Working Capital Loan Frequently Asked Questions

Strategic Finance for Law Firms

 

What does it cost? 

 

  • ACI’s Working Capital loan includes an annual fee based upon the size of the line and an annual interest rate that floats with the Prime and/or LIBOR rates as published in the Wall Street Journal.  Check with one of our financial advisors for current pricing by calling toll-free 1.877.894.9724.

 

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Is there an application fee or a collateral inspection fee?

 

  • No.

 

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Are there any legal fees?

 

  • As long as the loan is not in default, no.

 

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Are there any audit or field exam fees?

 

  • As long as the loan is not in default, no.

 

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Are there any pre-payment penalties?

 

  • No.

 

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Do you check my credit?

 

  • Yes. We do a standard credit bureau check on any law firm partner owning 20% or more of the law firm.  We normally use Equifax to pull a Beacon (FICO) score.

 

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Is there a renewal fee?

 

  • As mentioned above, there is an annual fee based upon the size of the line.  Current pricing on the Working Capital annual fee can be obtained by calling toll-free 1.877.894.9724.  Aside from the annual fee, there are no other renewal fees.

 

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What can the funds from ACI’s Working Capital loan be used for?

 

  • The funds from ACI’s Working Capital loan can be used for any commercial purpose at a law firm.  This includes, but is not limited to, case expenses, advertising, payroll, equipment, rent, tax payments, partner distributions, etc.

 

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How is interest calculated and billed?

 

  • Interest is calculated as “simple interest” (not compound) and billed once per month.  Borrowers using ACI’s Working Capital product make monlthly interest-only payments for as long as there is a balance on the loan.

 

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How long does it take to get approved?

 

  • The approval process normally takes 4 to 5 business days once all necessary documentation has been received at the ACI offices.

 

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When does the principal need to be paid back?

 

  • As long as the Working Capital loan continues to get renewed annually and is not in default, principal can be paid back whenever the borrower wishes.

 

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How often can funding requests be made on a Working Capital loan?

 

  • There is no limit.

 

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Is there a minimum amount that can be borrowed at one time?

 

  • No.

 

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Is there a maximum amount that can be borrowed at one time?

 

  • Other than the overall credit limit of the particular Working Capital loan, there is no limit on the size of a funding request.

 

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What is the collateral for a Working Capital loan?

 

  • The collateral is the accounts receivable of the law firm.  ACI must have a first position lien (UCC-1) on all of the law firm’s accounts receivable.  Also, without written permission from ACI, no second position liens on the law firm’s accounts receivable are permitted.

 

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Does the Working Capital loan require personal guarantees?

 

  • Yes.  Any partner owning 20% or more of the law firm will be required to sign a personal guarantee.

 

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Does a Working Capital loan require on site audits of the law firm?

 

  • As long as the Working Capital loan continues to be renewed annually and as long as the Borrower is not in default, there are normally no on-site audits of the law firm.

 

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Do I have to pay the loan down to zero once per year like my bank makes me do?

 

  • No.  ACI’s Working Capital loan has no annual pay down requirement, unlike many banks.