What is a CPA Loan?

by | Jul 20, 2022 | Resources | 0 comments

There are over 1 million accountants in the United States. CPAs or certified public accountants are in high demand both for individuals and also for companies that are now outsourcing this particular function of their business. More and more CPAs are being hired by small businesses to handle their accounting and bookkeeping needs.

If you are just beginning your CPA business, or even if you’re a seasoned veteran, you may find that you need additional cash. But where do you turn? Especially in this somewhat difficult economic market, how do you get a CPA loan?

Accountant and CPA loans

There are a variety of financing options to choose from when it comes to finding a CPA loan. You can also turn to a variety of lenders as well – from conventional banks to credit unions to crowdfunding platforms to online lenders.

Below are just a few of the available CPA loan products that you might consider looking into for your firm…

Business line of credit

Generally, a business line of credit is going to be a revolving loan option. That is to say, you draw from the line the amount you need and then once you pay it back, it is again available for you to use. The great thing about a business line of credit is that you only pay interest on the amount you draw, not on the total allotted amount. For a CPA firm, this could be an ideal option. And they tend to be easier to qualify for than some other loan types.

SBA business loans

For those who have been unable to qualify for certain business loans up to this point, looking into an SBA loan for your CPA firm might be the best way to go. Interest rates tend to be more favorable; however, there are certain benchmarks and criteria that you have to meet in order to qualify for an SBA loan. Keep in mind too, these loans can often take longer in terms of the overall process. The SBA essentially secures the loan up to a certain percentage. This way, if the company defaults, the lender does not lose as much as they otherwise might. This makes your application a less risky one.

Short term loans

As far as a CPA loan goes, looking into short-term business loans for your immediate working capital needs is definitely a good solution. Short-term loans can come with higher interest rates, however, you are paying it back over a much shorter period of time—generally less than a year or two. As with lines of credit, short-term business loans for CPA firms can be easier to qualify for. You definitely want to research the lender with whom you are working. All lenders are not created equal.

Equipment financing

Despite what many think, equipment financing is not just for heavy machinery or construction equipment. Technology, IT equipment, and various devices can all fall into the equipment financing category. Assess what your CPA firm needs. If in fact, you could use updated equipment, then you should consider looking into equipment financing for your CPA loan needs.

Preparing Your CPA Loan Application

The key to a successful loan application process is to be prepared. In other words, ensure everything is updated and ready to go upon the lender‘s request. This will make the process faster and more streamlined.

Check your credit report, make sure everything is up-to-date, and there are no errors. Gather business and personal tax returns from the past 2 to 3 years. Also, be ready with bank statements – up to six months’ worth. They might also ask to see any business leases or permits and licenses. The more information and documentation you have ready to go, the better your chances of loan approval.

First Union is Here for You

We offer a variety of loan products for all sorts of businesses across the United States. From salons to medical practices to CPA firms, we have helped numerous small businesses quickly get the cash they need. Unlike conventional banks, we get our clients funded within 2 to 3 days. Yes, we really do work that quickly. If you require additional working capital, call today and let’s get started.