How a 3-Partner Law Firm Funded a £60k Office Refurbishment

The £60k funding decision was approved within a short turnaround of application. Final completion followed once all three partners had signed the documents.

This is the first in a series of success stories based on real deals completed by Andrew Yates, Director at Practice Capital.

The law firm featured here has been kept anonymous.

The situation. More than VAT and PII

The firm is an established three-partner legal practice structured as a partnership rather than an LLP or limited company.

Like many law firms, it had previously used finance to manage regular cashflow commitments. In particular, VAT and professional indemnity insurance premiums can create sizeable payments at specific points in the year.

This time, the requirement was different.

The partners had decided to refurbish their office. The project included:

• Decoration and general improvements
• Changes to the internal layout
• Improvements to individual partner and fee-earner offices
• Updated waiting areas
• New furniture
• New office equipment

It was a practical investment in the working environment. However, it was also a varied project with several different costs attached.

That distinction mattered when choosing the right form of finance.

Why asset finance was not the right fit

Asset finance can be useful when a business is funding a clearly defined piece of equipment. For example, a firm may use it for a vehicle, specialist machinery, IT hardware or a single item of office equipment.

This refurbishment was broader.

The firm needed to cover a combination of building work, decoration, layout changes, furniture and equipment. There was no single asset, or narrow group of assets, that could sensibly form the basis of the finance.

A specific asset finance package was therefore unlikely to provide the flexibility the project required.

A business loan over a three-year term was a better match. It allowed the partners to fund the project as a whole, rather than splitting the refurbishment into separate applications for individual items.

That kept the structure practical and easier to manage.

Options before the application

One of the benefits of working with specialist law firm lenders is that indicative pricing can often be obtained before a formal application is submitted.

That gave the firm a clearer view of the likely cost from the outset.

Rather than presenting a single option, Andrew prepared three possible scenarios:

1. An option from the lender offering the lowest rate
2. A middle option balancing cost and flexibility
3. A slightly higher-rate alternative as a further option

The purpose was not to push the firm towards one particular lender. It was to give the partners a realistic range before they committed time to the application process.

This approach helped them answer important questions early:

• What level of monthly repayment would fit the practice?
• How much of the refurbishment could be completed within budget?
• Would the project need to be phased?
• Which option offered the most suitable balance between cost and speed?
• Was the proposed three-year term appropriate?

For a practice managing live legal work, staff costs, rent, technology and client-related expenses, those answers matter.

The partners could budget for the refurbishment with a clearer understanding of the likely funding cost. There was less uncertainty before work began.

A focused application

The three partners are hands-on in the day-to-day running of the firm. They did not want to spend weeks working through a long bank process if a more direct route was available.

The application was supported by the information the lender needed to assess the firm properly, including:

• Recent bank statements
• The firm's accounts
• A report showing income owed to the firm or expected to be owed

This information helped demonstrate the firm's trading position and the timing of income coming into the business.

That is particularly relevant for legal practices. Fee income does not always arrive at the same time as the work is completed. Work in progress, billing cycles, disbursements and client payment timing can all affect the movement of cash through the practice.

A lender assessing a law firm needs to understand more than just turnover. It needs to consider how the firm earns, bills and collects its income.

The application was approved within a short turnaround of submission.

The cost structure was clear

The lender selected for the application did not charge the kind of large upfront fee that some SME lenders apply.

Instead, there was a smaller administration fee.

That worked better for the firm. It meant more of the available cash could remain focused on the refurbishment itself, rather than being used to meet a significant arrangement cost at the beginning.

The partners also received the key information before making their decision. The application was no obligation, so they had time to review the options and decide whether the proposed finance was suitable.

There was no separate broker fee for the client. Practice Capital's commission was paid directly by the lender and factored into the loan arrangements.

This is an important part of keeping the process transparent. The firm knew what it was considering and how the cost structure worked before proceeding.

Three partners. One online process.

Once the facility had been approved, all three partners needed to complete the required documentation.

Each partner:

• Signed the loan contracts
• Provided identification
• Completed the lender's required checks

The final signing stage took around three to four working days. This was not because of a problem with the application. Each partner simply had to find time alongside their existing responsibilities in the firm.

That is a familiar issue in partner-led businesses. Decisions may be made collectively, but the people required to complete the process are often managing clients, staff, deadlines and their own fee-earning work at the same time.

Online signing made the process considerably easier. The partners did not need to arrange a meeting at a branch or print and return a bundle of paperwork. Each could complete their part when time allowed.

Once all the documents had been signed and the checks completed, the funds were paid out.

Keeping the process simple

For a legal practice, time is a commercial consideration.

The partners may be advising clients, attending hearings, completing transactions, supervising staff or dealing with urgent matters. A funding process that requires repeated explanations, unnecessary paperwork or long periods of waiting can become a distraction in its own right.

The broker's role is to remove as much friction as possible.

In this case, that meant:

• Understanding the firm's structure from the beginning
• Recognising that this was a refurbishment project rather than a standard asset purchase
• Obtaining indicative options before the application
• Presenting three scenarios in a clear format
• Explaining the likely cost and repayment structure
• Gathering only the information needed for assessment
• Coordinating the application with the specialist lender
• Making online signing available to all three partners
• Remaining available while each partner completed the process

The aim was not to overcomplicate the finance. It was to give the partners a clear route from refurbishment plan to funding decision.

A practical result for a practical project

The firm secured a £60k three-year loan to support a varied office refurbishment, with approval reached within a short turnaround of application.

The £60k funding could be used across the project rather than being restricted to one specific asset. That gave the partners the flexibility to address the office as a whole, including the decoration, layout, furniture and equipment requirements.

Just as importantly, they had indicative options before applying. They were able to budget with greater confidence and choose the structure that best suited the practice.

This is the type of requirement that may not fit neatly into a standard product category. It is not simply equipment finance. It is not a VAT facility or PII premium finance. It is a wider business investment with several costs landing together.

That is where a specialist approach can be useful.

Could this approach suit your law firm?

Every legal practice has its own structure, income profile and priorities. A partnership may have different requirements from an LLP. A growing firm may need working capital for recruitment, while an established practice may be planning an office move, refurbishment or technology upgrade.

At Practice Capital, we arrange finance for legal practices including:

• Office refurbishment and fit-out
• Working capital for WIP and lock-up
• VAT and tax bills
• Professional indemnity insurance premiums
• Case management systems and IT
• Recruitment and expansion
• Partnership and practice funding

You can learn more about our legal practice finance service or start a confidential enquiry.

We can provide indicative options before you decide whether to proceed. There is no obligation to apply, and there is no separate broker fee for the client. We are a credit broker, not a lender, and any facility remains subject to lender assessment, affordability and status.

If you are planning a refurbishment or another investment in your practice, an initial conversation may help you understand what could be available, how the repayments might look and which route is most suitable.

The next step can be brief, practical and confidential.