Is a Lawsuit Loan a Form of Recourse Funding?
Filing a civil lawsuit is only the first step in the long road toward receiving economic compensation for your injuries. The good news is that, for qualified loanees, a lawsuit loan can help cover short-term costs while your claim is processed.
Lawsuit loans work differently from other forms of traditional lending—often to the advantage of the individual taking out the loan. So, is a lawsuit loan a form of recourse funding? Read on to learn more about the advantages that a lawsuit loan can offer.
Lawsuit Loans and Non-Recourse Funding
In finance, loans are traditionally secured by some form of collateral, such as real estate holdings, money in a bank account, or other forms of assets that a bank may be able to possess in the event that the loan isn’t repaid.
Loans backed by any form of collateral are what is referred to as recourse lending. And although recourse lending makes sense in an individual or business making an investment, it might not make sense in other situations.
In a recourse lending situation, the individual or entity receiving the loan assumes the risk and responsibility of repaying the loan with all accrued interest and fees. Fortunately, for people with active pending litigation who just need help to cover their interim expenses, non-recourse funding may be an option.
In a lawsuit loan, non-recourse lending is the name of the game. That’s because the individual receiving the loan is only responsible for repaying any funds they receive if their claim yields a positive result. The outcome of their pending litigation is their only collateral—meaning the lender assumes all risk.
For that reason, it can be helpful to think of lawsuit loans as a form of non-recourse funding or cash advance on the expected outcome of your settlement, instead of as a traditional loan backed by collateral.
How a Lawsuit Loan Company Can Help
If you’re considering taking out a lawsuit loan to help pay for everyday expenses while your claim is processed, a lawsuit loan company can help you figure out the sum that’s right for you.
In order to get started, you only need to be a plaintiff in a current lawsuit. With the help of your attorney, you can submit your application and find out if you qualify in a matter of hours.
The best news is that, unlike with other loans, the only factor that will be considered is the strength of your civil case—meaning you don’t have to worry about the impact of your credit history or any other consideration.
Find Out if a Lawsuit Loan is Right for You Today
At Money First Lending, we’re in the business of financial empowerment. We help litigants with active pending lawsuits cover their everyday expenses, so no one ever has to choose between taking care of their loved ones and financial hardship.
Call 702-623-3333 or fill out the form below to contact a loan professional from Money First Lending today.