Doctor practicing financing for medical practice loans is the goal of most new and established medical practices looking for working capital. There are many aspects to medical practice financing that you need to know before you can expect to get funding for your healthcare practice! You want to ensure that your healthcare medical practice gets all the funds it needs in a single practice financing loan to have a successful running practice!

Seeking medical practice financing for your healthcare practice needs is one of the most important steps in securing healthcare working capital funds to support your practice. Getting the right financing to help with buying expensive equipment or improving the setup of your office and / or improving your medical practice daily cash flow requirements.

Operating a healthcare practice is more difficult than you would have imaged! You need to have a good grasp of and control over the business end of the daily cash flow needs of your medical practice! Finding the right lender to get doctor financing approved for your practice is critical in getting the funds you need for your healthcare practice!

The good news is that healthcare lenders generally finds medical doctors as a good investment depending on personal credit scores! Even in our current strict lending business economic climate, banks are restricting credit and loans are being continually declined. Finding the right healthcare lender in the healthcare practice industry has been a challenge for the medical professional.

Healthcare specialty lenders are still in the business of making profitable loans for their portfolio so finding solid reliable medical practices to fund is doable with the right lender! As a rule, doctors are viewed favorable in the banking world for financing in their practices for medical working capital and medical term loans.

Medical doctors are considered good credit risks because on a percentage basis, healthcare practice professional’s account for very few defaults. In medical practice financing, dentists, medical doctors and all healthcare professionals usually have better personal credit scores, which makes them good candidates for medical practice term loans and financing.

However, instances where doctors have had poor personal credit history, it is recommended that the healthcare professional contact a credit repair company to improve their FICO personal credit score before trying to apply for doctor practice financing. Doctor financing loans can top out around the $5 million range, so you want to be in good financial condition with regards to your credit history so that you will be eligible for the most attractive loan rates and term.

Another exception to this rule is in the case of new medical practices start-ups. Like so many other things in our current difficult economy, lenders are cutting back on medical practice startup financing, making it extremely hard to get financing. Medical doctor practice financing is being viewed with less certainty by lenders today because these services are presently more risky in today’s lending world for start-ups! This doesn’t mean that you won’t get financing for your startup medical practice, you just might not be able find 100% of the capital you are seeking.

After you have been in the healthcare practice industry for a number of years, you might want to consider expanding into multiple offices for doctor practice growth. Using additional medical term loans practice financing can help you expand your medical practice to new heights and grow into a larger space, invest in new technologies and make your medical practice more efficient which allows you to offer additional services for your healthcare medical practice.

In order to grow a healthcare doctor practice the doctor needs to consider the time value of money. So if the doctor can receive funds they need to consider how much additional revenue those funds will bring in. If the practice revenue is less than the cost of the funds and they are positive than the doctor should proceed with the financing. The concept of time value of money comes into play that the doctor does not have to wait for the funds to be collected from insurance providers with their current sales but instead they come in by receiving funds sooner than they would have had the money to get the medical practice cash flowing.

So even though this may cost more in the long run the Doctor will get the benefit of creating revenue sooner and it will have a lasting effect on revenue and his daily cash flow. The cost of the funds will end and then the complete profit is the Doctors with cash flow funding.

Doctor Medical Practice Financing and Healthcare Practice Working Capital

Healthcare medical practice working capital financing is ideal for healthcare professionals who want to expand their practice, procure new equipment, or improve their practice. Healthcare practice working capital loans and financing from healthcare lenders come with fast working capital funding, quick and easy terms.

Healthcare practice working capital funding can be used to provide a healthcare physician existing practice the funds needed to purchase a medical building or they may use these working capital funds for the down payment of the building. Usually the monthly payment of a mortgage can be the same payment or in many cases less than what the doctor or physician healthcare practice is paying for the leased office space. So if the doctor and or physician healthcare practice does not have cash available to buy the medical building they can just get a practice working capital funding to get the funding required to acquire a building for their existing physician healthcare practice. Practice bank statements and a one page application is all that is usually needed to apply to see if the doctor physician healthcare practice qualifies for working capital funding. This can fulfill the dreams of the doctor to now have an investment property which the doctor now owns.

