Industry
Operating cash for the months between taking a case and collecting the fee.
✓ Checking what you qualify for does not affect your credit score.
Legal services are on the commonly eligible list on our eligible industries page, which reads "Legal, accounting, engineering, architectural and IT consulting." Eligibility is checked at the NAICS level; law offices fall under NAICS 5411, Legal Services.
It is a large, established category. The Census Bureau's 2022 County Business Patterns count 181,941 legal services establishments in the United States employing 1,183,593 people. In South Florida alone there were 4,457 in Miami-Dade and 2,810 in Broward.
What makes law firms different is not risk but timing. A firm can be very profitable over a year and still be short of cash in a given month, because its largest fees arrive on a schedule set by courts, insurers and opposing counsel.
How a firm bills decides how its cash moves. The table below sets out the common models and the gap each one creates.
| Billing model | When the fee arrives | What the firm pays in the meantime |
|---|---|---|
| Contingency (personal injury, employment, mass tort) | When a case settles or a judgment is collected, often many months after intake | Payroll, rent, marketing, and case costs such as filing fees, records, depositions and experts |
| Hourly billing | Invoices go out monthly; clients pay on their own schedule, often 30 to 90 days later | Associate and staff salaries every pay period |
| Flat fee (immigration, estate planning, real estate closings) | Up front or in stages, tied to milestones | Staff time spent before later stages are paid |
| Retainers held in trust | Only as the firm earns the fee and transfers it under trust accounting rules | Operating costs, which cannot be paid from client trust funds |
Contingency timing is the sharpest gap. A personal injury practice may advance case costs for a year or more and carry a growing docket before a settlement lands. When several cases resolve in the same quarter, the firm is flush; when they slip, payroll still comes due.
Trust accounting matters too. Money in an IOLTA or client trust account belongs to clients until it is earned. Under ABA Model Rule 1.15 and the state bar rules based on it, a firm cannot borrow from it to cover operations. When we review bank statements, we read the operating account, not trust deposits, so keep the two clearly separated.
Hourly firms see the classic receivables gap: the work is done and invoiced, but collections lag. Growth widens every gap, because hiring an associate or opening an office costs money months before the new capacity produces fees.
| Need | Product that usually fits | Why |
|---|---|---|
| Case costs and payroll between settlements | Line of credit | Draw only when a gap opens; interest runs on what you draw; no cost to keep it open |
| One planned expense: an office build-out, case management system or new hire | Term loan | Fixed amount, weekly payments, 0% origination; pay off early when a big fee lands and save half the remaining interest |
| Firm already carries a merchant cash advance on daily debits | MCA refinance | Replace daily debits with a more predictable structure; $10,000 to $100,000 |
| Large unpaid invoices to institutional clients | Invoice factoring | Converts approved receivables into cash; see the factoring page for how it works |
The early payoff discount suits contingency practices in particular: if a large settlement arrives months into the term, paying the balance in full takes 50% off the interest still scheduled. Partial prepayments do not trigger the discount.
Term loans run 12 to 18 months with weekly payments, are capped at 15% of annual revenue and must be in first position; a full early payoff earns a 50% discount on the remaining interest. Lines of credit run 12 to 36 months, with a $10,000 minimum draw and no origination fee, maintenance fee or early payoff penalty. Details are on the business term loans and business line of credit pages; your offer governs.
The numbers below are illustrative only, using the lowest published line of credit rate. They are not an offer or a client story; your rate, fees and schedule are set in your offer.
A six-attorney personal injury firm deposits about $1,200,000 a year into its operating account and has two strong cases expected to settle within the year. It needs $50,000 to fund expert witnesses and depositions now. It has a $100,000 line of credit and draws $50,000, leaving $50,000 unused at no cost.
| Item | 12-month payback | 24-month payback |
|---|---|---|
| Draw | $50,000 | $50,000 |
| Draw fee (2.49%) | $1,245.00 | $1,245.00 |
| Monthly-equivalent payment at 1% per month | $4,442.44 | $2,353.67 |
| Interest over the full term | $3,309.27 | $6,488.17 |
| Interest plus draw fee | $4,554.27 | $7,733.17 |
Payment math assumes a fixed 1% monthly rate on a fully amortizing balance with no early payoff. Because a line has no early payoff penalty, if one of the cases settles in month five the firm can retire the draw and stop interest on what it repays. For a term loan instead, the 15% cap means a firm with $1,200,000 in annual revenue could borrow up to $180,000, within the $250,000 product maximum.
Tier 1: 650 FICO, 3 years in business, $300,000 a year or $25,000 a month, 8+ monthly deposits.
Tier 2: 600 FICO, 6 months in business, $60,000 revenue, $800 minimum daily balance.
Renewal: 550 FICO, 2 years in business, once 50% of the original balance is repaid.
The minimum FICO is 500. The 650/600/550 tiers are product criteria that decide which product a file is read against, not a floor on the business. Scores in the 500s are placed routinely and are read on revenue, deposit consistency and time in business rather than on the score alone.
Firms in South Florida can also read our Fort Lauderdale business loans page, where legal services are one of the largest local sectors, and the guide to how professional services firms qualify.
Yes. Legal services are on the commonly eligible list on our eligible industries page.
Yes. Uneven deposits are normal for contingency practices. We read revenue, deposit consistency and time in business, and context about expected settlements helps.
No. Trust funds belong to clients until earned. We review the operating account; keep trust and operating activity separate.
The minimum FICO is 500. The 650/600/550 tiers are product criteria that decide which product a file is read against, not a floor on the business. Scores in the 500s are placed routinely and are read on revenue, deposit consistency and time in business rather than on the score alone.
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