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SBA Loans for Accountants: What You Need to Know

Published on September 24th, 2019 by Shawn Andrews in SBA and USDA

We recently explored the top performing industries that have utilized the SBA 7(a) Loan Program to secure small-business financing, and among this group, Offices of Certified Public Accountants (NAICS Code: 541211) ranked #18 on our list.  Helping more than 3,100 firms from FY2010-2018, accountants have historically found the program to be one of the most popular ways to start or expand operations.

Ever 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 and 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 are necessary for businesses to stay organized with their finances.

Most Common Ways to 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 typically the ideal time to hire additional employees to efficiently serve the increasing 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 maximum 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 consultation 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 creates an opportunity for business acquisition.

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.

Key Statistics & Trends

Below are emerging trends, notable statistics and key takeaways surrounding the last decade of activity for accounting service companies through the SBA 7(a) Loan Program.

  • Volume Trends – In 2015, accountants received more than $103 million through the program, marking the highest fiscal year ever by dollar volume for the industry. Volume has since declined slightly year-over-year as trends have corrected to align more closely with that of the overall program.
  • 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 49.9% during this period ($182,222 in FY2010 to $271,793 in FY2018).
  • Top States – California, Texas and Florida ranked as the top dollar volume states respectively for accounting firm borrowers and Ohio followed thereafter with roughly $44 million, or 6% of the total volume for the industry (Ohio borrowers obtained roughly 3.5% of the total volume through the entire program during this same period).

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 must focus on operations and not stress about securing 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 experience staff, backup client accounts, store electronic documents and expand services.

About Windsor Advantage, LLC

Windsor Advantage provides banks, credit unions and CDFIs with a comprehensive outsourced SBA 7(a) and USDA lending platform.

Since 2010, Windsor has processed more than $2.3 billion in government guaranteed loans and currently services a portfolio in excess of $1.3 billion (as of May 31, 2019) for over 85 lenders nationwide. With more than 150 years of cumulative SBA and USDA lending experience, cutting edge technology, rigid controls and consistent processes, Windsor is uniquely qualified to assist any size lender with implementing a thoughtful and profitable government guaranteed lending initiative.

Windsor Advantage has a team of 30 professionals with offices in Chicago, Illinois; Indianapolis, Indiana; Seattle, Washington and Charleston, South Carolina.


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