When a doctor or physician practice is looking to purchase equipment the doctor may not have the down payment needed to put down for the equipment lease purchase. Working capital financing is a good way to get the doctor the up-front medical working capital funds needed to lease the equipment. Usually having certain up to date equipment is a good way to attract patients away from competing doctors.

Say the doctor’s practice is looking to own an asset, like a piece of equipment quickly but does not have the working capital funds. Getting the doctor into a practice working capital financing will enable the doctor to buy the equipment and pay off the practice working capital financing in 6 months. At that time the equipment is owned free and clear and no loans or leases are on the books only the asset of the equipment. When you calculate the cost of financing the equipment this way it cost the same as getting a long term loan but this is paid off quickly and the Doctor now has an asset which the doctor can always sell for cash.

Whatever the physician’s practice may need to purchase, even if it is for personal items- like a home, a practice working capital financing based on the doctor’s existing practice is a good way to provide the funds needed to make that purchase. Purchasing a good software system will also save the doctor / physician money because it should free up time of an employee’s time. Working capital financing will pay for this asset which is another good way to improve the practice and how it runs.

Consolidating debt is another way to get all the doctor’s debt organized so the doctor spends less time fumbling with the various payments for all the different payments needed to be made. Hiring a marketing company to increase revenue is another good way to use a practice working capital advance. The down payment required for this marketing company is where the practice working capital advance can be used.

Also peace of mind to be able to pay bills timely is another reason to receive a working capital financing. If a doctor practice needs 100% doctor financing for their practice and has impaired personal credit score, than it is a good idea to work on trying to clean up the doctor’s FICO credit report. Any medical practice professional needs their personal credit score to be in good standing.

It is easier to receive practice working capital financing when a personal FICO score is above a 660. One way to increase a doctor’s personal score is to make sure any existing credit balance is not more than 50% of the available credit limit. If the debt is more than 50% of the card limit than it is a good idea to transfer the debt to another card.

This will spread the debt but keep the debt to income ratio lower. Another good thing to do is to open new cards up and not use the card. The more cards you have and have no balances than that will increase your personal credit limit. You do have to use the card at least once a year so the credit card company does not close, closing cards will lower your personal FICO score because it will lower your personal credit limit!

When a small business needs funding, where does it turn? There are plenty of ways for a small business to gain funding, each with their own unique advantages. While one may be good for a particular business, another may be more suitable to the next business. It all depends on the preferences of the small business and whether or not it will get approved. For small business owners looking to move up in the world, check out this list of sources to gain capital fast.

1. Banks

This is probably the first thing anyone thinks of when it comes to loans. After all, lending money to clients and collecting the interest is one of the ways banks make their profits. It’s usually pretty easy to get approved with a good credit score. However, as it was just stated, banks make money off interest. Therefore, the interest rates on traditional bank loans tend to be a little higher than from other sources, although it varies with the market rate and the credit rating of the applicant.

2. Merchant Cash Advance

Although similar to a bank loan, a merchant cash advance is usually safer and generates less interest. First of all, getting approved with a company like Water Street Capital is a much easier process than via a bank. As long as business grosses an average of $10,000 a month it can start applying confidently for up to $500,000! The application can be submitted online and usually takes about 3 business days to receive the money, however, the business can use the money for an array of different needs such and advertising, payroll, expansions, upgrades and more!

The way the client pays back the loan is also fundamentally different and makes this option one of the best for small businesses. The business agrees with the lender to repay the loan with a small percentage of their sales every month (like taxes). The amount is automatically taken out every month and varies with the success of the business. If it has a slow month, it pays less and if it finds itself enjoy more profits, it will pay off the debt faster!

3. Crowdfunding

While it can’t really be labeled a “reliable” source, crowdfunding has skyrocketed in popularity in the past few years with sites such as Indiegogo and GoFundMe. It can be a great way to gain investors for a small business looking to expand. If the product is popular enough or unique enough, it will surely gain backers. However, it can’t always be counted on to come through. If the business doesn’t receive enough investments to reach its minimum goal, it receives nothing. It’s not the source to turn to for large financial requests, but it has proven to be effective in the past, sometimes with businesses even generating millions of dollars!

