Commercial litigation loans
Commercial litigation funding provides all businesses with the opportunity to protect their assets while giving their attorneys time to effectively fight lawsuit.
The most important detail to understand about commercial litigation funding is that they are not loans in the way that most people believe. In reality, they are cash advances to cover litigation expenses secured by a meritorious case, judgment, or settlement.
Ideally, businesses facing lawsuits search for attorneys willing to work on a contingency fee. The contingency fee arrangement naturally relieves some of the financial pressure for the business, but can also motivate the attorney to do all they can to win the case. However, even if an attorney is willing to work on a contingency fee, the business may still face other financial pressures.
Lawsuits can impact the ability to find investors, keep customers, and ultimately stifle a company’s cash flow. Depending on the nature of the lawsuit and the financial condition of the company, a lawsuit can force a business to take on debts that are difficult to service. The good news is that commercial litigation funding, also known as commercial litigation loans can help take the financial pressure off.
Law firms and plaintiffs who receive commercial litigation loans typically only repay the loan if they win the case. If they don’t, they’re not obligated to repay the commercial lending company. This is called a ‘non-recourse loan’ and it works out well for all involved, including the legal finance company.
Here’s what businesses and law firms should know about commercial litigation loans:
- A finance company will only fund commercial litigation that has merit and is very likely to be successful.
- Commercial litigation funding received by the law firm can be used in any way they chose to further the case.
- Commercial litigation loans are typically non-recourse loans. (If the law firm does not win the lawsuit, they are not obligated to repay the loan).
Looking for a Non-Recourse Loan?
Amicus Capital Group understands that lawsuits can financially threaten even the strongest business,. Our commercial litigation funding division can help take the pressure off.