Litigation financing is a process by which companies can obtain cash to finance their pending or current lawsuits. This type of financing has become increasingly popular in recent years as businesses have looked for new and innovative ways to get the funding they need to succeed. This blog post will discuss what commercial litigation financing is, how it works, and how you can receive it for your business!
What Is Litigation Financing and How Does It Work?
Litigation financing is a type of funding that helps parties pay for the costs associated with pursuing or defending commercial litigation. Michigan Court Rules allow this, and many other states have similar rules.
A funder provides the funds necessary to defend the case in exchange for proceeds, if any, that are recovered. It allows businesses and individuals to pursue or defend cases that they might otherwise not be able to afford.
Furthermore, it allows businesses and individuals to take on cases that they might not otherwise be able to pursue due to a lack of funds.
There are many different types of financing, but some of the most common include:
- Pre-settlement Funding: This type of funding is provided to plaintiffs who have pending lawsuits. The one who is funding pays for all of the expenses associated with pursuing the case, and any settlement or judgment reimburses the plaintiff.
- Post-judgment Funding: This is provided to plaintiffs who have already obtained a judgment in their favor but are having difficulty collecting on it. The funder covers the expenses involved in enforcing the judgment, and the plaintiff is paid back any money recovered.
- At-risk Funding: This is provided to plaintiffs who have a strong case but are facing significant risks. The funder pays for all expenses associated with pursuing the case, and the plaintiff only has to repay the funder if they win.
Benefits of Receiving Litigation Financing
There are many benefits to litigation financing, but some of the most important include:
- It allows businesses and individuals to pursue or defend cases that they might otherwise not be able to afford.
- It allows businesses and individuals to take on cases that they might not otherwise be able to pursue due to a lack of funds.
- It helps level the playing field between plaintiffs and defendants by providing additional resources to plaintiffs.
- It can provide funding quickly, which can be critical in some cases.
How to Find the Best Litigation Financiers for Your Needs?
If you are interested in finding commercial litigation financing for your business or case, there are a few things that you should keep in mind.
First, it is essential to find a reputable and experienced financer. There are many different funders, so it is essential to do your research and ensure that you are working with a reputable one.
Second, you should make sure that you understand the financing agreement terms. It includes understanding how much you will be required to pay back and when.
Finally, it is essential to shop around and compare offers from different funders to get the best deal possible.
There are many reputable commercial litigation finance companies out there, so it is essential to do your research and find the one right for you.