Small business funding, unfortunately, isn’t easy to get for most people – especially if you don’t already have good credit. Typically, it requires a lot of legwork to get business loan. For some start-ups, owners often have to resort to getting a personal line of credit and using that to find the business. Easy to get small business loans really do exist, just as long as you prepare everything properly and look in the right place.

Here are a few tips to increase your chances of finding and obtaining a small business loan:

1. Get your personal credit report cleaned up. This is something that lenders will want to see. If you have poor credit, take the time to get it straightened out. You might even want to use credit repair services.

2. Create the best business plan possible. Consider this to be your “sales pitch” to funders. If you want as much money as possible from a lender, you can’t be secretive. You must specify exactly why you need the money, how much you need, and what it will be used for.

3. Keep everything as organized as possible. A wide range of documents may be required, including tax returns, annual revenue, and bank statements. Know which documents a potential lender will require from you ahead of time.

More Tips for Easy to Get Small Business Loans

4. Determine the best type of lender. There are many types of organizations that offer easy to get small business loans, including banks, online lenders, non-profit micro-lenders, “angel investors”, credit card companies, and more. Use a bank when you already have good credit and can provide collateral. Use online lenders if you lack collateral and need the funding as quickly as possible. A micro-lender might be ideal when you have a company that is so small that it doesn’t qualify for traditional funding.

5. How long have you been in business? If your company is under one-year old, you’ll have difficulty If you have a start-up, consider solutions such as personal loans, angel investors, or even online crowd-funding if you can come up with an innovative marketing message.

6. Find out how much the payments will be and make sure you will absolutely be able to pay them. Different lenders have different terms and different interest rates. You might be required to pay just one time a month or two times a month.

If you need a fast business loan, US Business Funding is a great place to start your search. This site has been featured in publications such as Forbes, Business Insider, CNN Money, and other such organizations. US Business Funding reviews are primarily positive.

In this article, we’ll begin with a brief discussion of why grants are important. Then, we will conclude with how much of your funding budget should be in grants.

Not long ago, I assumed that everyone in the nonprofit sector or who works with public organizations, churches, charities or any tax-exempt agency knows the value and importance of grants and grant research. My assumption might just be wrong.

Recently, I interviewed grant expert Linda Butler from Butler Consulting in the Miami Valley of Ohio. Linda has a unique take on why grants are important – not because of her background in grant writing, but because of her experience with other forms of funding.

Here is an excerpt of our conversation:

Phil: “Since our focus today is on Grant Seeking, or Grant Search, why is it important to know how to search for grants in today’s world for non-profits?

Linda: Well, I think more than ever, it’s important for any kind of an organization. We (Butler Consulting) work with not only non-profit organizations but we also (with the economy and the stimulus money) are starting to work with for-profit organizations and, of course, with public institutions also. I think it’s really important to be able to diversify your funding sources and know that the whole pie of money that supports an organization especially nonprofits and public organizations. That funding pie includes grants, which should really be as a rule about 10-15% of your overall budget.

Another reason why I think it’s important to be able to do Grant Seeking is that it’s important to screen out some of those scams out there that say there’s free grant money for individuals. Some of the folks really are not grant professionals and perhaps not even legit companies.

There is very little money out there for individuals. There certainly are scholarships that sort of thing but as far as the grants that we’re talking about today, we’re talking primarily about grants that support nonprofits and public institutions.

I think it’s important to distinguish the difference.

Phil: When you say that grants should make up 10-15% of the overall budget, could you give us an idea about how you see the rest of it like. If 10-15% is grants, what would be the rest of the 85%?

Linda: It’s not just myself, Phil, but you’ll find I’m a member of the Association of Fundraising Professionals and read a lot of information like “The Chronicle of Philanthropy.” I think that most fundraisers would agree with me that the secret 70-80% is individuals.

A lot of nonprofit and public organizations aren’t tapping into individuals as far as supporting their organization. Individuals of course include:

1) Individual gifts,

2) Major gifts,

3) Campaigns,

4) Special events, and

5) Lots of different ways to raise money from individuals.

10-15% is with Grants.

The other piece of the pie has to do with…

1) Planned giving which of course can be from individuals, and

2) Corporations.

The whole piece of the pie is primarily individuals (about 70-80%) along with grants, bequests, planned giving, and corporations (about 20-30%).

