Can we refinance our law firm’s existing borrowing to improve cash flow?

Short answer: Yes — in many cases law firms can refinance existing borrowing to improve monthly cashflow, reduce repayment volatility or consolidate costly short-term facilities. The right route depends on your practice structure, SRA client-account rules, the type of existing facilities and what you need the refinance to achieve. Get a tailored review with a Free Eligibility Check: Get Quote Now — Free Eligibility Check.

Disclaimer: UK Business Loans is an introducer — we do not lend or provide regulated financial advice. We connect law firms with brokers and lenders who can assess your needs. For regulated financial advice, consult a regulated adviser or your lender. Completing the enquiry form does not affect your credit score.

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Table of contents

• TL;DR — Quick answer
• Why solicitors refinance
• Types of refinancing & finance for law firms
• What lenders look for
• Costs & risks of refinancing
• Step-by-step refinance process
• Common pitfalls & how to avoid them
• When refinancing may not be the right option
• How UK Business Loans helps
• FAQs
• Final CTA & disclaimer
• Author & related resources

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TL;DR — Quick answer

Yes. Most UK law firms (LLPs and limited companies) can refinance existing borrowing to improve cashflow. Common approaches include moving short-term overdrafts into term loans, using invoice finance to unlock WIP, refinancing property loans or replacing expensive bridging facilities. Lenders will assess practice profitability, aged work‑in‑progress (WIP), partner guarantees and SRA client account protections. To explore options and get matched to suitable lenders/brokers, start a Free Eligibility Check: Get Quote Now.

Why solicitors refinance — business reasons

Improve monthly cashflow & predictability

Refinancing an overdraft or short bridging loan into a structured term loan smooths monthly payments and reduces reliance on variable facilities that spike when cash is tight.

Consolidate or reduce monthly repayments

Combining multiple facilities into one product can lower admin and sometimes reduce total monthly outflow, especially when you replace high-cost short-term lending with longer-term finance.

Release funds for growth

Refinance can free equity in practice-owned property or convert partner loans into business capital to fund expansion, hires or a technology upgrade.

Replace expensive short-term finance

Bridging finance, merchant cash advances and overdrafts can be costly. Replacing them with a better-fit product often reduces the overall cost of borrowing.

Types of refinancing and finance for law firms

Different problems need different solutions. Below are the most common options used by solicitors’ practices.

Invoice finance for solicitors (factoring vs discounting)

Invoice finance (factoring or invoice discounting) converts WIP and billed receivables into immediate cash. For solicitors it’s often structured to respect client-account rules — lenders typically take security over practice invoices/WIP rather than client accounts. Factoring involves the lender managing collections; discounting keeps collections with the practice. Invoice finance can be ideal where a steady pipeline of fee notes exists and cash is tied up awaiting settlement.

Refinance of overdraft or term loan (consolidation)

Moving overdrafts and short-term loans into a single term facility spreads repayment over a fixed period. Pros: predictable repayments and potential lower interest. Cons: longer overall term can increase total interest paid — evaluate total cost, not just monthly cashflow.

Asset finance & equipment refinance

For fit-outs, IT systems or vehicles, asset and equipment finance releases cash while keeping productive assets working for the firm. These are secured against the asset rather than client or practice WIP.

Commercial mortgages / refinance of practice property

If the practice owns premises, remortgaging can raise capital or lower rates. Lenders will value the property and review the firm’s accounts and rental/occupancy arrangements.

Bridging & short-term loans (use with caution)

Bridging can cover timing gaps (e.g., between a property purchase and sale) but is typically expensive. Use only where short-term need and clear exit exist.

Partner loans, shareholder solutions & tax considerations

Refinancing partner capital or shareholder loans requires careful tax and partnership-accounting advice. Speak to your accountant about treatment and impact on partner drawings and balance sheets.

What lenders look for

Eligibility criteria for solicitors

Lenders typically assess: annual turnover, recurring fee income, profitability, aged WIP, time in business, management accounts and, for smaller firms, partner/owner personal guarantees. Minimum facility sizes commonly start from around £10,000 upwards.

Client money & SRA concerns

SRA client account rules place strict protections on client money. Lenders generally avoid taking security over client accounts. Instead they consider: security over practice WIP, book debts, property, or partner guarantees. Be prepared to explain how client funds are segregated and how your practice complies with SRA guidance.

Credit history, covenants & transparency

Be open about past defaults or breaches of covenants — hiding issues slows or kills deals. Lenders value clear management information and a realistic plan for how the refinance improves cashflow.

Costs & risks of refinancing

• Arrangement or broker fees
• Valuation and legal fees on secured facilities
• Early repayment charges (EPCs) on existing loans
• Potential higher total cost if a term is extended
• New covenants and personal guarantees affecting partners
• Product mismatch — cheaper monthly payment but greater lifetime cost

Ask for a personalised cost breakdown from brokers after you submit an enquiry. Compare total cost and flexibility, not just the headline monthly figure. Ready to compare offers? Start a Free Eligibility Check.

Step-by-step refinancing process for law firms

1. Audit existing borrowing: collect facility letters, repayment schedules and details of EPCs.
2. Check SRA & client-account constraints with your compliance officer or solicitor to confirm what can/cannot be offered as security.
3. Define your objective: lower monthly payments, consolidate debt, raise cash, refinance property, or unlock WIP.
4. Prepare finance pack: last 2–3 years accounts, latest management accounts, aged WIP and debtor reports, partner/owner ID and a schedule of existing facilities.
5. Submit an enquiry via UK Business Loans — we match you to brokers/lenders who understand solicitors’ needs and will request only necessary information to give indicative options.
6. Review offers, ask clarifying questions, and request breakdowns of fees and covenants.
7. Complete due diligence and legal documentation with chosen lender.
8. Post‑refinance: update cashflow forecasts, monitor covenant compliance and plan for any tax or accounting changes.

