When a CPA buys another practice, a term loan pays the seller a lump sum at closing, and the buyer repays it in fixed monthly installments from the combined firm's fees. The seller's recurring fees and how many clients stay are what the partner weighs most.
An article from Grovewater Commercial Capital in Helena, Montana on financing the purchase of an accounting practice with a term loan. Lewis and Clark County, MT had 41 accounting, tax and bookkeeping employers in 2023 (County Business Patterns).
The Short Answer for a Helena, MT CPA Buying a Practice
A business term loan is the standard tool. The partner lends a set amount, the buyer pays the seller at closing, and the loan is repaid in equal monthly installments over an agreed number of months. Because a CPA practice is mostly client relationships, the loan often covers goodwill as well as furniture, computers and files, and the seller frequently carries part of the price as a note.
A smaller line of credit or working capital piece can sit beside the term loan for the transition months, when staff, software and client communications cost money before the combined fees settle.
Business Term Loan Requirements for Helena, MT CPA Firms
- The signed letter of intent or purchase agreement, showing the price and which assets, files and staff it covers.
- Three years of the seller's fee history, split into recurring and one-time work.
- How concentrated the book is: what share of fees the ten biggest clients pay.
- The buyer's own tax returns, financial statements and fee history.
- The transition plan: the seller's role, staff retention and the timing of client letters.
- The office lease, or the plan for combining offices.
Partners set their own requirements and may ask for more. Many also look at the buyer's personal credit and any personal guarantee.
Business Loans for Acquisition: What Lewis and Clark County, MT CPA Firms Prepare
Preparation is mostly about showing that the fees will stay. A buyer who can show client retention from a past acquisition, or a seller who will stay on for a filing season to introduce clients, gives the partner more confidence than a price alone. Price formulas tied to fees collected after closing, sometimes called earn-outs or retention adjustments, shift some risk back to the seller and can reduce what the buyer finances up front.
Can You Get a Business Loan to Buy a Business? Notes for CPA Firms in Helena, MT
Yes, for an operating buyer. Grovewater does not arrange startup loans, but a CPA or firm that already practices and wants to buy another book of business is the typical acquisition borrower. An employee buying the firm from a retiring owner can also ask, with the firm's fee history and the employee's own record carrying the request.
How Long Is a Typical Business Loan? What Lewis and Clark County, MT Bookkeepers Should Weigh
Each partner sets its own term. What a buyer should weigh is the trade-off between a lower payment and a higher total cost.
Illustration only, invented figures: a buyer finances $420,000 of a practice price at an annual rate of 9%. Over 120 months the payment is about $5,320 and the payments total about $638,446; over 84 months the payment is about $6,757 and the payments total about $567,623. The longer term lowers the payment by about $1,437 a month and adds about $70,823 to the total (our arithmetic).
A bookkeeping firm with monthly retainers may be able to forecast its fees more closely than a seasonal tax practice, which helps when choosing a term.
What Lewis and Clark County, MT Census Figures Show About Accounting Firms
County Business Patterns counted 41 accounting, tax preparation, bookkeeping and payroll services employers in Lewis and Clark County, MT for 2023, with 351 paid employees and $13.5 million in annual payroll; 25 of the 41 had fewer than five employees. ZIP Code Business Patterns put 26 in ZIP 59601. Nonemployer Statistics counted 98 accounting and bookkeeping businesses without paid employees in 2024, a separate program. For a small firm, buying another practice can be a large step relative to its size, which is why the transition plan matters.
A Closing Checklist for a Helena, MT Practice Purchase
- Signed purchase agreement with price, payment terms and any seller note.
- Client letters and the plan for transferring files with client consent.
- Staff offers and the seller's transition role in writing.
- Software and data migration plan and its cost.
- Term loan documents, with the total cost, term and every fee read before signing.
See the accounting firm financing page for staffing and equipment, and the Helena, MT business page for local figures.
By Grovewater Commercial Capital · Updated
