Many law firms will wait to seek out post-settlement funding until they absolutely need the funds. They prefer to see whether a check will come in, so they can pay bills with their own money instead of going to a third-party. That’s why when firms do go to a funder, they need cash immediately. An experienced reputable funder should be able to process an application and provide money quickly – in many cases the same day of the application. To ensure a quick turnaround, law firms should have the necessary documentation in order, including the following:
- Retainer agreement
- Settlement agreement or release
- Petitions for court approval if required (ex. Petition for Surrogate Court Approval, Petition for Infant’s Compromise Order)
- Order Granting Preliminary Approval for class actions
- Co-counsel, Referral or Fee Share Agreement, if applicable
One of the most common reasons for delay is a failure to provide signed agreements. However, a reputable funder may be able to accept alternative documentation. In addition, delays may occur when the law firm has UCC, tax or bank liens. The funder will require documentation that UCC liens are terminated, tax liens are cleared, and the bank has provided a subordination agreement or, if the fee is large enough, the funder can pay off any liens that would impact the ability to get funding.
If a law firm has promptly provided all the information requested and a funder says they cannot provide funding, it may be a red flag. Some companies that hold themselves out as funders are really brokers who do not have the cash to provide funding to you. They obtain funds from third-parties, so they cannot offer same day funding. A reputable funder should have their own ready cash and not need to wait for a third-party.
If you are considering post-settlement funding, it is important to pick the right company. RapidFunds is a leader in the industry. Learn more about our difference or contact Sherry Foley, Esq. at sfoley@rapidfunds.com for a consultation.
To minimize potential delays with your funding, read our related post Avoid These Problems with Your Legal Funding Documentation.