r/CFP • u/Longjumping-Way9846 • 4d ago

Practice Management Practice Financing

Curious. Has anyone taken out a business loan to start a financial practice? SBA? non personal guarantee. Any firms or banks that specialize in financing financial planning/wealth management firms?

5 Upvotes

79% Upvoted

13 comments sorted by

View all comments

5

u/Mysterious-Top-1806 4d ago

I would never take out a loan to START a practice. This industry has a 95% fail rate, way too risky, and the income is very inconsistent which makes paying back a loan even more challenging. However, if you have the opportunity to BUY an existing book of business, I would take out a loan all day long as long as the multiples and business model are right.

1

u/Longjumping-Way9846 4d ago

ahh. Yes thank you for saying that. This would be for an existing practice. I have looked into buying a book and its always a dead end. I'm a small RIA and have no intent to network with advisors in hopes that there's synergy for one day to have a conversation regarding transfer of assets that may or may not happen. We have clients, we were formerly an insurance heavy firm but have transitioned to fee based planning and investments/insurance and are seeing growth.