At Advisor Financing LLC, we have worked with thousands of financial advisors that are in need of financing in order to acquire books of business, conduct internal transitions - whether full or partial transitions - or refinancing this debt. Because of our industry experience, we have a simple three step process in order to secure financing. If you are looking for loans for financial advisors, learn more about this process now.
1. Initial Discovery & Document Collection
The first step in our loan closing process consists of a quick 20 to 30 minute phone call in which we can learn exactly what your situation looks like and garner any relevant information to your loan. During this call, we'll learn the specifics of what your financial advisory business looks like (and if applicable, the book of business to be acquired or bought in to), your desired timing, and what your goals are in securing financing. Because each financial advisory practice is unique, each and every scenario we have encountered is also unique. While some advisors may be in the beginning stages of structuring their purchase agreement, other advisors may already know the exact amount of financing they are requesting, when they are requesting the funds, and are ready to begin securing financing immediately. We will also provide you with a step by step overview of what the entire financing process may look like and answer any questions you may have. At the end of this call, we will provide you with all of the tools and documents necessary to begin securing financing.
The documents necessary are outlined in our document checklist, as well as our financial advisor practice questionnaire and personal financial statement. The practice questionnaire will be completed on any advisory practices or RIAs involved in the transaction. For example, if you are the owner of an RIA and are acquiring another RIA, you will complete this on both your existing firm and the firm to be acquired. If you are an independent advisor at a broker dealer without an existing book of business, you would simply complete this on the practice in which you are buying in to. The personal financial statement is to be completed on any involved parties that will retain greater than a 20% ownership stake in the business(es).
Once we have received a completed file of documentation, we are able to begin working on step two of the financing process.
2. Loan Sourcing & Term Sheet
The second step in our financial advisor loan closing process is to begin working with our network of local and national lending partners to secure a term sheet. The documentation that you have provided is what we will bring to our partners and begin the underwriting process. Generally, once we have a completed file of documentation we are able to provide advisors with a term sheet within 1-2 weeks. The term sheet will outline the amount of financing available, what the interest rate and term on your interest rate, and any covenants and conditions of the financing. From our initial phone call, we will have an understanding of your financing wants and needs and be able to pair you with the best lending partner for your scenario.
Once Advisor Financing has received the term sheet, we will review and provide you with a copy, answering any questions that you may have in order to ensure you have a thorough understanding of the terms. If you haven't already, please check out our posts on what to look for when securing financing and what to know about prepayment penalties. At Advisor Financing, we pride ourselves on acting as your advocate to ensure you are receiving the best rates and terms in the industry.
3. Closing & Capital
When you are ready to move forward, you'll want to provide us with a signed copy of the term sheet to indicate your desire to secure financing. At this point in time, we will begin the final underwriting phase and loan closing process. During this stage, any remaining documents outstanding will be collected in addition to any other pieces of information necessary to secure financing. The documents collected here may include finalized seller financing documents (if applicable), Asset Purchase Agreements, wiring instructions, and assignment of life insurance. The loan closing process generally takes between 45-75 days and can be expedited as necessary. The primary reason that closings can be delayed is due to delays in receiving necessary underwriting and closing documents back from advisors that are required throughout the process. Generally, closings will be held virtually and proceeds wired to the seller (or in the case of a refinance, the lending institution) upon closing. As your advocate, we will be in frequent communication with yourself and the bank in order to ensure a smooth and timely closing.
What Next?
You might be wondering what happens after closing. Rest assured, Advisor Financing is here to continue acting as a long-term resource and partner to the advisors we work with when providing financial advisor loans. While we will periodically check in to ensure everything is going well for you, we will also be your first line of resource for any future potential opportunities, acquisitions, or transitions that you may be presented with. Beyond this, we frequently attend industry events and would love to connect with you in person.
