Attorney Funding: The Essential Guide to Business Loans for Law Firms

Male attorney holding thick case file in front of shelf of legal files and paperwork

Understanding your funding options and applying for the right small business loan for your business can be confusing. Our Industry Funding guides make it easy to compare your funding options and choose the right loan for your business, whether you’re just starting up or are looking to grow an existing business.

Getting Started with Law Firm Funding

Whether you’re looking to start your own firm, shore up your existing practice’s cash flow, or fuel your growth, law firms of all sizes and specialties can benefit from an infusion of working capital.

Attorneys and law practices face a number of unique challenges, including:

  • Office space: Law firms, whether they’re a solo practice, a boutique firm, or a large full-service firm, need to present a professional, credible image, which means they need an attractive and well-furnished office space with reliable technology and a comprehensive library of law resources. This infrastructure can be costly, and prioritizing these purchases can be a difficult financial decision for new or smaller practices.
  • Billing models: Courtroom trials and other cases can be expensive and time consuming, and may take years to pay out depending on whether you use a retainer model, an hourly rate, contingency, or bill by installment. Litigation firms and transactional firms can both face additional financial challenges while a case is in progress, including cash flow limitations and lack of access to working capital.
  • Marketing: Successful law practices need to do more than simply rely on referrals from past clients or other lawyers—they also need to take the time to identify their ideal client and create a marketing plan to reach their audience. Both offline and online marketing strategies are effective for law firms, but each require a financial investment to kickstart.
  • Continuing education: Some jurisdictions require practicing lawyers to complete a certain number of continuing professional development hours every year to maintain and enhance their understanding of legal topics such as professional responsibility, ethics, practice management, procedural law topics, and other related skills.

Law firm funding can help practices of all sizes meet these challenges and continue to grow.

Attorney Funding Options

Long and short-term law firm funding options are available, including:

  1. SBA business loans for law firms
  2. Bank loans
  3. Private equity funding
  4. Alternative funding
  5. Lines of credit
  6. Lawsuit funding or litigation-based financing

Let’s take a closer look at these options.

1. SBA business loans for law firms

SBA loans are technically provided by intermediaries such as banks, credit unions, non-profit organizations, or Commercial Development Companies (CDCs), but are guaranteed (usually up to 80%) by the Small Business Association (SBA) in the United States or Business Development Bank (BDC) in Canada.

These loans are often the preferred loan for many small businesses, including law firms. The risk to the lender is lower because they are guaranteed by the federal government, which means this type of funding often comes with lower rates and better terms for borrowers. However, the application process for SBA funding is much more rigorous than other forms of law firm funding, with extensive application forms that often require years of detailed business and personal financial information. It can take weeks or months to process your application and there’s no guarantee of approval. Most applicants are rejected, especially those with low credit or those seeking a short-term loan.

SBA loans are available for both start-up and existing law firms. Several SBA loan options are available, but there are typically two types of SBA loans that are ideal for law firms:

  1. 7(a) Guaranteed Loans: With fewer restrictions on how funds are used, larger loan amounts, longer repayment terms, and lower interest rates, 7(a) loans are the most commonly sought SBA business loan for law firms. These loans typically require collateral and follow similar guidelines to standard term loans. Loans up to $5 million are available, and are ideal for helping businesses meet short- or long-term needs as well as for starting, expanding, or acquiring a business. This program also includes Express loans, which have a much shorter turnaround time—36 hours or less—and typically don’t require collateral for loans under $25,000.
  2. 504 Local Development Company Program: 504 loans are long-term, fixed rate loans that are commonly used to acquire real estate or equipment such as computers or other technology. These loans are administered by CDCs through commercial lending institutions with the expectation that the borrowing business will create or retain jobs or uphold public policy goals such as supporting minority-owned businesses, revitalizing a business district, or rural development.


