How Is Pricing Structured on a Revolving Credit Facility for Solicitors?

If your firm needs short-term working capital between billing and client settlements, a solicitor’s revolving credit facility (revolver) can be the quickest way to smooth cashflow. This guide explains, in plain English, how lenders price revolvers for law firms — the reference rate, margins, commitment fees, utilisation surcharges, fees and covenants — and what you can do to get the most competitive terms. Suitable for partners, practice managers and finance directors at firms seeking facilities of £10,000 and above.

Important: UK Business Loans is an introducer — we do not lend or provide regulated financial advice. Our service is free and no-obligation. We connect firms with brokers and lenders who can provide personalised quotes. The enquiry form is only information to help us match you; it is not a loan application.

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Quick summary (TL;DR)

Revolver pricing for solicitors is usually expressed as SONIA (or another reference rate) + a margin. Total cost includes interest on drawn amounts, a commitment (undrawn) fee, arrangement/legal fees and sometimes utilisation surcharges or tiered pricing when utilisation is high. Lenders price on firm-specific risk: turnover, WIP quality, debtor ageing, client-account constraints and security. Strong firms typically pay lower margins and fees; litigation-heavy or high-concentration practices pay more. For a quick, no-obligation check, Get Quote Now — Free Eligibility Check.

What is a revolver for a law firm?

A revolving credit facility (revolver) is a flexible line of credit your firm can draw, repay and redraw during an agreed period. For solicitors it is typically used to:

• Bridge cashflow between billing, client settlements and receipts;
• Fund disbursements, payroll, partner drawings or short-term supplier costs;
• Smooth seasonal fluctuations or support fees-in-advance work.

Lenders often base availability on a borrowing base: billed and unbilled WIP, aged debtors (billed ledger), with conservative advance rates. Because SRA client money rules restrict charging client funds as security, lenders apply conservative haircuts to client-related balances and place more weight on recoverable billed debt and the quality of WIP.

Key pricing components explained

Base/reference rate (SONIA or alternative)

Most UK revolvers reference SONIA (the Sterling Overnight Index Average) since LIBOR’s phase-out. Pricing is shown as SONIA + margin. Some legacy facilities may still reference bank base rate or a proprietary rate — always confirm the reference and any reset frequency.

Margin over the base rate

The margin (expressed in percentage points) is the lender’s premium for credit risk. It reflects firm size, financial performance, sector risk and collateral quality. Strong regional firms might see margins from around SONIA + 1.25–2.5% (illustrative), while higher-risk or specialist litigation practices can be quoted SONIA + 3–6% or more. Margins may include ratchets: if covenants improve the margin reduces; breaches can increase it.

Commitment fee (fee on undrawn facility)

Charged to compensate the lender for reserving the undrawn portion. Typical ranges: 0.5%–1.5% per annum on the undrawn balance, payable quarterly or monthly. Smaller firms and higher-risk facilities generally attract higher commitment fees.

Utilisation tiers & utilisation surcharges

Some facilities use tiered pricing where the drawn amount is charged a higher margin once utilisation exceeds specified bands (e.g., >50% or >75%). Others add a flat utilisation surcharge applied to the drawn portion. Always check whether a lower margin applies to the first band of utilisation and what triggers the higher band.

Arrangement, legal and due diligence fees

One-off arrangement fees (a % of facility or fixed amount) plus legal costs and due diligence. Typical arrangement fees range from 0.5%–2% depending on lender and facility size. Budget for lender legal fees and your own solicitor’s costs during documentation.

Floors, caps and interest calculations

Some lenders apply floors (a minimum reference rate or margin) so when SONIA falls, the effective rate won’t drop below a set floor. Interest is typically calculated daily and charged monthly or quarterly. Check whether interest is payable in arrears and how compounded.

How lenders determine the price — the credit assessment

Pricing is set after an underwriting review. Core factors lenders assess:

• Financial health: turnover, adjusted EBITDA, historic profitability and cash balances;
• Cash conversion: WIP realisation speed, debtor days and historical write-offs;
• WIP quality: recoverability by matter type (litigation, conveyancing, corporate); ageing and billing pipeline;
• Client concentration: single large corporate clients increase risk;
• Partner drawings and capital structure: high drawings or unsustainable distributions increase risk;
• Professional indemnity insurance (PII) and regulatory compliance;
• Security and guarantees available: personal guarantees, debentures, charges on property.

Solicitors-specific considerations

• SRA client money: lenders are cautious about client account balances and may exclude them from the borrowing base or apply heavy haircuts;
• Billing model: firms reliant on speculative or conditional-fee work (CFAs/contingency) are riskier;
• Practice mix: predictable corporate work and private client retainers are rated lower risk than dispute-heavy practices with uncertain recoveries.

