Search for Settlement Funding

How to Search for Settlement Funding – The Right Way

Settlement funding is a class of specialty financial transactions in which plaintiffs involved in pending litigation can access the potential value of their cases, prior to settlement. They pledge a portion of their recovery in exchange for an immediate influx of cash from settlement funding companies. In this post, we explore the search for settlement funding – what you should look for and what you should avoid.

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Settlement Funding Background

The need for settlement funding arises from legal system delays present in pursuing justice in the civil judicial system. Delays are inherent in the system as both parties seek to get an accurate account of each parties’ version of the event(s) in question. Unfortunately, many plaintiffs find themselves in financial trouble as they wait for their cases to make their way through the litigation process. This is especially true if compensation for injuries is sought in the proceedings.

Many injuries require extensive recovery and treatment. Some are so severe as to prevent plaintiffs from working while their cases progress. This can lead to financial strain, causing some plaintiffs to accept low ball settlement offers simply to make ends meet.

The search for settlement funding seeks to alleviate this stress by allowing plaintiffs to access the value of their potential settlement and endure the many months that inevitably elapse as their attorneys seek just compensation under the law.

Settlement Funding Contracts are Unique

Also known as lawsuit loan contracts, settlement funding transactions are unique investment vehicles for “lawsuit lenders”. Lawsuit loans are not actually loans at all. The difference between personal loans and lawsuit loans lie in their structure. While personal loans imply repayment at some future time, settlement funding deals are advances on potential recoveries. They are only repaid from settlement proceeds and are contingent upon a successful outcome. This is referred to as non-recourse funding. If plaintiffs lose their cases, the lawsuit advances are not repaid. The unique nature of these vehicles actually makes the search for settlement funding relatively easy.

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Settlement Funding Companies

Money spends regardless of its source. Accordingly, the search for settlement funding begins and ends with your choice of a settlement funding company. The lawsuit loan process is mostly similar between companies. Each will require a screening phone call to see if a particular case is a good candidate for funding. Once a case is pre-qualified for lawsuit funding, companies will compile documents from your attorney and send them to their underwriting department.

Lawsuit loan underwriting seeks to determine the likelihood of success of a particular lawsuit. Liability, damages and available insurance coverage are all analyzed by settlement funding underwriters in accordance with the needs of their overall investment portfolio.

When a case is approved, settlement funding contracts are drafted and forwarded to the client and counsel. Once executed, the case is “funded” via overnight check or electronic bank transfer.

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Beginning the Search for Settlement Funding

While the process is the same, settlement funding costs can vary greatly. Lawsuit funding exists in an unregulated marketplace in many jurisdictions. This means lawsuit funding companies can charge whatever they want. The search for settlement funding begins with a successful lawsuit loan application. It ends with an understanding of how much it will cost.

For this reason, plaintiffs help themselves with lawsuit funding by shopping for the best terms. These include not only the lawsuit loan rates that are charged, but also understanding how the rates are calculated on the contract amount (simple vs. compounding lawsuit loan rates). Competitive settlement funding rates should be around 18%-20% every six months.

Additional fees charged on settlement funding contracts are another important consideration. Funding companies customarily charge origination, processing, underwriting, monitoring and other fees in addition to the rate. The search for settlement funding can be accomplished in the best way by minimizing these fees whenever possible.

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Getting Started

Simply put, the search for settlement funding is the search for the best deal. While there is abundant information available online, the best way to search for settlement funding is to reach out and ask questions. Once the best terms are found, your search for settlement funding is well on its way.

Why Choose Fair Rate Funding

You obviously have a choice in who you use for legal funding. We offer:

• Simple and Easy Process – Approval only on the strength of your case.
• Risk – Free Proposition – Only repay if you win your case.
• Rapid Approval and Funding – Approvals often within 24 hrs.
• Up Front Pricing – Absolutely no hidden fees.

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