  • Lowest rates and typically better terms
  • Large loan amounts are available, up to $5 million
  • Most applicants are rejected, especially those with low credit
  • Extensive application requiring years of detailed business and personal financial information
  • Can take weeks or months to process with no guarantee of approval
  • Some loans restrict how you can spend your funds

2. Bank loans

While they may not offer rates as low as SBA loans, bank loans offer competitive terms and rates depending on the size of the loan and your credit history. Banks and other commercial lenders have strict lending requirements, but the requirements are not as restrictive as SBA loans—for this reason, bank loans may be easier to acquire than SBA business loans for law firms, especially if you already have an existing relationship with a commercial lender. However, similar to SBA loans, it can take weeks to find out if your bank loan application has been approved and approval is never guaranteed.

The anticipated revenue for a law firm can make these businesses an attractive candidate for funding compared to businesses in other industries, but it can still be difficult for law firms to get the funding they need from banks and other commercial lending institutions. Because banks prefer to grant loans to large, established businesses or loans for larger amounts, it can be especially tough for smaller firms or firms looking for smaller loan amounts to get attorney funding from a bank.



  • Low rates and good terms depending on size of loan and credit history
  • Slightly less strict application requirements than SBA loans
  • Many applicants are rejected, especially small loan amounts and applicants with low credit
  • Extensive application requiring detailed business and personal financial information
  • Can take weeks to process, with no guarantee of approval
  • Some loans restrict how you can spend your funds

3. Private equity funding

With private equity funding, you sell shares in your company in exchange for immediate capital. Typically, a private equity firm will purchase stock in a law practice in order to profit off that firm’s future growth—that means you won’t owe money if your business fails, but if you succeed, you’ll split your profits with your investors.

Depending on your goals, private equity funding may not be a viable funding option for private law firms. However, because it provides a cost-effective, low interest method of financing larger amounts, it can be ideal for expanding a law firm.



  • No funding to pay back if your business fails
  • Typically larger amounts
  • Ideal for expanding a law firm
  • Not ideal for private law firms
  • You’ll split profits if your firm succeeds

4. Alternative funding

Alternative funding from direct online lenders like Greenbox Capital is easier to acquire than SBA or bank loans for law firms, with flexible lending requirements as well as faster approvals—sometimes in as little as 24 hours. Multiple types of short- and long-term funding are available, including alternative small business loans, real estate collateral loans, and lines of credit, as well as non-loan forms of financing such as merchant cash advances, invoice factoring, typically with no limits on how you use your funding.

These lenders base your approval on the health of your business and are more lenient with credit records and financial documentation. They are also more likely to lend to newer businesses, though some will not lend to start-ups or businesses in operation for under 6 months. However, rates are higher than SBA or bank loans, often with daily or weekly repayment terms depending on the type of funding you’re seeking.



  • Faster approvals with funds deposited in as little as 24 hours
  • Easier lending requirements
  • No restrictions on how funds are used
  • More likely to fund younger businesses
  • Higher rates

5. Lines of credit

Business lines of credit are available from both banks and alternative lenders, typically for longer terms than short-term funding options like merchant cash advances. This type of attorney funding offers the most flexibility, allowing you to draw from and repay the line of credit whenever you need. You’ll only ever pay interest on the amount you borrow.

Lines of credit are ideal for accessing cash periodically, similar to a credit card but with better rates and higher limits (up to a specified maximum amount). This makes lines of credit a practical law firm funding option for responding to unexpected complications, purchasing new technology, or other major purchases that don’t require a larger loan but which can still strain your cash flow or require more working capital than you can easily access.



  • Only pay interest on the amount you borrow
  • Draw and repay funds as needed
  • No restrictions on how you spend your funds
  • Lower rates and higher limits than business credit cards
  • Tougher application requirements
  • Lower amounts than other forms of funding

6. Lawsuit funding or litigation-based law firm financing

Lawsuit funding is a special kind of financing that is available only to law firms. With this type of financing, lenders will grant loans based on anticipated court case wins or settlements, typically for class action, medical malpractice, or other complex and expensive litigation—essentially, your lender will provide an advance on the funds you hope to win, and you’ll repay the loan based on the total amount you receive. Though it’s typically offered directly to clients, lawsuit funding is also available to firms.

Some lenders will require you to pay back the loan whether you win your case or not, while others will only charge interest if you don’t win so that you can make interest-only payments till you find another way to pay back the principle.

