Goodwill vs Working Capital

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Running Time: 9:30

Date: 01/05/2014

When it comes to your practice's finance needs, a specialist lender who understands your profession can make all the difference.

When it comes to expanding your practice or assessing your finance needs, there are particular nuances of the accounting profession that aren’t necessarily understood by many traditional lenders. That’s according to Paul Heilig, Head of Accounting Finance at specialist bank and asset manager, Investec, who says that when considering finance for working capital buy-ins or high LVR goodwill loans for example, many banks approach these deals from a regular commercial perspective. This can result in accountants having to offer more collateral security and guarantees than they would otherwise, which can have significant impacts on their practice and its future liability.

Paul Heilig explains the advantages and disadvantages  of goodwill versus working capital, the main concerns practices have regarding goodwill funding, and he stresses the importance of succession planning in any partner buy-in model.