Can You Buy an Accounting Practice Without Property Security?
- Josh Foo
- Jun 30
- 3 min read
Updated: 2 days ago
Accounting practices are one of the types of businesses where some lenders may consider acquisition finance based primarily on the recurring cash flow, goodwill and maintainable earnings of the practice, rather than relying entirely on residential or commercial property security.
That does not mean every accounting-practice acquisition can be funded without property. The outcome depends on the quality of the practice, the buyer, the purchase price and the proposed funding structure.
Why Can You Buy Accounting Practices Without Property Security?
Many businesses rely heavily on tangible assets such as equipment, vehicles, property or stock.
An accounting practice is different.
Much of its value may sit in:
recurring client fees
long-standing client relationships
goodwill
experienced staff
predictable earnings
established systems and processes.
If a lender believes those earnings are sustainable and transferable to the buyer, it may be prepared to lend against the business itself rather than requiring the acquisition to be fully supported by property. In this scenario, it is possible to buy an accounting practice without property security.
This is sometimes described as cash-flow lending or goodwill-based lending.
Does “No Property Security” Mean the Loan Is Unsecured?
Not necessarily.
This distinction is important.
A lender may not require the buyer’s home or investment property as security, but it may still require:
a General Security Agreement over the business
personal guarantees from directors
security over the acquiring entity
covenants or other lender protections.
So a better question is often:
Can the acquisition be funded without relying on real-property security?
rather than simply:
“Can I get an unsecured loan?”
What Will Lenders Look At?
Where property security is limited or unavailable, lenders generally place greater emphasis on the underlying business.
Important factors can include:
Recurring Revenue
An accounting practice with a high proportion of recurring annual fees may be more attractive than a business dependent on one-off engagements.
Normalised EBITDA
Lenders will want to understand the sustainable earnings of the practice after adjusting for principal remuneration, unusual expenses and other non-recurring items.
Purchase Price
The lender will consider whether the asking price is reasonable relative to the practice’s revenue, earnings and overall quality.
Buyer Experience
An experienced accountant or existing practice owner may present a stronger proposition than someone with limited industry or management experience.
Client Retention and Vendor Transition
The lender will want confidence that clients are likely to remain after settlement, particularly where the outgoing principal has strong personal relationships with the client base.
Can Property Security Still Be Useful?
Yes.
Even where the accounting practice can support a substantial amount of lending on its own, property can sometimes be used as additional support.
For example, a transaction might use:
cash-flow lending against the accounting practice
property security for part of the funding
buyer contribution
deferred consideration or vendor finance.
This is sometimes referred to as a blended funding structure.
The advantage is that the buyer may not need to rely entirely on either the practice or the property.
What If the Business Is Worth Less Than the Purchase Price?
A lender may conclude that the practice is financeable but still value it below the vendor’s asking price.
In that case, the shortfall may need to be addressed through:
additional buyer equity
available property equity
vendor finance
deferred consideration
renegotiation of the purchase price.
How Much Can Be Funded Without Property?
There is no universal percentage.
Different lenders assess professional-practice acquisitions differently, and borrowing capacity may depend on:
recurring fee revenue
normalised EBITDA
debt servicing capacity
purchase-price multiple
strength of the buyer
existing practice performance
transaction structure.
For this reason, the most useful question is not simply:
“What percentage will the bank lend?”
It is:
“How much debt can the acquired practice sustainably support?”
Considering Buying an Accounting Practice?
Fairlane Finance can help assess whether the acquisition may be supported primarily by the practice’s cash flow and goodwill, whether property security is likely to be required, and how the funding could be structured.
General information only. Seek appropriate legal, accounting and tax advice. Lending criteria vary.
