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June 5, 2020   /   West Town Bank & Trust

We recently explored the top-performing industries that have utilized the SBA 7(a) Loan Program to secure small-business financing. Among this group, Offices of Certified Public Accountants (NAICS Code: 541211) ranked #31, with more than 3,400 accounting firms getting help from FY2010-2019. Accountants have historically found the program to be one of the most popular ways to start or expand operations.

Although SBA 7(a) loans require the investment of time and effort, the overall benefits of the program outweigh the costs for many accountants running their own firm.  If you’re searching for a solution that will help provide the best quality services during tax season, 7(a) loans should absolutely be on your radar.  The primary benefits of the program include lower interest rates, longer repayment terms, and manageable fees in comparison to alternative commercial loan products.

Since the Great Recession, the number of businesses partnering with tax and accounting firms to track income, expenses, and taxable events has grown significantly as a result of more new businesses opening across the country.  While competition has certainly intensified with this growth, tax and accounting services remain an extremely attractive industry to lenders because these services provide necessary resources to help businesses organize their finances.

Most Common Ways Accountants Use SBA 7(a) Loan Proceeds

It’s important to make sure your firm has the bandwidth and resources to adhere to the increased volume of activity during tax season.  An external source of capital to assist with the specific needs listed below will help to ensure your business runs smoothly during tax season and beyond.

  • Human Resources – Tax season is the ideal time to hire additional employees to efficiently serve the increased number of clients. Professionally trained and knowledgeable staff is the most effective way to achieve excellent service and client satisfaction.
  • Technology – Cutting-edge software can help you manage your clients more efficiently, and security programs help ensure compliance maintenance of sensitive information. In addition, investments in your website during tax season can help maximize inbound leads and the number of appointments scheduled.
  • Expanding Services – As a professional intimately familiar with a client’s financials, stepping beyond tax preparation and bookkeeping into a consultative role has gained popularity in recent years, as it helps deepen and retain client relationships.
  • Business Acquisitions – If you own an accounting practice, you will likely sell or merge it within your lifetime. Changing demographics and the retirement of professional service firm owners create opportunities for business acquisition.
Loan Size: Similar to the average loan trends for the entire program, the average loan size for accountants has increased every year since 2010, growing at a rate of 113% during this period ($182,222 in FY2010 to $387,585 in FY2019).
Key Statistics & Trends

SBA Loans for Accountants

Before completing an SBA loan application, you should be familiar with the most popular ways accounting and tax service firms use SBA loan proceeds.  A clear and concise business plan helps increase the likelihood of lender approval.

The ability to provide above-and-beyond customer service during tax season can be difficult with so many accounting firms competing for potential clients.  Accounting professionals need to focus on operations and stress less about securing the working capital needed to execute on implementing service differentiators.  Entrepreneurs in hopes of starting an accountancy firm often overlook the need for funds to hire licensed and experienced staff, backup client accounts, store electronic documents, and expand services.

To get started with your SBA loan application, contact West Town Bank & Trust at (855) 693-8290.

About West Town Bank & Trust

At West Town Bank & Trust, our most important goal is to understand what’s important to you, what’s getting in your way, and what you hope to achieve, so we can help you get there. Since 1922, we’ve been creating long-lasting relationships with our customers based on old-fashioned values and future-thinking ideas.  Whether solutions come from surprisingly innovative tools or trusted products you’re familiar with, our single-focused purpose is your financial well-being.