This type of funding typically features higher interest rates because the risk to the lender is greater due to the possibility of loss or recovering less than the amount advanced.



  • Possibility of interest-only payments in the event you lose your case
  • Higher rates due to greater risk to the lender

What is the Best Business Loan for Law Firms?

The best business loan for your law firm depends on your goals. Your attorney funding—including the amount you borrow and your repayment terms—should align with your business goals, and should ideally serve a specific purpose such as covering operating expenses or helping you invest in future assets like real estate.

For short-term funding, non-loan forms of financing such as merchant cash advances or online invoice factoring can provide a fast infusion of working capital that can help you bridge the gap between invoice payments, invest in marketing your law firm, or kickstart your growth.

For long-term funding, SBA 7(a) loans offer the best rates and terms, but they are extremely difficult to acquire. Bank loans are a good alternative, but if neither of these options are available to you, long-term funding like small business loans or collateral business loans from a direct online lender are a practical option.

For fast law firm funding, your best bet is always an alternative lender. These lenders can approve and deposit funds in as little as 24 hours, while SBA and bank loans can take weeks or even months with no guarantee of approval.

How To Use Law Firm Funding

Attorney funding can help firms face the unique problems lawyers face, including:

  • Longer billing cycles: Long accounts receivable periods and unique billing structures and revenue streams such as retainers or contingency payments can make it difficult for law firms to maintain cash flow, which in turn can make it difficult for your business to respond to unexpected challenges or continue to grow.
  • Technology: Old devices or outdated software can hinder your productivity and your ability to advocate for your clients. New technologies such as electronic discovery have also shifted the legal profession by increasing complexity and operating costs.
  • Data security: In addition to consistently following data privacy best practices, law firms face the additional challenge of maintaining an up-to-date data security threat model. Firms must have a secure, ideally cloud-based client record management system with backup and disaster recovery systems in place as well.
  • Licensing and registration: Whether you’re a solo practice, a boutique firm, or a large practice, bar registrations, association dues, and other licensing and registrations fees must be kept up to date for all practicing lawyers.
  • Services offered: Clients are demanding more of their law firms, including extra expertise in areas specific to their industry, as well as data privacy and security, financial expertise, and regulatory or compliance information.
  • COVID-19: An essentials-only economy has resulted in a reduced need for some legal services, particularly direct-to-consumer services. Courthouse closures have also particularly impacted plaintiff’s side litigators, who tend to take more cases on contingency and have less predictable cash flow.

Attorney funding can be used for more than simply surmounting the problems lawyers face—it can also be used to grow or expand your business, such as:

  • Purchasing real estate: Lower your fixed costs by ensuring your payments don’t increase over time, or take advantage of the freedom to customize your office space to suit your unique needs. If you have extra space, you can also rent it out and create a second revenue stream.
  • Acquiring another practice: Expand your business without starting from scratch by acquiring an existing practice.
  • Hiring staff: Increasing your workforce can enable you to take on more cases and provide the highest level of service. Bookkeepers, additional attorneys, paralegals, office managers, reception staff, and business development specialists can all help your firm grow. You can also use attorney funding to hire experts or additional support staff to help with a particular case.
  • Building a client-focused firm: From a seamless, stress-free on-boarding experience to capturing client feedback after a case is closed, the best thing you can do to support your business’s growth is build a culture that focuses on client satisfaction first. This can include things like putting a communication system in place that works for clients (using client-friendly language, for example), as well as designing rates and fees based on client needs and creating documented systems and procedures to reduce mistakes, better manage your team, and maintain productivity.
  • Continuing education: Invest in continuing education and training to keep your staff on the cutting edge.
  • Marketing: Create or expand a marketing and advertising campaign to help draw in new clients.

