When we are talking about funding, we should think about the credit or the financial background checks. If you are applying for a loan you must be eligible and qualified for obtaining that loan. And if the loan is legal in specific, then you need to have a promising lawsuit in your side and a proper credit background in your hand. The lawsuit funding companies will definitely go through an underwriting process before finally settling with advances.
The credit checks can be used by the financial companies in case of lending loans. This will prove that whether the client is capable of repaying the amount or not, but in case of the legal funding company, you cannot claim the amount as a direct loan. It should only be repaid if the lawsuit gets settled successfully. So, the credit check function will not be an important factor or an issue for lending the money to the clients or litigants.
The underwriter of the lawsuit financing companies can check the whole background of the clients before lending the loan. As the company will get paid only if the result of the lawsuit is positive, they are required to check all the documents like police reports, medical reports properly. Some companies may use the background checking process as a part of approval process. But some consider the background checking after the approval. If the background check reveals small criminal offences, it will not negate your chance of obtaining advance cash from the lawsuit settlement companies. Therefore, very specific and minute details of the background are required.
Delay In The Process:
Sometimes the companies may perform very slow in the process and then delays can arise in the funding. Some companies may claim that instant cash will be provided within 24 to 72 hours. But if your case requires a lot of paper works and documents, they may go through each and every document before deciding on the approval. Therefore, the complexity of the case depends on the timing of the whole process. Online applications are also available in the web page of the company. Therefore, it seems that money will come to your door within 72 hours. But the actual story may be somewhat different from this.
High Risk Investment:
The funding companies are actually investing in a highly risky situation. If the lawsuit is lost, the entire money will suffer a loss. Therefore, due diligence are to be maintained in the process of underwriting. The legal financers must know the nature of the lawsuit, all the damages that affected the client and the expenses occurred. Therefore, a large amount of documentation is required before signing the agreement. So, the companies often want to fund the contingency based cases where they are sure that they will receive at least their upfront fees. The non recourse cases may not be favorable as the quality of the lawsuit remains in doubt.
Therefore, the financing companies may use various tools and methods for their underwriting process. As they are dealing with risky affairs, the clients are required to be co operative in providing the documents as and when demanded by the company. Though your credit score is not an important factor, your background must be clear. The clients and the attorneys with the help of the financing company can easily win the lawsuit and obtain a fair settlement.
Author Bio: Fred Roger is a well known legal professional who works in one of the lawsuit funding companies. He is sharing his experiences about the whole process and expected delays in the underwriting of the funding companies.