Different lenders have different appetites: high-street banks may offer lower margins but require stronger covenants and security; specialist lenders/asset-backed lenders accept more risk but at higher cost.

Typical pricing examples and a worked calculation

Figures are illustrative only — actual pricing varies by lender and firm circumstances. Request a personalised quote.

Common pricing structures & clauses to watch

• Covenant ratchets (improved margin if leverage/DSCR targets met);
• Material adverse change (MAC) or change-of-control clauses;
• Penalty/default rates (higher interest if you default);
• Security package demands: debenture, fixed charge on property, personal guarantees;
• Reporting obligations: monthly management accounts, aged WIP and debtor reports — stricter reporting can reduce margin;
• Break costs and early repayment charges on certain facilities.

How to get the best price

Small, practical steps your firm can take to reduce margin and fees:

• Keep up-to-date and clean management accounts and aged creditor/debtor reports;
• Improve WIP realisation and reduce debtor days where possible;
• Diversify client base to lower concentration risk;
• Hold strong PII and demonstrate robust compliance with SRA rules;
• Consider using an experienced broker — they can package your profile to several lenders and negotiate competitive terms;
• Be willing to accept reasonable reporting covenants in exchange for a lower margin.

Want tailored options? Free Eligibility Check — complete our short enquiry (just 2 minutes) and we’ll match you to lenders/brokers who specialise in law-firm finance.

Process timeline — what to expect and documents to prepare

Typical steps and timing:

1. Enquiry & initial credit check — immediate to 72 hours (soft check).
2. Term sheet/indicative offer — 24–72 hours once initial assessment done.
3. Due diligence (detailed underwriting) — 1–3 weeks (management accounts, WIP & debtor schedules, PII, partner drawings history).
4. Documentation & legal completion — 2–6 weeks depending on security and counsel workload.

Documents to have ready

• Latest full-year statutory accounts + most recent management accounts;
• Detailed aged WIP schedule and aged debtor ledger;
• Cashflow projections and partner drawings history;
• PII schedule and any regulatory correspondence;
• Property details if offering security (title deeds, valuations).

FAQs

Final steps — get a tailored quote

If you want a fast, no-obligation review of how a revolver would be priced for your firm, complete our short enquiry. It takes around two minutes and is not an application — it helps us match you with the lenders or brokers most likely to offer competitive terms.

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We are an introducer — we do not lend or provide regulated financial advice. We connect firms with brokers and lenders who specialise in solicitor finance. All pricing examples in this guide are illustrative only and will vary by lender and firm circumstances.

Related pages: Invoice Finance · Asset Finance · About Us

For solicitor-specific funding options you may also find our page on solicitors-business-loans helpful.

1. What is a revolving credit facility for solicitors?
A revolver is a flexible line of credit your law firm can draw, repay and redraw during an agreed period to bridge billing, client settlements and short‑term working capital needs.

2. How is pricing structured on a solicitor revolver?
Revolver pricing is typically shown as SONIA + a margin and includes interest on drawn amounts plus commitment (undrawn) fees, arrangement/legal fees and possible utilisation surcharges or tiered margins.

3. What does “SONIA + margin” mean and how does it affect my interest rate?
“SONIA + margin” means your rate is the Sterling Overnight Index Average plus a lender margin that varies by firm risk, so higher margins lead to higher overall interest costs.

4. Do lenders accept WIP and billed debtors as security for a solicitor revolver?
Many lenders include WIP and billed ledger in a borrowing base but apply conservative haircuts, especially where SRA client‑money, speculative matters or ageing debt are involved.

5. Will client account balances count towards my borrowing base?
Lenders treat client money cautiously—client account balances are often excluded or heavily discounted due to SRA restrictions and recoverability concerns.

6. What fees should I expect besides interest?
Expect a commitment fee on the undrawn facility, one‑off arrangement and legal fees, possible utilisation surcharges, and higher penalty/default rates for breaches.

7. How can my firm get the most competitive revolver pricing?
Improve WIP realisation and debtor days, maintain clean management accounts and strong PII, diversify client concentration, accept reasonable reporting covenants, and use an experienced broker to negotiate terms.

8. How long does the application and drawdown process usually take?
Typical timelines: initial soft check and term sheet within 24–72 hours, due diligence 1–3 weeks, and documentation/legal completion 2–6 weeks depending on security requirements.

9. Will submitting an enquiry through UK Business Loans affect my credit score?
No — the initial UK Business Loans enquiry is a soft, no‑obligation eligibility check and will not affect your credit record; formal lender checks may occur later if you progress.

10. What documents do lenders normally require for a solicitor revolver?
Lenders generally ask for latest statutory accounts, recent management accounts, detailed aged WIP and debtor schedules, cashflow projections, partner drawings history, PII details and any security/property information.