Contrary to popular belief, business plans do not generate business financing. True, there are many kinds of financing options that require a business plan, but nobody invests in a business plan.

Investors need a business plan as a document that communicates ideas and information, but they invest in a company, in a product, and in people.

Small business financing myths:

Venture capital is a growing opportunity for funding businesses. Actually, venture capital financing is very rare. I’ll explain more later, but assume that only a very few high-growth plans with high-power management teams are venture opportunities.

Bank loans are the most likely option for funding a new business. Actually, banks don’t finance business start-ups. I’ll have more on that later, too. Banks aren’t supposed to invest depositors’ money in new businesses.

Business plans sell investors. Actually, they don’t well-written and convincing business plan (and pitch) can sell investors on your business idea, but you’re also going to have convince those investors that you are worth investing in. When it comes to investment, it’s as much about whether you’re the right person to run your business as it is about the viability of your business idea.

I’m not saying you shouldn’t have a business plan. You should. Your business plan is an essential piece of the funding puzzle, explaining exactly how much money you need, and where it’s going to go, and how long it will take you to earn it back. Everyone you talk to is going to expect to see your business plan.

But, depending on what kind of business you have and what your market opportunities are, you should tailor your funding search and your approach. Don’t waste your time looking for the wrong kind of financing.

Where to look for money

The process of looking for money must match the needs of the company. Where you look for money, and how you look for money, depends on your company and the kind of money you need. There is an enormous difference, for example, between a high-growth internet-related company looking for second-round venture funding and a local retail store looking to finance a second location.

In the following sections of this article, I’ll talk more specifically about different types of investment and lending available, to help you get your business funded.

1. Venture capital

The business of venture capital is frequently misunderstood. Many start-up companies resent venture capital companies for failing to invest in new ventures or risky ventures. People talk about venture capitalists as sharks-because of their supposedly predatory business practices, or sheep-because they supposedly think like a flock, all wanting the same kinds of deals.

This is not the case. The venture capital business is just that-a business. The people we call venture capitalists are business people who are charged with investing other people’s money. They have a professional responsibility to reduce risk as much as possible. They should not take more risk than is absolutely necessary to produce the risk/return ratios that the sources of their capital ask of them.

Venture capital shouldn’t be thought of as a source of funding for any but a very few exceptional startup businesses. Venture capital can’t afford to invest in startups unless there is a rare combination of product opportunity, market opportunity, and proven management. A venture capital investment has to have a reasonable chance of producing a tenfold increase in business value within three years. It needs to focus on newer products and markets that can reasonably project increasing sales by huge multiples over a short period of time. It needs to work with proven managers who have dealt with successful start-ups in the past.

If you are a potential venture capital investment, you probably know it already. You have management team members who have been through that already. You can convince yourself and a room full of intelligent people, that your company can grow ten times over in three years.

If you have to ask whether your new company is a possible venture capital opportunity, it probably isn’t. People in new growth industries, multimedia communications, biotechnology, or the far reaches of high-technology products, generally know about venture capital and venture capital opportunities.

If you are looking for names and addresses of venture capitalists, start with the internet.

The names and addresses of venture capitalists are also available in a couple of annual directories:

The Western Association of Venture Capitalists publishes an annual directory. This organization includes most of the California venture capitalists based in Menlo Park, CA, which is the headquarters of an amazing percentage of the nation’s venture capital companies.

Pratt’s Guide to Venture Capital Sources is an annual directory available online or in print format.

2. Sort of venture capital: Angels and others

Venture capital is not the only source of investment for start-up businesses or small businesses. Many companies are financed by smaller investors in what is called “private placement.” For example, in some areas there are groups of potential investors who meet occasionally to hear proposals. There are also wealthy individuals who occasionally invest in new companies. In the lore of business start-ups, groups of investors are often referred to as “doctors and dentists,” and individual investors are often called “angels.” Many entrepreneurs turn to friends and family for investment.

You’re on the funding round trail to secure cash to boost your start up or to take your existing company to the next level. If you’ve tried and failed at all the sources you could try without leaving your office, and you simply must travel with following seven suggestions for getting you there – and back – without doing it on a wing and a prayer, and without giving your bank balance too much of a pounding.