Documents checklist

• Signed accounts (2–3 years)
• Latest management accounts & cashflow forecast
• Aged WIP and debtor schedule
• Details of existing facilities & repayment schedules
• Practice structure documents (LLP deed, Articles, shareholder agreements)
• Partner/owner ID and recent proof of address

Common pitfalls and how to avoid them

• Using client account funds to cover practice borrowing — avoid and check SRA rules.
• Failing to check early repayment charges — they can outweigh refinance savings.
• Choosing the lowest monthly payment without considering total cost or new covenants.
• Not comparing broker fees and onboarding charges.
• Ignoring tax or partnership accounting consequences — consult your accountant early.

Remedies: get SRA-compliance sign-off, request full cost schedules, and use an experienced broker who specialises in professional services.

When refinancing is not the right option

Refinancing may not help if the firm has persistent losses, an unstable pipeline of billable work, severe credit issues or if early repayment penalties on current facilities outweigh gains. In these cases consider operational changes, cost reductions, or restructuring advice before taking on new debt.

How UK Business Loans helps

We don’t lend — we connect your practice to lenders and specialist brokers who know the solicitor sector. Complete a short enquiry and we’ll match you to partners able to review your refinancing needs and provide rapid, no-obligation quotes. Our service is free — and completing the form does not affect your credit score.

Get Quote Now — Free Eligibility Check (takes under 2 minutes). We typically connect you with options within 24–48 hours.

For more sector-specific information see our industry overview on solicitors business loans.

FAQs

Can we use client money as security for a loan?

No. Client money is protected under SRA rules and is not available to secure commercial borrowing. Lenders will look at WIP, billed accounts, property or partner guarantees instead.

How long does refinancing take?

Simple restructures can take 2–4 weeks; cases involving property, valuations or extensive due diligence may take longer. Your broker will provide an estimated timeline.

Will refinancing affect our credit score?

Submitting an initial enquiry via UK Business Loans does not affect your credit score. Lenders may perform credit checks later in the application process.

Can a smaller firm (LLP/limited company) get refinanced?

Yes — many lenders specialise in professional services. Facilities commonly start from around £10,000 upward; suitability depends on accounts, cashflow and WIP.

What’s the difference between factoring and invoice discounting?

Factoring includes the lender managing collections and credit control; discounting keeps collections with the practice and can be more discreet. Choice depends on your preference for control and client relationship handling.

How much can we borrow?

Borrowing depends on security, turnover, profit, WIP and the lender’s appetite. For working capital and invoice finance, limits are typically a percentage of qualifying invoices or a multiple of adjusted EBITDA for term loans. Get specific figures via a Free Eligibility Check: Start now.

Final CTA & disclaimer

If your objective is to stabilise monthly payments, unlock trapped cash in WIP, or replace high-cost short-term facilities, refinancing can be an effective tool — when structured correctly. Complete our simple enquiry form to receive matched options from lenders and brokers who understand law firms: Free Eligibility Check — Get Quote Now.

Privacy & data handling: We only share your details with selected finance partners who can help with your request. We do not sell your data. Completing the enquiry form does not commit you to borrow and does not affect your credit score.

UK Business Loans is an introducer — we do not lend or provide regulated financial advice. We connect you with lenders and brokers who can provide quotes. For regulated financial advice consult your adviser or lender.

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Author

UK Business Loans Content Team — specialists in matching UK businesses with suitable lenders and brokers. Learn more: About us | How it works | Industry: Solicitors.

1) Can we refinance our law firm’s existing borrowing to improve cash flow?
Yes — most UK law firms (LLPs and limited companies) can refinance to smooth repayments, consolidate expensive short-term facilities or unlock WIP, subject to lender assessment and SRA client-account constraints.

2) Can lenders take security over client money or our SRA client account?
No — SRA client money is protected and lenders normally avoid taking security over client accounts, preferring WIP, invoices, property or partner guarantees instead.

3) What types of refinance or finance are suitable for solicitors?
Common options include invoice finance (factoring or discounting), term‑loan consolidation of overdrafts/bridging, asset/equipment finance and commercial mortgages/remortgages.

4) How long does a typical refinance for a law firm take?
Simple restructures often complete in 2–4 weeks, while remortgages or deals requiring valuations, legal due diligence or complex covenants can take longer.

5) Will submitting an enquiry affect our credit score?
No — completing a Free Eligibility Check via UK Business Loans does not affect your credit score, though individual lenders may run credit checks later if you apply.

6) How much can a solicitors’ practice borrow?
Amounts depend on turnover, profitability, aged WIP and security offered, with many working‑capital or invoice finance facilities starting from around £10,000 and invoice advances based on a percentage of qualifying invoices/WIP.

7) What documents will lenders or brokers typically ask for?
Expect to supply 2–3 years’ signed accounts, recent management accounts and cashflow forecast, aged WIP/debtor schedules, details of existing facilities and partner/owner ID and practice structure documents.

8) What are the main costs and risks of refinancing?
Key costs and risks include arrangement and broker fees, valuation and legal fees, early repayment charges on existing loans, new covenants or personal guarantees, and potentially higher lifetime interest if terms are extended.

9) Can smaller LLPs or limited companies get refinanced?
Yes — specialist lenders and brokers work with smaller LLPs and limited companies, provided they can demonstrate adequate accounts, cashflow and WIP.

10) How does UK Business Loans help law firms looking to refinance?
UK Business Loans is a free introducer that matches your enquiry to FCA‑regulated brokers and lenders who specialise in solicitors’ finance (we do not lend or provide regulated financial advice), and the enquiry is only used to find suitable partners without committing you or affecting your credit score.