How to Find the Best Source of Pre-Settlement Funding for Your Clients
Do you have a pre-settlement funding company you trust? As a lawyer, it’s your job to ensure your clients get the best possible case results – which typically means securing the largest possible settlement. Unfortunately, it can take many months, and sometimes years, to finalize a case. In the interim, it is important to make sure you have a good pre-settlement funding company to work with to ensure your clients remain financially stable?
Pre-settlement funding can help, but with so many pre-settlement funding options, it’s hard to choose the best resource for your clients. We’re here to help make that decision easier.
What Is Pre-Settlement Funding?
Let’s start with a primer on pre-settlement funding, in case you aren’t familiar. Pre-settlement funding, sometimes called a lawsuit loan, a settlement advance, or lawsuit funding, is essentially a loan given to plaintiffs in a pending lawsuit.
The recipient of the loan receives a lump sum of money, oftentimes immediately after the application is approved. The amount will vary based on the projected size of the settlement, the requested amount, and other factors. Depending on the nature of the loan, the borrower may be responsible for paying the loan back with interest or with a fixed fee (only Capital Now Funding offers a 100% fixed payoff for the life of the case); in most cases, they’re not required to pay back the loan if they don’t receive a settlement, reducing the risk to your client. Additionally, they should not be required to pay back the loan until the settlement is received, even if it takes a long time.
Why Is Pre-Settlement Funding Valuable for Lawyers?
The benefits for your clients are obvious. But pre-settlement funding can also be valuable for lawyers. Recommending pre-settlement funding to your clients can instantly relieve their stress, giving them a way to manage their finances cleanly in a particularly difficult situation. They’ll respect the value you added and may be more likely to refer you to others in the future.
Of course, much of the benefits here depend on your ability to choose the right pre-settlement funding provider to recommend. If your clients are met with strict terms, unforgiving conditions, or sketchy interactions, they may end up seeing you in a negative light.
So how can you choose the right provider?
Factors to Consider
These are some of the most important factors to consider as you review the pre-settlement funding providers available to your clients:
- Interest rate. One of the first things you’ll need to look at is the interest rate charged by the funding provider. Some pre-settlement funding providers charge exorbitant interest rates, causing the payoff to escalate before the actual settlement arrives. If your clients aren’t careful, they could end up being the victims of compound interest, owing far more than they originally borrowed and end up eating into their settlement amount. However, Capital Now Funding is the only pre-settlement funding company that offer loans with no interest at all; instead, Capital Now Funding charges a fixed fee for the loan, so your clients will know exactly what they’re going to owe when the settlement comes in.
- Terms and conditions. What are the terms and conditions offered by this provider? For example, what will happen if the settlement isn’t won? In many cases, the borrower will owe nothing if the lawsuit fails. Similarly, the borrower should not owe anything on the loan until the settlement arrives. Be sure to review the terms and conditions carefully so your clients aren’t taken advantage of; some companies sneak in exceptions and rules to maximize their bottom line at the borrower’s expense.
- Evaluation process. What kind of process is used to determine whether a borrower is qualified to take out a pre-settlement loan? Most providers want to make sure the borrower is in a strong position to get a sizable settlement; otherwise, there’s too much risk in losing the money. However, you don’t want to recommend a funding provider that’s too strict or limiting, or it could result in frustration for your client.
- Communication and availability. If you find a promising funding provider, consider reaching out to them and having a conversation. Is it easy to get in touch with these people? Do they seem honest and transparent? Are they willing to answer your questions? The easier it is to communicate, the better you can feel about the situation. If it takes forever to get a response, or if the reps you speak to seem dodgy or not knowledgeable, it may give you second thoughts about proceeding.
- Time to settle. How long does it take for borrowers to get the money from this provider? Is it available after a couple of days or will it take weeks? Generally, the faster the funds are dispersed, the better it will be for your clients’ overall experience.
- Brand reputation. What kind of reputation does this brand have? Have you heard of them before, or do you know other lawyers or people who have used this source in the past? How are their reviews? Do their past clients rate them favorably? A good brand reputation can be very reassuring.
- Reviews, ratings, testimonials, etc. If you’re not familiar with this brand or if you want to do some more research, take a look at the reviews, ratings, and testimonials associated with this brand. After a quick search and a browse through third-party review websites, you should learn about the typical experience a borrower has with this company. Combined with the other information you’ve gleaned, that should be enough to help you decide whether to move forward with a recommendation.
The Importance of Research
No matter what, it’s important to do your research and due diligence before making a solid recommendation. Find out as much as you can about a range of different providers and compare and contrast them. The more you learn, the more likely you’ll be to make a solid recommendation – and enjoy the benefits of putting your clients in touch with a reliable financier.
As a lawyer, you have the power to make your clients’ lives dramatically easier. The right pre-settlement funding partner can help. That’s why, at Capital Now Funding, we support personal injury lawyers all over the country research and secure the best funding options for their clients. Contact us today to learn more!