1. Why are you booking all this travel? Yes, I know, you couldn’t get funding sitting in the office. But that’s why you’re travelling, not why you’re booking it. Get a travel agent involved. They’re specialists and you’re not. Every trade has its tricks, and the travel business is no different. Giving a list of dates and destinations, and let them iron out the hassle. You could spend the time saved with the family to iron out the hassle of being away on another business trip. Hey, I’m just saying…
2. Set the rules. Don’t let the travel agent upsell you into upmarket hotels with complicated pillow menus and in-room saunas. You’re trying to generate cash on this funding round, not spend it. The hotel room is a place to sleep for one or two nights; you’re not moving in. Set a budget and have them work within it. Being clear at the outset helps them to help you.
3. Get on the chain gang. There’s something comforting in the familiar, and that’s what you’ll find if you work with the same chain of hotels. What’s even more comforting is that you’ll be able to tap into loyalty schemes that will make your trip cheaper. We’re trying to raise money here. See tip 2.
4. Travel light. You can move faster if you travel light. Get your packing down to a fine art, and manage with a carry-on bag. Be sure it’s a size that airlines will accept, and you can be the first to the cab rank when the flight’s landed, rather than watching a broken push-chair trundle round the baggage carousel. Look, it’s coming around again… I wonder if your case has gone to Birmingham, UK, rather than Birmingham, Alabama? Maybe that’s why it hasn’t appeared yet… Oops…
5. Eat out. What kind of crazy advice is this? Why would you eat out, when you’re staying in a hotel? Well, a couple of reasons, actually. Firstly, if you’ve squeezed the budget very tight, you may well be staying in an hotel with no restaurant, but even if you’re not, getting out in the evening will get you some exercise whilst you’re walking around to find the right kind of eatery, and secondly, you’ll get a flavour of the city you’re visiting, and that’ll come for nothing. Exercise and sightseeing at no cost? What’s not to like?
6. Whose money is it anyway? If you’re on the hunt for finance, chances are it’s your business that’s footing the bill, so consider this. How about paying for your own meals? It’s what you’d do at home, having shopped for groceries or picked a restaurant, so why not do the same on a business trip? In the grand scheme of things, it might save only a few pennies, but hey, it’ll all add to the profitability, even if only a tiny bit. Travel expense management software is a brilliant tool for keeping track of what you’ve spent, allowing you to reassure yourself that you’ve had value for money.
7. OK, you win. So, you want to do it yourself, all this travel booking malarkey. Go ahead – but do me a favour. Use some travel and expense management software. Failure to do that means the whole thing will be out of control, and no matter what it says on the plane ticket, you won’t know where you are financially.

Every day, across America, people are talking about the progress being made in medical research, or the support provided to patients and families affected by a devastating disease or illness. One thing that often gets lost in these conversations is the issue of money. Research can only move forward if there’s funding to support it. Nonprofit organizations and other support groups operate primarily from donations; and even fundraising activities require a budget of some sort. None of these can happen without money.

And, somewhere out there, right now, a group of parents is having that very conversation about the deadliest of all childhood cancers-pediatric brain tumors and brain cancer. What’s the latest in research? What kind of support is out there for the kids and families? Why isn’t more being done, and faster? It is the mission of the nonprofit organizations that support this worthwhile cause to provide answers to these questions, and they understand that the answers come through proper funding.

Research

Research on the causes and cures of pediatric brain tumors and brain cancer is ongoing, but often progresses at a slower rate than desired. There have, however, been some recent successes in this area of research, including the creation of a tissue consortium, and the publishing of a major study of medulloblastoma, a type of brain tumor typically found in children. (“The Genetic Landscape of the Childhood Cancer Medulloblastoma”; Science, published online Dec. 16, 2010.)

Support

Through a variety of programs and services, most nonprofit organizations work to meet the needs of these young patients and their families. Services such as support groups and various family events, as well as assistance with a variety of issues relating to care, treatment, and financial aid give these families the sense that they are not alone on this difficult journey.

Awareness and Education

Anyone who owns or operates a business understands the necessity of marketing. Awareness of the product or services offered is critical to the success of that business. Of course, successful marketing requires a sufficient source of funds to “get the word out.”

