A common issue for growing law firms, specifically those with long-term cases on their books, is having cash tied up in unbilled work in progress, unpaid bills and unbilled disbursements. Having the right kind of financial support allows a firm to manage cash flow and release funding for investment by generating money against unpaid invoices.
However traditional invoice finance is typically only available to businesses that sell products or services on credit to other businesses, so it is far more difficult for firms in the ‘paper professions’ to secure this type of facility. This is where United Trust Bank is able to help by providing loan facilities designed specifically around funding debtors and unbilled work in progress (WIP).
In November, the United Trust Bank Professional Lending team were approached by a regular introducer who wished to assist a long-established law firm which had seen a recent increase to both debtors and unbilled WIP. The client has been ranked as a Tier 1 firm in a wide number of practice areas by the Legal 500 and Chambers & Partners, so they were clearly a firm of considerable substance. They had also undergone a recent restructuring, so this combined with the growth in WIP meant that they had a fairly sizeable short-term working capital requirement. Fortunately we have a good existing relationship with the introducer, so it was a reasonably straightforward process to obtain all the financial information necessary and a solid understanding of the relatively complex structure of the group.
We were subsequently able to provide a swift credit approval and payment, which prevented the firm from stressing their existing working capital facilities.
Term: 12 months