Which funding products does this apply to?

Working Capital, Term Loan, Business Line of Credit, SBA Loan, Invoice Financing. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Is this specific to professional services?

It is written around how a professional service business actually generates and collects cash, which is what makes its funding problem different. The mechanics transfer; the arithmetic may not.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

Is this financial or legal advice?

No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

Can I reuse this content?

Quote a paragraph with a link back. Do not republish whole articles.

Professional services funding: unbilled WIP and no collateral

Professional services funding: unbilled work, realisation and no collateral at all

Your inventory walks out at six each evening and your only asset is a promise to pay for advice. Both facts show up in the price of your money.

By Find Me Funders research desk Updated 14 September 2026 999 words 4 min read

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

A firm that sells time has almost nothing a lender can take. No equipment worth repossessing, no inventory, no titled asset, and the people who generate the revenue can leave. What you have is a pipeline, a client list, a receivables ledger and a reputation — and only one of those is collateral in any conventional sense.

The three-stage lag

Money in a professional firm moves through three stages, and each one is a place where cash gets stuck.

Work performed, not yet billed.Time recorded, or a project phase completed, sitting in work in progress. On a monthly billing cycle, work done on the 2nd waits four weeks before it even becomes an invoice. On a milestone contract it can wait far longer.

Billed, not yet collected.Now it is a receivable, subject to the client's payment habits, their procurement process, and whatever invoice query they raise on day 29.

Written off.The gap between what you recorded and what you collect: scope creep absorbed rather than argued, courtesy discounts, time a partner decided was not billable, and bad debt.

Firms manage that stage least well, and it determines the value of everything upstream. Your realisation rate — collected fees against recorded value — is the multiplier on your whole pipeline, and worth knowing to a percentage point before you talk to anyone about money.

Why unbilled WIP is difficult to borrow against

An invoice is a claim you can assign. Unbilled work in progress is your own assertion that a client owes you for something you have not yet asked them to pay for. It has not been agreed, it has not been accepted, and in some engagement types it can be reduced or challenged. Its liquidation value to a third party is close to nothing.

So most facilities exclude it. There are exceptions at scale and in specific structures — some asset-based lenders will include a modest, heavily discounted WIP component where the engagement letters are strong and the billing history supports it — but the working assumption should be that WIP is not collateral.

The practical response is operational rather than financial. Bill more often. Moving from monthly to fortnightly billing on a firm's largest engagements shortens the whole cycle by weeks and costs nothing but administrative discipline. Take retainers or advance payments on new clients. Bill milestones on project work at the milestone, not at completion.

What "no hard collateral" does to your pricing and your paperwork

If there is nothing to secure the debt against, three things follow, and they are not punishments:

Personal guarantees are close to universal.Expect them from every owner with a meaningful stake. Read them for whether they are joint and several, whether they are capped, and whether they survive your exit from the firm.

The underwriting shifts to cash flow.Debt service coverage, revenue stability, client concentration, the length of your client relationships and the depth of your recurring work. A firm with recurring compliance or retained advisory work is a substantially better credit than one that sells discrete projects, even at the same revenue.

Documentation is heavier, not lighter.Personal financial statements, tax returns, engagement letters, an aged ledger. A lender with no collateral compensates with information.

Some professions add a layer: state law may restrict ownership of the practice entity to licensed individuals, which limits some structures and affects what a lender can take on a default. It varies by profession and state.

Partner buy-ins and buy-outs are the biggest financing event most firms have

Bringing a partner in, or paying one out, is where professional firms borrow real money. The asset being bought is goodwill and a client base. There is nothing to secure it against beyond the firm's cash flow and the guarantees.

SBA-backed lending is a common route for partner buy-outs and practice acquisitions for that reason; programme rules are published by the SBA and each participating lender applies its own overlay. Seller financing is the other common component, and a seller note subordinated to the bank debt often makes an otherwise impossible deal work.

The diligence that decides these deals is client transition: how long the departing partner stays, what the non-compete and non-solicit say and whether they are enforceable in your state, and how much of the revenue is genuinely institutional rather than personal to one individual.

Products that fit

A line of creditfor the billing cycle. The right instrument for the problem, and the one to pursue first.

A term loanfor buy-ins, buy-outs, technology or a fit-out.

An SBA 7(a) loanfor acquisition and partner transitions.

Invoice factoring, available in some structures, though less common and clients often notice.

Equipment financingfor the little equipment that exists.

Revenue-linked advancesare offered and are usually a poor match: receipts are lumpy monthly rather than daily, and a daily debit against a monthly collection pattern is a mismatch by construction.

What to have ready

Aged receivables, and unbilled WIP, reported separately
Realisation rate, and write-offs for the last two years
Client concentration by percentage of fees
Recurring versus project revenue split
Engagement letters for major clients
Financial statements and tax returns for the firm and every guarantor
Partner compensation, since a lender will normalise it to work out real earnings
Professional indemnity insurance details

What to ask, and what to refuse

Ask whether the guarantee is capped and can be released on a specified event. Ask how partner distributions are treated in debt service coverage. Ask what covenants apply and what happens if a large client leaves.

Refuse to take daily-repayment money against a monthly collection cycle. Refuse an uncapped joint and several guarantee without at least attempting to negotiate a cap and a several-only allocation. And refuse to buy into or out of a partnership without a written client transition plan, because the goodwill you are financing is the part that can walk.

Where this applies