In that sense, nonprofit organizations are no different than any other business. In order to promote awareness of pediatric brain tumors and brain cancer, there must be a solid marketing plan in place. How else will the average person learn that every day, across this country…

• Nine families will learn their child has a brain or spinal cord tumor;

• Three families will mourn the loss of their child to a brain or spinal cord tumor; and

• Six families will transition to survivorship.

Funding for the ongoing research and essential services provided by the nonprofit groups comes primarily from a mix of events, direct response, online fundraising, and major and planned gift solicitation. For the most part, events constitute the predominant source of funds to back these activities.

With adequate funding, progress can continue that will improve the treatment, quality of life and long-term outcomes for children with brain and spinal cord tumors.

How does the old saying go? “No gift is too small; no kind gesture goes unnoticed.” Contact a nonprofit organization today to find out how you can help in the fight against pediatric brain tumors and brain cancers.

In our last article, we discussed some of the basic business expenditures involved with providing lawsuit funding for those individuals who need cash but cannot wait until their lawsuit is settled. Costs such as salaries, IT, legal counsel, etc. are all factored into the “cost” of pre settlement cash advance funding.

While all of the above are obviously necessary components of the lawsuit loan business, one of the most important aspects of the business is the compilation and analysis of paperwork. This post will explore what we call “chasing the paper” as part of the litigation advance business.

Application – The lawsuit funding process begins with an application where the front office takes down the personal information from the applicant and some basic details about the lawsuit such as the type of lawsuit, damages, attorney info and circumstances about the case.

Request for Information – After the application is completed, a request for information is sent via fax or email to the attorney’s office. Once the requested paperwork is compiled, sent and receive, the case can be considered for funding. The vast majority of lawsuits which are advanced cash are personal injury cases. Below are the main three pieces of paperwork needed to evaluate these claims.

• Police Report/Incident Report
• Damages
• Insurance Information

Analysis – The analysis of the above paperwork will allow the underwriter to assess the merits of the case and to more intelligently speak about the action when he/she ultimately has a conversation with the applicant’s attorney.

More Paper – In many instances, the documents received are simply not enough for the underwriter to make a preliminary evaluation. This may be due to oversight by the law firm or the fact that the firm does not yet possess the documents in question. In either case, administrative steps must be taken to try to secure these important papers.

Contract – Once the application for a lawsuit loan is processed, paperwork received and case underwritten and approved, the file moves into the approval department where a contract is drafted memorializing the agreement between the parties. Special care is taken to ensure the amounts, dates, captions, names, and all other material terms are correct. At that time, the lawsuit funding agreements are forwarded to the parties.

Contracts Back – After the contracts are prepared and sent, the process moves along but is by no means finished. Instead, questions frequently arise with regard to contract terms, drafting errors, amounts, or word usage. Most often these issues are resolved by the parties and their counsel. Once the funding documents are executed and received, the case is moved to its final stage – funding.

Funding – The transfer of money has never been as easy as it is today. Lawsuit funding companies use a variety of different ways to transfer money to their clients. Of course, checks are sometimes sent as in the old days, but more these legal loan outfits also utilize more modern forms of transfer such as wire transfer, direct deposit or wire houses. Since time is usually of the essence in these transactions, wiring funds is the most efficient manner or money transfer.

Post Closing – Once the case is funded and money received by the applicant, the collection/monitoring process ensues. In future posts, we will deal with this very important part of the lawsuit funding business in more detail. For purposes of this post, suffice it to say that pre-settlement loan companies have entire departments dedicated to updating and monitoring the cash advances in their portfolio.

Payment – All of the above is designed for this last phase of the lawsuit cash advance business where the money outlaid is repaid. When a lawsuit settles or otherwise comes to a conclusion, the attorney forwards the money to the pre settlement loan company The file is closed and money received and money re-deployed in search of profit.

Above we paint broad strokes as we discuss chasing the various forms of paperwork needed to facilitate a lawsuit cash advance transaction. Discussing the various steps in the process aids in the understanding of how the pre settlement loan business works. From this knowledge, applicants know exactly what to expect when seeking the relief provided by lawsuit loan companies.

