Finance options for professional services firms

Accountants, lawyers, consultants, engineers, architects, marketing agencies, IT firms — professional services businesses all share one financial quirk. What you sell is your people’s time and expertise, and you usually pay those people well before your clients pay you.

That gap has a name in many firms: lock-up. This page helps professional services owners understand where cash gets stuck and which kind of funding fits which need.

Where does cash get locked up?

• Work in progress. Hours worked but not yet billed — especially on milestone or fixed-fee projects.
• Debtors. Invoices sent but not yet paid, often on 30-day terms that stretch to 60 or more.
• Wages first. Salaries, and super, are paid on a fixed schedule no matter when clients pay. From 1 July 2026, Payday Super means employers pay super at the same time as wages, so it reaches employees’ funds within 7 business days.
• Growth hires. New staff cost money for weeks or months before they’re fully billable.
• Periodic investments. Office fit-outs, software, equipment and professional development.

Which option suits which firm need?

What you need	Tends to suit	Why
Paying staff while invoices are outstanding	Line of credit	Draw during the lock-up period; repay as fees come in
Hiring ahead of confirmed work	Unsecured loan	Covers the ramp-up period
Office fit-out or relocation	Term loan, secured or unsecured	One-off investment with a long payback
Buying into or out of a partnership	Property-secured loan	Larger amount, longer term
Acquiring another firm or client book	Property-secured loan	Significant amount; history helps
Clearing a tax bill	Case by case	Lodge on time regardless

Planning to grow the team? Our hiring guide walks through how to fund a new hire until they pay their way.

What do lenders look at for a professional services firm?

• Bank statements showing fee income and how the firm handles quieter months.
• Debtor ageing. How long clients take to pay, and whether any large invoices are overdue.
• Client mix. Concentration on one or two clients is worth explaining.
• Lodgements. BAS and tax returns up to date.
• Partner or ownership structure. Especially relevant for buy-ins and succession.
• Property, where larger amounts are involved.

Want a real person to look at your firm’s position? Start a 60-second enquiry — no credit check when you first enquire.

How do you shrink lock-up before you borrow?

Funding lock-up is useful, but reducing it is even better. Every day you shave off means less money needed:

1. Bill as you go. Move fixed-fee projects to progress billing where you can.
2. Invoice promptly. Monthly billing that happens on the 15th instead of the 1st costs two weeks of cash every month.
3. Tighten terms. Clear payment terms in engagement letters, and follow-up processes that actually run.
4. Ask for retainers or deposits. Common in many professions and completely reasonable.
5. Chase the old stuff. business.gov.au has practical steps for recovering unpaid invoices.

An illustrative example

Illustrative only. A small engineering consultancy has eight staff. Most projects bill on milestones, and a large government-funded project pays 30 days after each milestone is approved. Every quarter there’s a stretch where wages have gone out for two months with little coming in.

The firm’s funding plan ranks a line of credit first, sized to cover roughly one milestone’s worth of wages. It also flags two process changes — interim billing and earlier invoicing — that could shrink the gap. Its prep checklist includes debtor ageing, six months of statements and the major project contract.

Is it worth borrowing to buy a client book or another firm?

Acquisitions can be a fast way for an established firm to grow, but they’re not simple. Ask how much of the income is likely to stay after the change of ownership, how long it will take for the acquired revenue to repay the funding, and what integration will cost in time and money. Our guide to explaining your business to a lender helps you frame an acquisition case clearly.

Should partners fund growth personally or through the firm?

In smaller firms, partners often fund growth by leaving profits in the business or contributing personally. That works until it doesn’t — a partner needs their drawings, or the growth outpaces what the partners can put in. Business finance lets the firm fund its own growth on its own track record, keeping partner contributions for when they’re genuinely needed.

It’s worth agreeing, in writing, how the firm will fund growth, what level of borrowing partners are comfortable with and who provides any guarantees. Those conversations are much easier before the firm needs the money than during a busy quarter.

What about work in progress on large projects?

Large fixed-fee projects are where lock-up gets deepest. Negotiate milestone billing up front, track hours against each milestone weekly, and invoice the day a milestone is signed off. A firm that bills promptly on milestones often needs a far smaller limit than one that waits for project completion.

Professional services owners: let’s unlock your cash

Your firm’s value is in its people and its work — funding should support both. We’ll help you work out whether you need a flexible limit for lock-up, a loan for a one-off investment, or something larger for a buy-in or acquisition.

The enquiry takes around a minute, with no credit check at that point. We never scatter your details across a list of lenders; a real person reads your situation and calls you. Accurate answers — fee income, debtor days, what the funding is for — let us match you properly first time.

See what your firm could qualify for →