Texas Law Firm Financing: Everything You Need to Know About Law Firm Loans
February 06, 2025 | Last Updated on: February 06, 2025
By Nick Perry
Law is a competitive field, and many lawyers leave law school to attempt to climb a competitive corporate ladder. However, if you’re an entrepreneurial-minded lawyer, you might consider starting your own law firm. Starting and growing a law practice is a costly endeavor, and you might need a small business loan to get your business off the ground or financing to facilitate cash flow and encourage growth.
Loans for attorneys in Texas are available from both traditional and online lenders. If you’re considering loan lawyers in Texas, here’s a look at financing options for you.
In this article:
- How loans for attorneys in Texas can support your firm
- How to find loan lawyers near me
- How to get funding for your law firm
Why Your Law Firm May Need Financing
Although Texas is a relatively business-friendly state, it’s still expensive to operate a law office. Loans for attorneys in Texas can help with a variety of business needs, whether you need support for a case, are looking to expand, or need emergency funding. Depending on the type of business loan, you could use financing to:
- Manage periods of slow cash flow
- Invest in business growth
- Fund expansion into new practice areas
- Fund expensive cases
- Bridge the gap between operational costs and delayed client payments
- Offer better attorney fee structures for clients
Types of Loans for Attorneys in Texas
Depending on your business needs, what you can afford, and how you plan to use the money, there are several types of loans for lawyers in Texas. We break down some of the most common loan types here, and alternative financing options.
Term loans
One of the most common loans for attorneys in Texas is the standard term loan. Term loans are what you likely think of when you think of a loan. A bank, credit union, or other lender pays you an upfront lump sum amount of cash that you repay, plus interest, in monthly payments over a designated term.
Lenders determine your interest rate based on your creditworthiness, business history,financial statements, and the down payment or collateral you can provide. Term loans tend to have lower interest rates and longer repayment terms than other kinds of debt, but these terms are heavily influenced by your credit score.
Since you can use this funding for any purpose — from operating costs to real estate — these are great loans for attorneys in Texas with a range of financing needs.
SBA Loans
The United States Small Business Administration (SBA) offers several loan programs for small business owners. The SBA works with approved lenders to partially guarantee loans, thereby lowering the risk of default and incentivizing lenders to approve more borrowers. The tradeoff is that SBA loans tend to have strict eligibility requirements.
The SBA offers several programs that may serve as good loans for attorneys in Texas. The most common loan, the SBA 7(a), can fund up to $5 million, while even SBA Microloans can infuse your business with up to $50,000 of capital.
The application process is lengthy and rigorous but, if approved, SBA loans have competitive interest rates and favorable repayment terms.
Business Line of Credit
Business lines of credit are flexible funding options that law firms can tap into as needed. A line of credit gives you access to a maximum limit of capital, like the limit on a business credit card. However, you may withdraw cash from this line like a loan, only paying interest and fees on the amount you use. Most lines of credit are revolving, meaning once you repay the amount borrowed plus interest, you’ll have access to the full amount again.
Business lines of credit can help law firms manage short-term working capital needs, like paying an expert witness or covering operational costs in lean periods, or give you access to cash to capitalize on opportunities. They’re also a good safety net in case of financial emergencies.
Interest rates tend to be somewhat high on lines of credit, but they’re easier to qualify for than bank loans and provide the kind of flexibility that law firms dealing with long accounts receivable windows need.
Law Firm-Specific Lenders
There are some specialized lenders offering loans for attorneys in Texas. Due to their experience, they may tailor financing solutions to support day-to-day operations, fund new law firms, provide lawyer loans to clients in Texas, or help attorneys expand their legal practice.
Law firm-specific lenders recognize the financial challenges involved in running a law firm and can offer curated products like case cost financing or installment loans for class action or mass tort firms. Working directly with clients, law-specific lenders can work with you to determine your needs and find a financing solution that works for your business.
Key Considerations for Loans for Attorneys in Texas
Regardless of how much funding you seek, it’s imperative to always do your due diligence before taking on debt. Some of the key considerations to bear in mind while shopping for a loan include:
- Loan terms: Both long and short-term loans have benefits, but short repayment terms often mean a larger monthly payment, while long-term loans often carry higher interest rates and greater overall cost. Always assess fixed vs. variable interest rates, your monthly payment amount, and the total cost of a loan for attorneys in Texas.
- Funding needed: The amount of funding you need will impact what kinds of loan you should pursue. If you only need a small bridge loan, you may have more lenders willing to work with you, or you could leverage a line of credit. If you have lofty goals that require significant capital, you’ll have to do some additional due diligence to find the right loan for attorneys in Texas.
- How you’ll use the money: Some funding options are designed to be flexible, while others are more specific. If you need funding for a case, a law-specific lender may have unique financing options available. Real estate and equipment loans are great options for securing fixed assets.
- Eligibility: Lenders assess your personal and/or business credit score, current and past revenue, business history, business plan, and more in a loan application. Many lenders state their minimum requirements for certain loans outright. If you’re looking to buy real estate, equipment, or other fixed assets, it’s a good idea to explore a secured loan that uses those assets as collateral.
- How fast you need it: Traditional banks tend to process loan applications slower than online and alternative lenders. Some funding options are designed for fast processing within a few days, while traditional ones may take weeks or months. If you need emergency cash, your best option is likely a business line of credit, online business loan, or working with a law-specific lender.
How to Get a Loan for Attorneys in Texas
Getting a small business loan for a law firm is just like any other business loan process. The step-by-step process looks like this:
- Determine funding needs: We just broke down some of the key considerations, but it’s vital to think through a plan for the money before you apply. Not only will this help you plan better, but it could improve your chances of getting approved.
- Compare lenders: When you know how much you need and how you plan to use the money, you can begin shopping and comparing lenders and loan products.
- Gather documentation: Each lender has its own application requirements, but some of the most common documents you’ll need include tax returns, financial statements, business plan, and business documentation.
- Apply: Finally, when you’ve found the right letter and prepared your documentation, it’s time to complete a loan application and wait. Some financial institutions may want you to apply over the phone or in person, but many loans for attorneys in Texas may be processed entirely online.
Final Thoughts
Loans for attorneys in Texas can help your law firm get off the ground, expand, or navigate periods of financial difficulties. Just like any small business owner, you have access to a range of funding options, including term loans, lines of credit, and law firm-specific loan products. To find the right one, you must assess your funding needs, what you can afford to pay back, and compare lenders to lock in the best rates.
FAQs on loans for attorneys in Texas
Can lawyers get small business loans in Texas?
Yes, whether you’re a personal injury lawyer in Houston, a product liability lawyer in Austin, or offer any other legal services, you can get a loan for your law firm. Whether you’re waiting on contingency fees and need an influx of cash flow, or you want to acquire an existing firm, loans for attorneys in Texas can help you meet your business goals.
How do I find loan lawyers near me?
To find an attorney in your area, start by asking friends and family for recommendations. You can also use review sites like Google, Yelp, and AVVO to gather more testimonials.
If you’re looking for lenders, you can do the same thing. In addition, don’t be afraid to call and speak to loan officers to understand their financial services products better.
How do you get a loan for attorneys in Texas?
To get a law firm loan in Texas, you should first figure out how much you need, how you plan to use the money, and how fast you need funding. From there, you can research and compare lenders to assess your eligibility and explore the best loan products. When you’re ready, gather the necessary business documentation, apply, and wait for approval and funding.