Thank you for your interest in the litigation finance industry.

pmc

Much is spoken/written about the “costs” associated with obtaining a cash advance against the future proceeds of a pending lawsuit. Otherwise known as a lawsuit loan or pre-settlement funding, many companies offer cash now against the future resolution of a case. The costs associated with these transactions vary greatly. This post attempts a broad discussion of the history of pricing in the lawsuit funding industry.

The lawsuit funding industry was born to address the liquidity concerns of those individuals who were encountering financial difficulties while waiting for their lawsuit to be resolved. Because many jurisdictions were simply bogged down with thousands of cases, plaintiffs often had to wait months if not, years for their cases to be settled. Lawsuit funding companies offered clients immediate cash against the future proceeds of the case. The catch was that the “costs” associated with these transactions were very expensive, at least when comparing costs with other sources of funds.

So what is “expensive?”

Historically, lawsuit funding has been deemed a “last resort” source of money for those in financial need. I write “historically” because this business is relatively new and only in the mid 2000’s to the present have larger amounts of risk capital been deployed investing in pending lawsuit claims. When the business first started, near the end of the 20th century, lawsuit loan companies offered rates as high as 10% per month! Now that’s expensive. Clearly, in the majority of instances, persons who obtained funding at those rates were in desperate need of funds.

But it was not the investor’s greed that set the pricing. In any new business, mistakes are made but corrected and the business evolves through competition as others clearly see the potential of a return on their investment. Because of this history, more and more investors recognize the potential for a return on capital. Competition then takes hold of this potential profitability as investors analyze what is an acceptable rate of return for putting their money at risk. In most instances, this competition “trims the fat” off of the return and results in better pricing for the applicant.

We have witnessed this first hand in this business. And what this means is that the lawsuit funding business is becoming more and more efficient.

The days of 10% per month interest are dwindling fast. Currently, an applicant can expect to pay anywhere from 1.5% to 4.5% per month for lawsuit cash advance funding. This is a far cry from the original rates. Competition and better business efficiency has made this reduction in costs a reality. The trend is likely to continue. Which will undoubtedly make lawsuit funding more “reasonable” than ever.

Moreover, investors also benefit. As past mistakes are corrected and business models refined, investors are able to more accurately assess the risks to their capital. The understanding of risk is of primary importance to investors and they seek the preservation of capital first, and the return on capital second. As the business evolves, more and more “conservative” investors are likely to place their capital in these investments.

Thank you for your interest in the lawsuit funding business.

pmc

Funding a Startup is one of the most challenging aspects of starting a new business. When it comes right down to it you have to navigate venture capital firms, angel investors, and weigh what the capital is worth in loss of control of your own company. Many startups fail because in the early stages of the business they were underfunded in the development stages. Others fail shortly after launch even though they have an amazing product, but they ran out of funds to market the company and gain the critical mass needed to sustain operations. This is a painful thing to hear about because there are simple solutions to obtain Startup Funding and Business Credit to help turn your Startup into a Grownup. We have 3 questions that we would recommend any Startup ask themselves before seeking funding from outside sources.

1) How much money do you really NEED to get your startup off the ground? There is no doubt you are shaking your head at the near absurdity of this question however you would be surprised what you will find out about your business when you look at how lean you truly can run the business in the beginning. So many companies believe they need a huge storefront, high end furnishings, and a full staff the day they open their doors for business. For most this is a good 5 year goal but in the beginning you may be able to do as Apple did and start with an idea and a handful of talented employees. If you have not read Re-Work it wouldn’t be a bad idea to check it out as there are many principles that can save Startups quite a bit of headache in the long run.

2) Are you willing to become an employee at your own company? This too may sound like an odd question but when you decide to work with a VC firm in many cases you will be responsible to the investors in ways you may not have originally anticipated. There are stories from Silicon Valley to Dubai that all start with an enthusiastic entrepreneur and end with a burned out "employee-owner" who is forced to take their startup in a new direction because of the influence of their investors. Entrepreneurs beware.

3) What will happen within the first 90 days of getting the funding you need. There are companies out there that have a minimum $50,000 funding guarantee that makes sure qualified businesses can get access to the funding they need; however it is incredibly important you have a clear vision of what your priorities will be after getting funded. It sounds so simple but many times companies get funded without a prioritized list of necessities; and after getting more than enough funding they find themselves without essentials they should have procured from day one.