What eligibility criteria do lenders typically apply to solicitor firms?

Lenders usually assess solicitor firms on five pillars: regulatory standing, financial strength, practice risk profile, security and ownership, and operational controls. In plain terms, they confirm your SRA status and PII, review your accounts and lock‑up, gauge your case mix and claims history, check directors/partners and security, and look for robust AML and client money controls. Meeting these tests improves access to specialist facilities such as PII premium finance, VAT loans, working capital, WIP/case finance, invoice finance for corporate billings, and asset finance.

Core eligibility requirements for UK solicitor firms

Regulatory status and professional indemnity

Most lenders require an active practising certificate and clean standing with the Solicitors Regulation Authority (SRA) or the Law Society in Scotland or Northern Ireland. They will ask for confirmation that your professional indemnity insurance (PII) is in force with adequate limits and an acceptable insurer. A low claims frequency and no recent SRA interventions materially strengthen eligibility.

SRA/Law Society standing

Expect lenders to request your latest SRA accountant’s report and any correspondence about material issues. Accreditations such as Lexcel or the Law Society’s Conveyancing Quality Scheme (CQS) can be positive signals of governance. Any historic breaches must be fully disclosed with remediation evidence.

Financial health and trading history

Most lenders prefer at least 24 months’ trading history, though some will consider 12 months with strong management accounts and forecasts. Typical minimum turnover thresholds range from £250k to £1m, depending on the facility type and sector lender. They will examine profitability trends, partner drawings, capital position, and cash production from WIP and debtors.

Profitability and lock‑up metrics

Underwriters focus on lock‑up (WIP plus debtors) and its age profile because it drives cash conversion. As a broad guide, many legal-sector lenders look for lock‑up under 120–180 days, with older balances actively managed. Consistent fee-earner utilisation and stable margins help offset seasonality in conveyancing and litigation teams.

Client money and banking conduct

Lenders typically review bank statements for 6–12 months to assess cash flow conduct. They will want assurance that client account handling complies with SRA Accounts Rules and that there are no commingling issues. HMRC liabilities should be up to date with no arrears or, if present, covered by a formal Time To Pay agreement.

Risk factors and case mix considerations

Practice areas and revenue quality

Case mix matters because it affects predictability and recovery. A balanced spread across corporate, private client, employment, and dispute resolution is often viewed favourably versus heavy reliance on volatile workflows. High-volume residential conveyancing can be eligible, but lenders will assess chain risk, panel stability, and market cycles.

Conveyancing versus litigation exposure

Conveyancing-heavy firms may face tighter scrutiny on fall-through rates, lender panel retention, and PI risk. Litigation and personal injury practices seeking WIP or disbursement funding will be assessed on case duration, win rates, average settlement values, ATE cover, and realisations history. Insurer-backed or corporate instruction work can improve invoice finance eligibility due to stronger debtor quality.

WIP, debtors, and lock‑up analysis

Aged WIP and aged debtor reports are standard in underwriting. Lenders look for concentration risk, such as where the top 10 clients represent a large share of unpaid fees or WIP. Polices for billing cadence, interim billing, and proactive credit control are positive indicators.

Typical thresholds lenders look for

• Lock‑up under 150 days for general practices; higher tolerances for complex litigation with evidence of recoveries.
• Over 70% of debtors within 90 days and clear plans for older balances.
• Stable fee-earner headcount and demonstrable pipeline visibility.

PII and claims history

Premium size, insurer rating, and claims history are key risk signals. Significant open claims, frequent notifications, or material excesses can reduce appetite or increase pricing. Timely PII renewal and absence of last-minute binders are viewed positively by premium finance providers.

Security, structure, and people

Firm legal structure and ownership

LLPs and limited companies are commonly funded, with traditional partnerships also eligible depending on lender appetite. Alternative Business Structures (ABS) are acceptable to many specialist underwriters, subject to governance checks. Lenders review partner/member stability, ownership changes, and succession planning.

ABS, LLPs, and partnerships

ABS firms should prepare documentation on non-lawyer owners’ roles, oversight, and risk management. LLPs often provide member guarantees alongside a debenture, while partnerships may face joint and several liability structures. Clear capital policies and sustainable drawings support approvals.

Security and guarantees

For unsecured working capital, many lenders still require personal guarantees from equity partners or directors. Larger facilities may involve a debenture over the firm and, for asset finance, a charge over specific equipment. For WIP or case finance, security may include assignments over case proceeds, subject to rules and client consent.

Personal guarantees and debentures

Guarantee requirements vary by lender, facility size, and profitability. Demonstrating robust cash generation and a healthy capital base can reduce security intensity. Clear, fair disclosure of guarantee obligations is essential and should be reviewed by the firm’s partners.

Compliance, AML, and operational controls

Expect scrutiny of your AML framework, PEP/Sanctions screening, source-of-funds checks, and file audit processes. Lenders value independent compliance audits and evidence of partner-led oversight. Documented policies for conflicts, undertakings, and client account reconciliations provide additional comfort.

Accreditations and audits

Lexcel, CQS, or ISO certifications can enhance credibility, especially where they link to measurable process controls. Annual SRA accountant’s reports with clean findings are highly influential. Where there were exceptions, provide a timeline of remediation and current compliance confirmations.