How To Apply For Law Firm Funding

Attorneys and law firms are often considered to be a more desirable loan applicant because the legal profession is typically a high-paying field. However, some of the problems lawyers face can make it difficult to acquire funding. Here’s what you need to know before you apply for a business loan for your law firm:

  • Revenue and billing structures for law firms can result in inconsistent cash flow even if your revenue is strong throughout the year, which can make it difficult to get approved for attorney funding. Requesting payment up front, billing clients quickly, offering discounts for early payment, and making it easier for clients to pay can all improve your cash flow.
  • Depending on the ownership structure of your firm, you may need to provide personal guarantees from all firm owners, including personal financial statements and personal tax returns for 3-5 years. Collecting and organizing this information for multiple owners can be difficult.
  • Some lenders may require access to your firm’s trust account to get a full understanding your firm’s financial standing. If access to your trust account is required, client information will be kept completely confidential.
  • You may need to supply a business plan that explains how you intend to use the loan as well as how you plan to pay it back. Business plans will be necessary for SBA loans and often bank loans, but are not always required for alternative lenders (though it’s always a good idea to have one prepared just in case).

Here’s the process you can expect to follow when applying for attorney funding:

  1. Identify why you need funding: Some applications also require you to include a purpose statement. Otherwise, knowing how you intend to use your funds will help you and your lender determine what type of funding will work best for your practice. Lending options for start-ups, for example, will differ from the options available to established businesses looking to grow.
  2. Determine how much funding you need and how much you can afford: Most lenders have minimum and maximum funding amounts, and it’s important that you take the time to determine how much funding you can actually afford before you apply.
  3. Review your credit reports: Most lenders will request your credit score before they review or approve your law firm funding application. Traditional lenders and SBA-backed loans have stricter credit score requirements, while alternative lenders focus more on cash flow and the overall health of your business.
  4. Research loans you’re eligible for: Your business likely won’t be eligible for every type of attorney funding. Researching the loans you’re eligible for will help you compile the right information and application requirements.
  5. Collect your documentation: Exact documentation requirements will depend on the type of funding you’re applying for.
  6. Submit your application: Traditional lenders will take longer to review your application—sometimes weeks or even months—while alternative lenders will respond much faster. Greenbox Capital will respond to your initial application in less than one hour during normal business hours.
  7. Review your offer: If your application is approved, your lender will supply an offer package detailing the terms and conditions of your loan, including loan amounts, rates, terms, and other fees. Read your offer carefully and make sure you understand all the conditions and costs before you sign.

Frequently Asked Questions

How much money do you need to start your own law firm?

You’ll typically need between $5,000-$15,000 to start your own law firm according to, an online resource for law firms. These funds are necessary to cover start up costs such as office space, professional expenses, legal software, and marketing. That said, Lawyerist also notes that most attorneys had less than $5,000 when they started their firm.

What is lawsuit funding?

Lawsuit funding, also called settlement loans or pre-settlement funding, is a type of financing in which an individual or a firm will seek funding to support the costs of legal proceedings or to maintain financial stability over the course of the longer case. Lawsuit funding is typically granted to individual clients, but is available for law practices as well.

Lawsuit funding is common for cases such as:

  • Personal lawsuits (assaults, work-related injuries, etc.)
  • Car accidents
  • Injuries sustained on public or private property (such as slip and falls)
  • Medical malpractice
  • Civil rights violations
  • Employment-related incidents
  • Inheritance of estate settlements

Lawsuit loans are only available through lenders that specialize in this type of financing and cannot be obtained through the SBA, banks, or alternative lenders.

Do law firms qualify for SBA loans?

Yes, law firms qualify for SBA loans. Because of their expected higher-than-average revenues, law firms may be more likely to receive SBA funding than other industries, especially if they are well-established and have a strong financial history.

Do law firms qualify for PPP loans?

No, law firms do not qualify for PPP loans, but this is only because the Paycheck Protection Program is no longer available to businesses in any industry as of August 8, 2020. Law firms would have qualified for PPP loans while the Paycheck Protection Program was available.

Greenbox Funding Options for Attorneys

Get the law practice funding you need

As an alternative lender, Greenbox Capital® can approve more law practice loans than traditional lenders. We can also approve your law practice funding faster, with funds deposited in as little as 24 hours. We provide several types of small business funding to help grow your law practice, with funding from as low $3,000 up to $500,000.

Greenbox Capital® funds all legal specialties. Our expert Funding Advisors will work closely with you to determine which funding option will help you achieve your goals without compromising your practice’s cash flow.

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