Professional Finance for Architects
Boost cash flow and access the funds you need to grow your architecture practice.Speak to one of our experts020 4525 5312
Supporting your practice
- Asset finance
- Practice loans
- Buy into an existing practice
- Start up a practice
- Help to acquire your premises
- Commercial mortgages
- Bridging loans
- Deposit funding
Support your clients
- Help your clients find funding - and gain an additional income stream
- Auction finance
- Development finance
- Refurbishment finance
Loans for Architects
As an architect, you routinely deal with high-cost projects with budgets in the millions. But whether you are starting up, already established or ready for growth or acquisition, managing cash flow and securing funding for your own practice can be challenging.
Having the right finance for your practice can save you money, and help you meet your objectives faster. At Rangewell we work with architects across the UK. We help them find the financial solutions that they need.
Table of Contents
Whether that's supporting you to open your very first practice or bridging the gap between client payments with invoice finance, we're here to help. Our team of independent financial advisors will help you with every step of the application process, including identifying the best funding options to suit your needs and pairing you with lenders who understand how you work.
Finding the funding solutions suitable for architecture firms isn't always easy, and knowing which lender to choose is a challenge in itself. By working with Rangewell, we've worked with architecture practices to find and secure the loans they need to grow - so we're well-placed to help you, whatever your unique circumstances.
Get in touch with Rangewell today to apply for loans for architects or keep reading to learn more about the funding solutions that may be available to you.
Dealing with cashflow challenges
Cash flow may be a problem for architectural practices for several reasons.
Your business has fixed costs
Your offices, staff, and other overheads will be regular fixed costs. They are unlikely to show much variation, even when your business is centred around long contracts with distant end dates.
Your clients' needs are unpredictable
The nature of the profession means that there will inevitably be slow as well as busy spells.
Getting paid can sometimes be a problem
A properly drafted appointment, recording all the terms of the agreement, is a binding contract, and should include provisions like the right to stage payments. Even it If no contract has been agreed, you are still entitled to payment of a reasonable fee, detailed in Section 15 of the Supply of Goods and Services Act 1982, provided that work was commissioned and not submitted speculatively.
However, although the legal position is clear, getting clients to make payments can still sometimes be a problem.
Long delays in getting paid can even mean that positive spells of business growth can be a problem they can mean more costs and larger sums to find while still facing the same wait for payments to arrive.
There are a number of solutions for cash flow needs.
Invoice finance may offer a solution for practices with cashflow issues.
Rather than having to wait for an invoice to be paid, it lets you take up to 90% of the value of each invoice immediately. The remainder will be paid to you, minus fees, once the customer settles the outstanding balance.
Invoice Financing provides an ongoing credit facility that protects you against late payment – because it ensures you get paid fast even when customers are slow.
Working Capital Finance
Working Capital Finance is often used to deal with overheads while business is slow during the early weeks and months, or during a slow season period of growth. It is a loan usually designed to be repaid in the short- to medium-term, once your recruitment business is fully profitable.
Larger scale lending can be vital to support cash flow if you have major plans such as taking on more staff or acquiring a competitor. Growth Finance is a type of lending that may be able to provide a solution. Lenders may require an established trading history and record of profits, but it may be possible to arrange Growth Finance based on your profit projections, rather than on your trading history.
Short term cash flow issues used to be dealt with by a bank overdraft. These days, overdrafts have become harder to get - fortunately, there are now some overdraft replacement products that work in a similar way.
Setting up your own practice
Setting up a new architectural practice means you will probably require an office. A serviced office will mean an upfront payment but will avoid any other costs. Renting a small independent office will mean acquiring everything from a desk and chair to a computer, and there will be overheads. You will have to cover electricity and business rates, and you will need funding in order to keep you in operation while you attract your first commissions.
Buying into an existing architectural practice
You may wish to buy into an existing practice as a partner, or even buy it outright. The costs involved may depend on the turnover of the practice as it stands, and its potential, based on its past performance and reputation.
Growing an architectural practice
If you have joined an existing practice as a partner or become the owner outright you will want to invest for the future. A website to showcase your projects, a presence at shows and conferences and content within publications may all be required to increase your brand awareness.
At Rangewell, we can provide solutions for all these needs.
Funding for your premises
Premises can represent a major investment for any business, but as an architect, you may have some additional needs. You may need natural light and space for client meetings, and storage for models.
You may also need a space that acts as a showcase for your own design skills.
Renting may be unavoidable in the early days of your practice. However, renting restricts what you can do with your space, means ongoing costs, and puts your practice at risk of rent increases. Buying premises with a commercial mortgage could actually decrease your monthly outgoings, provide your business with a valuable asset for the future, and give you more freedom to create the type of office you want to project to your clients.
Commercial Mortgages can help you buy or build your premises. It is uneconomic to borrow less than £50,000, and some lenders have a minimum of £75,000 or more, but there is no set upper limit.
Commercial Property Finance is arranged on an individual basis - but you should have no difficulty in securing preferential rates that reflect your professional status.
Remember, if you already own your premises, a commercial mortgage might also be a cost-effective way to raise funds to use elsewhere in your business.
Find out more about a Commercial Mortgage.
