firm $100,000+ in financing costs over the loan life.
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SBA Financing for Law Firms
Law firms with established practices and steady fee collection qualify well for SBA. Lenders understand legal economics when evaluating attorney applications.
Practice Acquisition
Acquiring an existing law practice with established client relationships can be financed through SBA. Practices typically sell at 0.5-1.5x annual revenue.
Real Estate Terms
SBA offers 25-year terms for law office real estate. Owning your office builds equity and eliminates rent escalation.
Baby Boomer Retirements
Many law firm partners are retiring. The wave of practice transitions creates acquisition opportunities for younger attorneys.
Recurring Revenue Value
Law firms with retainer clients and recurring matters have predictable revenue that SBA lenders value highly.
When SBA Financing Makes Sense
Major law firm investments deserve the best available terms.
Practice Acquisition Cost
Law practices sell for 0.5-1.5x annual revenue. A profitable practice can cost $300K-$1.5M. Substantial capital required.
Office Real Estate
Purchasing your law office location requires long-term financing. SBA offers 25-year terms.
Partner Buyout
Buying out a retiring partner requires immediate capital. Partnership valuations can be substantial.
High Alternative Cost
A $500K acquisition at 16% versus SBA at 9% costs $35,000 annually in extra interest.
Major Expansion
New office, additional attorneys, and infrastructure require substantial investment.
Short-Term Payment Pressure
5-year terms create crushing payments. SBA 10-year terms make payments manageable.
Law Firm SBA Process
Plan for 60-90 days from application to funding.
Pre-Qualification
We review your situation to assess SBA eligibility.
1-3 days
Documentation
Assemble tax returns, financial statements, practice valuation, and business plan.
2-4 weeks
Underwriting
Lender and SBA review. Expect questions about revenue, case pipeline, and practice history.
4-8 weeks
Closing
Commitment letter, closing documentation, and funding.
1-2 weeks
Government-Backed Law Firm Financing
SBA loans provide the lowest cost of capital for qualified law firms. The documentation and timeline investment pays off through dramatically better rates and terms.
Lowest Interest Rates
SBA rates capped at Prime + 2.25-2.75%. Current rates typically 9-11%.
Longest Terms
Up to 10 years for working capital. Up to 25 years for real estate.
Large Amounts
SBA 7(a) up to $5 million. Finance acquisition, real estate, expansion.
Practice Acquisition
Buy existing law practice, acquire partner shares, or purchase book of business.
Real Estate Purchase
Own your law office with 25-year terms. Build equity.
No Balloon Payments
Fully amortizing loans. No large lump sum due at maturity.
Law Firm SBA Applications
Common situations where SBA provides optimal legal practice financing.
Practice Acquisition
Buy an existing law firm with client relationships.
Typical funding: $200K-$2M
Partner Buyout
Buy out retiring partner or purchase partnership share.
Typical funding: $150K-$1M
Real Estate Purchase
Purchase your law office location with 25-year terms.
Typical funding: $300K-$2M
Major Expansion
Significant expansion with new attorneys and infrastructure.
Typical funding: $200K-$1M
Office Buildout
New office construction or major renovation.
Typical funding: $150K-$750K
Debt Refinancing
Replace expensive financing with lower-rate SBA.
Typical funding: $150K-$500K
SBA vs. Alternative Law Firm Financing
Understanding the trade-offs for legal practice financing.
| Feature | SBA 7(a) Loan | Bank Term Loan | Working Capital |
|---|---|---|---|
| Interest Rate | Prime + 2-3% | 10-16% | 15-25% |
| Maximum Term | 10-25 years | 5-7 years | 1-3 years |
| Maximum Amount | $5 million | $500K typical | $300K typical |
| Down Payment | 10-20% | 10-25% | 0% |
| Time to Fund | 60-90 days | 2-6 weeks | 1-2 weeks |
| Documentation | Extensive | Moderate | Light |
| Credit Requirements | 680+ | 650+ | 600+ |
| Best For | Major investments | Mid-range | Quick access |
SBA Requirements for Law Firms
SBA eligibility requirements for attorneys and legal practices.
Bar License
Active bar license in good standing.
Active license
Practice Experience
Experience in legal practice or firm management.
2+ years experience
Personal Credit
Good personal credit from attorney owners.
680+ typically required
Revenue History
Demonstrated fee collection and revenue.
Stable or growing revenue
Owner Equity
Owners must contribute equity, typically 10-20%.
10-20% equity injection
Business Plan
Detailed plan for acquisitions or major expansion.
Comprehensive plan
Younger attorneys acquiring retiring partners often qualify with strong credentials and transition support.
Real Results
Thompson Legal Group
Business Law, Colorado
The Challenge
Senior partner retiring wanted $650,000 for his stake in a firm producing $1.1M annually. Junior partners needed acquisition financing without crushing payments.
The Solution
SBA 7(a) loan for $585,000 at 9.5% over 10 years with $65,000 equity contribution. Monthly payment: $7,550.
The Result
Partner buyout completed. Fixed payments manageable alongside firm operations. Client retention exceeded 90%. Junior partners now own 100% of growing practice.
“Alternative financing quoted $11,000 monthly. SBA payments of $7,550 let us invest in associate development. The extra timeline was worth the savings.”
Legal Industry SBA Data
Statistics on SBA financing for law firms.
SBA Advantages for Law Firms
Why SBA effort is worth it for major legal investments.
Massive Interest Savings
On $500K loan, 9% vs 15% saves $30,000 annually in interest.
Practice Ownership Path
Lower payments make acquisition achievable for associates.
Real Estate Ownership
25-year terms make office ownership achievable.
Cash Flow Preservation
Lower payments preserve cash for case expenses and staff.
Transition Support
SBA designed to support practice transitions.
Growth Capital
Finance expansion with manageable terms.