Lawsuit finance, otherwise known as a case loan, lawsuit cash advance, lawsuit funding or case funding is a complex business providing upfront cash now against the future proceeds of a claim for damages.
Since every case is different, each case must be evaluated thoroughly and carefully. The vast majority of cases funded by Fair Rate Funding, and other case “loan” companies, are “run of the mill” personal injury cases. Examples include, slip and fall cases, motor vehicle accidents, or workers’ compensation cases.
However, lawsuits such as medical and legal malpractice, products liability, class action lawsuits and others all increase the complexity and thus the amount of time needed to properly evaluate the risk to the funding company’s capital.
You will undoubtedly encounter many case loan advance companies touting 24 hour service. And cases are routinely funded by Fair Rate Funding within this time frame. However, many cases simply cannot be evaluated in 24 hours for various reasons.
By far the largest reason for a delay in funding is the inability to quickly obtain pertinent information about the case and put it into the hands of the case loan underwriters. Keep in mind that case loan underwriters must assess the risk of investment and weigh that against the likelihood of recovery in any lawsuit. If a lawsuit is “lost”, the case loan is also lost. Clients can certainly understand all information must be processed before a case loan can be approved. Fortunately, case loan underwriters are skilled in this type of risk assessment and usually can complete the risk analysis in a short time once the information is received.
Helping the lawsuit finance company obtain information is one way the client can really help out. Often the attorney handling the case simply does not possess all the information. Medical reports, police or incident reports, or insurance information may exist but the attorney may not have them. After all, the attorney may not need the information right away. The attorney knows all the pertinent information will come out eventually. Yet while the attorney is in no rush, the client usually needs cash now. Clients help their own cause and their attorney as well, by gathering the information necessary for a case loan.
More than any other reason, the lack of proper paperwork is the reason why a case loan is delayed. Other reasons can also have an impact but undoubtedly most will center around receiving necessary information.
Thanks for your interest in the lawsuit funding business.