Asset Finance for the equipment you need
You may need a wide range of equipment in your architectural practice. The latest CAD and BIM system and large format printers will mean an investment of tens of thousands of pounds. You will also need the full range of conventional office equipment.
Either Hire Purchase, Leasing - or a combination - can help make virtually any type of equipment you need affordable. Asset Finance works by making the equipment or ‘asset’, the security for the loan itself. This means that if you were unable to repay, the lender could simply repossess it. This reduces the risk to the lender and, consequently, the cost to you.
Hire Purchase lets you spread the cost of buying high-cost equipment you will use for the long term. Arrangements generally last between 12 and 72 months. You pay a deposit plus fixed monthly instalments for an agreed term, after which the assets become yours.
Many equipment vendors, and particularly those in the IT sector, will often offer Hire Purchase facilities to support their sales. At Rangewell, we have found that arranging your own finance can be more cost-effective, saving you money to use elsewhere in your business.
Finance and Operating Leases
Leases work like a rental agreement and let you spread the cost of the equipment with no upfront payment. This type of finance could be the best option for equipment which will have a limited life, such as computer hardware.
Refinance existing assets
The equipment that your business already uses represents a considerable investment. Asset Refinance lets you reuse that investment to fund any aspect of your business, while still retaining full use of your assets. The finance company will buy the asset from you, providing you with a cash sum. You then buy the asset back, with a new finance arrangement.
You can use Asset Refinance to release cash, or to replace existing finance deals in order to reduce your monthly outgoings. Find out more here.
At Rangewell, we work with lenders across the UK market. We can help you find the most appropriate type of loan for a particular need, and the most competitive rates.
There are two main types:
- Secured Loans are ‘secured’ because the lender will require security in case you cannot pay the loan back. This could be your home or your business premises. Secured loans are a cost-effective way of borrowing large sums of money, of £250,000 or more.
- Unsecured Loans can be suitable for smaller sums, from £5000 upwards, although some lenders will not let you borrow more than one month’s turnover with an unsecured loan. You and your fellow directors or partners will also need to provide personal guarantees.
We can also help with a number of specialised loan products, including:
Tax Loans - helping deal with demands
Tax is inevitable, but a large quarterly VAT or annual tax demand can cause problems for your cash flow, particularly when it falls at the same time as other costs. Tax Loans help you to spread the cost of your tax demands into affordable monthly payments.
- Better control of cash flow
- Fixed monthly payments
- Quick and simple to arrange
- Avoids issues with HMRC, potential penalties and professional liabilities
Working Capital Finance - keeping your practice running
Working Capital Finance can help you stay afloat and pay staff in the early days of your practice while cash flow is slow. It is usually designed to be repaid in the short- to medium-term, once your practice is fully on its feet.
Growth Finance - helping you grow your practice
Large-scale finance can be vital if you have major plans such as acquiring a competitor. Growth Finance can help. Lenders may require an established trading history and record of profits, but it may be possible to arrange Growth Finance based on your profit projections, rather than on your trading history.
Get our help finding the most appropriate lending for your needs. Find out more about Growth Finance here.
Should you consider alternative business funding?
Many businesses may look at alternative business funding when they are looking to set up. Crowdfunding and Venture Capital can provide the funding you need, but risk high costs and the loss of control - a venture capital provider will take equity in your business, in effect becoming a part-owner. Fortunately, the new generation of lenders with a more flexible approach than traditional funding sources, and we can help you find the most appropriate funding for your needs.
Another way that Rangewell can help you
As an architect, you may be approached by a Property Developer looking to get a new project off the ground. Finding the necessary funding may be key to moving the project forward.
At Rangewell, we can help your clients find the finance they need, whether they are looking for a small loan for a minor refurbishment or funding for a multi-million-pound development.
We make no charge for our services - in fact, we could provide a valuable source of additional income for your practice.
Loans for architects from Rangewell
At Rangewell, our expertise works to bring you the financial solutions you need to capitalise on your business, whether you want to fund capital expenses, working capital or growth. Finding the most appropriate solution for your funding needs takes a thorough understanding, both of the lending market and the products available.
At Rangewell we have the expertise you need. We know the lenders who can offer the most competitive rates for professionals like yourself. Whether you have a straightforward finance need or require a more complicated ‘Jigsaw’ funding plan made up of a combination of products, we can work with you to find the answers that are right for your needs.
Call us now to get our experts working for you and the future of your practice.
Last update: 26 July 2022
Download Rangewell’s free and detailed guide to Finance for Architects
What types of finance are there for architects practices and which do you need?
Why not all providers are equal and why it's important to find the one that’s right for your royal charter architects business
How we can provide an additional income stream for your practice
Studying architecture is not easy, so here's why you shouldn't settle - look at how you can maximise your income with practice buy-ins and buyouts
Are there downsides to finance for my practice and how can I avoid them?
Download your Rangewell Business e-Book
Available in ePub, mobi and .pdf format
You may be interested in...
Architecture often extends to projects which are far broader than designing buildings alone. In the UK, architecture is...29 July 2022
Starting your own firm is a big step, but one that can help you shake off the limitations of another Principal architect...29 July 2022
In this guide, we’ll discuss the optimal way to sell your practice and give you insight into how your buyer’...28 July 2022