The Secrets of Litigation Finance

There are secrets to litigation finance that every plaintiff should know prior to applying for lawsuit funding. Too many plaintiffs rush to litigation finance as the answer to their current cash flow problems without completely understanding the intricacies behind litigation funding. This article should shed some light on plaintiff litigation finance and the secrets that some litigation finance companies use to make money

What is litigation finance?

Litigation finance is not a “loan” but rather it is a cash advance based upon the merits of a lawsuit that provides a plaintiff with sufficient funding to reach the conclusion of the case when the plaintiff will receive his/her fair share of the settlement or verdict. Litigation finance companies invest in the lawsuit itself as opposed to advancing money to the plaintiff in the form of a loan. Litigation finance is not based on a plaintiff’s prior credit or bankruptcy status. Other terms used for this type of funding include: lawsuit loan, litigation funding, litigation loan, lawsuit funding, lawsuit finance, lawsuit cash advance, case loan, case cash advance, plaintiff cash advance, litigant funding, pre-settlement loan, pre-settlement lending, pre-settlement cash advance, etc.

How do litigation finance companies make money?

All litigation finance companies are different and charge interest and fees differently. We all agree that litigation finance companies assume a lot of risk due to their investment in the lawsuit as opposed to investing in the plaintiff. The investment is therefore only as solid as the case. We are all familiar with how quickly a good case can get thrown-out or a jury can award a large settlement for a case that we could call “frivolous.” The United States justice system never ceases to surprise us. With that in mind, the investments of litigation finance companies are risky. They must charge relatively high interest rates on the cases that are successful in order to make-up for the unsuccessful cases. Some litigation finance companies use a multiplier instead of an interest rate which is really just a different way of accomplishing the same thing.

Are there other fees associated with litigation finance?

Again, all litigation finance companies are different and charge interest and fees differently. Generally speaking, the answer to this question is “yes.” These fees usually show-up on the contract that the plaintiff’s attorney must sign and are then taken from the settlement upon a successful case. Some examples of these fees include: origination fees, application fees, documentation fee, closing costs/fees, premature payoff penalty etc. These fees are not that different from traditional loans but plaintiffs should be aware of these so they are not blind-sided when they see these fees.

Is litigation finance a different way of getting my settlement?

Litigation finance should not be a substitute for your settlement but rather a raft that helps you stay afloat while your attorney fights for you. Too many plaintiffs apply for litigation finance with the belief that litigation finance is simply a different way to get their settlement money. Assuming you win your case, the amount owed to the litigation finance company varies greatly depending upon the length of time between the date of the advance and the date when you receive the settlement/verdict money. You should exhaust other means of funding first. Some good sources of information about litigation finance are The Funding Exchange (www.TheFundingExchange.com) and Expert Law (www.expertlaw.com).

Conclusion

As a plaintiff, you should understand litigation finance and the process of securing funding before you apply. If your expectations are set appropriately and you proceed with litigation finance then you will find that it is a saving grace in the turbulent world of litigation. If you apply for litigation finance without a true understanding then you may be disappointed.

Import Financing Options To Choose From

The import and export business is still one of the lucrative types of trades you can get into. However, importing is still a risky business to get into.

If you are still interested in entering the foreign trade industry, one of the first things you have to do is to secure the best available export and import financing solutions. With these solutions, you will have access to the working capital required for your venture as well as enhanced cash flow since you can get the assurance that all pertinent matters are effectively settled with suppliers and payments are promptly received from buyers.

There are different import financing options to choose from today. Businesses can use them on their own or two or three more in conjunction. Below are three of the most popular options you can choose from:

1. Accounts receivable financing. This option pertains to the selling or pledging of your company’s account receivable, at a discount, to a bank, financial institution, or an accounts receivable financing company who may assume a risk of loss. Under this solution, you receive a portion (usually 80% to 90% of the face value of your receivables) in advance of payment from your customers in return for a fee, or interest, which will be paid to the commercial finance company. When the customer pays the commercial finance company, the appropriate fees are deducted and the remainder is rebated to you.

2. Purchase order financing. This import financing option refers to the assignment of purchase orders to a third party, a bank, financial institution, or commercial finance company, who then takes all responsibilities of billing and collecting from customers. Purchase order financing can be used to finance all present and succeeding orders to sustain and improve your company’s cash flow.

3. Inventory financing. Inventory financing pertains to a loan secured by the inventory of your business. This financial solution enables import companies to hold more stock without cash flow strain and to produce more sales. Most of the time, inventory finance is part of a purchase order and accounts receivable financing commercial finance package.

The three types of import financing solutions stated above can enable your business to increase its purchasing capabilities dramatically. With these options, you can accept larger orders and grow your business exponentially.

By choosing the right bank or financial institution, the import financial solutions you need can also be tailored to your business’ particular requirements.

Bad Credit Financing For You

Are you trying to determine what bad credit finance options that are available to you? You need a new automobile, but you are unsure of who will finance it due to your bad credit?

There is no need to be too concerned about financing if you have bad credit. There are several different financing methods that are available to most people, regardless of their credit history. The interest rates may be higher or they may require a larger down payment, but they may be just what you need to get financing for your purchase.

Financing a Car

If you need a new or used automobile, but you have bad credit, then your best source for financing will most likely be a finance company rather than a bank.

There are some companies that offer people with bad credit financing. The financing usually is dependent upon the vehicle chosen, where you buy the vehicle, and what insurance and driving records that you hold.

There are other things that the finance company will consider as well, including your income, cosignors that you can get for the loan, and any other references that you may be able to provide.

Financing a Home

Real estate financing is a little trickier to find if you have bad credit, but it is in some ways easier to finance due to the collateral being the home.

Some of the big considerations that are looked at when trying to get a mortgage loan with bad credit include income, home or real estate insurance that you have to purchase, how much your down payment is, and any references from past landlords that you may have.

You can find bad credit mortgage financing online, at some real estate companies, and at finance companies. You only have to be willing to look for them.

Other Kinds of Financing

If you need to find financing for other items, like electronics or collectible items, then you may find that this is more difficult.

The reason why it is more difficult to find financing for these smaller items is that they are much harder to repossess and to find buyers for them after they have been repossessed. These reasons make lenders more wary of financing people with bad credit. You may need to consider other ways to get the money to purchase these kinds of times if they are needed.

It may be possible to find a lender that will finance these items, even if you have bad credit. If you are rejected, however, you should ask them if they have some recommendations of where you might get financing.