How to Find the Best Lawsuit Loan Company
You’re a good lawyer, which means you want to help your clients out as much as possible, both in the courtroom and outside the context of the case. While waiting for a settlement, many clients dwell in financial distress. They are out of work, meaning they don't have any recurring revenue, their medical bills are starting to roll in, and they have no idea when they're actually going to receive a settlement – or even how much of a settlement they’re going to receive.
A lawsuit loan might be able to tide them over. But as a responsible agent who cares about their clients, you don't want to recommend a lawsuit loan if it means directing your client to a predatory lender or submitting them to high interest rates and other traps.
So what are the best lawsuit loan companies that you can recommend? And how should you go about recommending them?
What Is a Lawsuit Loan?
We'll start with the basics. What is a lawsuit loan?
Lawsuit loans go by a variety of different names. Some people call them settlement advances. Others call them pre settlement funding or something similar. But whatever you call it, it always works the same way, more or less.
The plaintiff in a pending lawsuit will fill out an application, noting the details of their case and some personal information. Assuming they qualify for the loan, they'll receive a lump sum from the lender within a few days. Once received, this money can be spent in any way the client chooses, and the money will not have to be paid back until the settlement arrives. Usually, they'll be responsible for paying an interest rate on the principal, or a fixed fee for the lending service. And these days, most lawsuit loans are non-recourse, so if the settlement doesn't go through, the client will owe nothing.
It's a great arrangement for most clients because it helps them make ends meet when they are at their most vulnerable financially. It can also benefit your reputation and your law firm; happy clients are much more likely to leave you good reviews and recommend you to other people.
What Makes a Good Lawsuit Loan Company?
That said, not all lawsuit loan companies are equally beneficial. Because lawsuit loans are not as regulated or scrutinized as conventional bank loans, the industry a unfortunately ripe with bad actors and misleading terms.
What makes it a good lawsuit loan company? And how can you tell that you found one?
During your due diligence, look at the following:
- Interest rate vs. fixed fee. First, look at whether the company is offering an interest rate or a fixed fee for their services. If you've ever taken out a conventional loan, you know that interest rates are nothing to be scared of, but you also know that compounding interest can add up quickly. If your client isn't able to pay the loan back immediately, the interest could truly hurt them. That's why it's usually better to recommend a lawsuit loan provider that offers a fixed fee for the service. Fixed fees are predictable and not subject to change. Your client will know exactly what they're getting themselves into before they sign any agreements.
- Application process. Next, look at the application process. Most lawsuit loan companies don't care about a client’s credit score or financial history. Instead, they are exclusively interested in whether the case has a chance to win a settlement. Accordingly, most lawsuit loan applications are very short and to the point.
- Communication and support. The best lawsuit loan companies are more than willing to have a conversation with you and answer all your questions transparently. If you can't get in touch with a customer service agent, or if the company seems to dodge all of your questions, you have a right to be suspicious.
- Non-recourse lending. Today's leading lawsuit loan companies also offer non-recourse lending. In a typical recourse loan, borrowers must pay back the loan no matter what. If they don't, the bank may be legally entitled to seize some of their property. But with a non-recourse lawsuit loan, your clients will owe nothing if they never get a settlement.
- Lawyer support. Do other lawyers have good things to say about this company? Have they recommended it for their own clients?
- Fast disbursal. How quickly does this company provide loan funds? Ideally, your clients will be able to get the money in a day or two.
- Overall reputation. What about customer ratings and reviews? What kind of reputation does this company have?
How to Find (and Research) Lawsuit Loan Companies
How do you find the best lawsuit loan companies?
These are some of your best options:
- Networking and referrals. Talk to other lawyers in your area, or maybe even in your firm. They may have familiarity with the lawsuit lender that they trust. A personal referral will always mean more than seeing a good review online.
- Online search. Of course, there are many lawsuit loan companies to discover if you perform an online search. Just searching for a lawsuit loan or pre-settlement funding can introduce you to thousands of options. This may seem a bit overwhelming, but even an hour of research can help you filter out all but the best loan companies available.
- Lists and databases. Look for compiled lists of lawsuit loan companies and other financial institutions. It's hard to find one that's up to date, but it's a great source of information.
Why Is Capital Now Funding Different?
At Capital Now Funding, We try our best to be the best lawsuit loan company available. We offer fixed fees instead of recurring interest rates, our fees are reasonable, and we offer excellent customer service to lawyers and borrowers alike. We also have a simple application process, near-immediate funding, and non-recourse lending to protect borrowers if they never get a settlement.
It's tough to find the best lawsuit loan company, especially with so many options on the market. But the choice is much easier once you find an organization you can genuinely trust. Contact Capital Now Funding today to find out more about what we can offer your clients and how we work!