Documents checklist and how to strengthen your case

What lenders usually ask for

• Last 2–3 years’ statutory accounts and the latest year-to-date management accounts.
• 12 months’ business bank statements and details of existing facilities.
• Aged WIP and aged debtor schedules with commentary on balances over 90/120 days.
• PII schedule, insurer details, premium certificate, and claims history.
• Latest SRA accountant’s report and practising certificates for partners/directors.
• HMRC status for VAT, PAYE/NICs, and corporation tax, including any Time To Pay agreements.
• Business plan and cash flow forecasts covering the next 12 months.
• Partner/member CVs, organisational chart, and ownership structure.
• Key policies: AML/CTF, client money handling, conflicts, credit control, and billing.

How to improve eligibility in 30–60 days

• Accelerate billing with interim invoices and tighten credit control to reduce debtor days.
• Ringfence and clear HMRC arrears or formalise a Time To Pay arrangement.
• Prepare a concise funding case: why you need the facility, how it’s repaid, and downside mitigations.
• Reconcile client accounts and resolve any exceptions ahead of underwriting.
• Document pipeline visibility with matter lists, fee-earner targets, and utilisation ratios.
• Evidence panel stability and referral sources for conveyancing and lender panels.
• For litigation funding, collate cohort analytics: win rates, average settlement time, and ATE coverage.

Common pitfalls to avoid

• Submitting incomplete packs or unbalanced forecasts without cash flow stress tests.
• Understating lock‑up or omitting older WIP and debtors that will emerge during diligence.
• Leaving PII renewal to the last minute or accepting substantially higher excesses without mitigation.

When a specialist legal lender helps

Generalist lenders may struggle with WIP-heavy firms or contingent-fee models. Legal-specialist providers understand case lifecycles, ATE structures, and panel dynamics. They often price for sector risks but can be more flexible on lock‑up and case maturities.

Funding types solicitors qualify for and how matching works

Popular facilities and typical criteria

• PII premium finance: active cover, clean claims history, and affordability evidenced by cash flow.
• VAT and tax loans: clear HMRC position, strong bank conduct, and predictable fee income.
• Unsecured working capital loans: 12–24 months’ trading, stable margins, partner guarantees, and lock‑up discipline.
• WIP/case finance for litigation: case track records, ATE arrangements, independent counsel opinions for larger tranches, and staged drawdowns.
• Invoice finance for corporate or insurer-billed work: assignable invoices, low dispute rates, and debtor quality with concentration controls.
• Asset finance and leasing: equipment identification, supplier quotes, and serviceability from recurring income.

What our platform does — and what we don’t do

Best Business Loans is an independent introducer that helps established UK firms connect with relevant finance providers. We do not supply loans, give regulated financial advice, or guarantee eligibility or approval. We typically support incorporated firms and partnerships rather than start-ups or sole practitioners.

How AI matching supports solicitor firms

Our process analyses your case mix, lock‑up metrics, and regulatory profile to suggest suitable provider types. You can then compare options and engage with lenders or brokers who actively support legal practices. It is free to submit an enquiry and there is no obligation to proceed.

To explore sector-specific options and considerations, visit our page on solicitors loans. It explains legal-industry funding routes and what information helps speed up decisions. You can start a Quick Quote from there in minutes.

FAQs — quick answers for busy partners

Do lenders fund sole practitioners?

Some do, but many prefer multi-partner firms due to key-person risk and continuity. Our platform primarily supports established firms with multiple fee earners. Eligibility always depends on the specific lender’s policy.

Will lenders accept client account money as security?

No, client funds must never be used as security. Security is usually taken over the trading entity, specific assets, or via partner guarantees, in line with SRA rules and facility terms.

How important is PII in underwriting?

Critical. Underwriters review cover limits, insurer quality, claims history, and renewal timing. Clean records and timely renewals can improve terms and speed.

Can a conveyancing-heavy firm still qualify?

Yes, but lenders will assess panel stability, fall-through rates, AML controls, and market exposure. Demonstrating diversified referrers and strong controls helps.

What credit score is needed?

There is no single threshold, as lenders assess overall risk including accounts, conduct, and governance. Clean director/partner credit files and no recent CCJs are strongly preferred.

Is ABS ownership a problem?

Not usually, provided governance and compliance oversight are clear. Lenders may seek additional information on non-lawyer owners and decision-making controls.

How fast can funding be arranged?

PII or VAT loans can complete in a few days with a complete pack. Working capital, WIP, or invoice finance may take 1–4 weeks depending on diligence and security.

In short — key takeaways for partners

• Maintain impeccable regulatory standing and PII, with clear claims and renewal records.
• Control lock‑up, shorten debtor days, and document cash conversion with aged reports.
• Show balanced case mix, stable fee-earner utilisation, and pipeline visibility.
• Prepare a complete, consistent pack with management accounts, forecasts, and policies.
• Expect PGs and sector-specific security, especially for WIP/case finance.

Next steps — check eligibility and compare options

Submit a Quick Quote to see which lenders or brokers are currently active for your profile. You will get a no-obligation introduction to relevant providers who understand the legal sector. Credit is subject to status and affordability, and terms vary by provider.

Compliance notice

Best Business Loans is an independent introducer and does not provide loans or financial advice. Information on this page is general and is not a recommendation; always assess suitability and risks before proceeding. All promotions aim to be clear, fair and not misleading, and providers will share key information and costs before you decide.

Updated

October 2025. Criteria and lender appetite can change; we recommend refreshing your enquiry if more than 60 days old.