How a Commercial Lawsuit Loan Can Keep Your Business Afloat

With the high costs of litigation today, a commercial lawsuit loan can be the difference between your company surviving the often-long legal process. Consider the following ways a commercial lawsuit loan can benefit you if your business ends up in court.

What Is a Commercial Lawsuit Loan?

It is important to understand how a commercial lawsuit loan works to assess its real value. A wide range of independent funding companies offer commercial lawsuit loans. These firms will advance money to you on the assumption that you will win the litigation you are involved in.

If your firm is the plaintiff in a commercial lawsuit (that is, if you believe your firm has been wronged and you have filed suit through an attorney) you can approach a commercial lawsuit loan firm, and they will review your case. If they feel your odds of winning the case or getting an out-of-court settlement are good, they will advance money to you in an amount based on their estimate of the potential settlement or judgment. You do not make payments on the advance. It is non-recourse funding, as you only pay it back if you win your case or settle out of court.

In most cases, "loan" might be a misnomer, as the funding firm is advancing you the money and taking the money back with the addition of a fee.

When Winning Isn't Everything

You might have a great case to make in your suit. But what if your business can't survive the time it takes to fight it?

Here's an example for a small business. The National Flooring Safety Institute estimates a "slip and fall" lawsuit could cost a small business $50,000 to $100,000 to defend against. Suppose you win that suit and file a countersuit to recoup your costs.

Can your business handle $100,000 of additional outlay while you fight the suit? Many businesses have won their legal battles but lost the war, being forced into bankruptcy proceedings because they could not meet their ongoing obligations and the cost of litigation.

Enough for Your Needs

Depending on your particular circumstances, commercial loan lawsuit funding companies can advance up to $10 million. You also can request funding as low as $10,000. This funding vehicle can help large and small firms.

Defending a Variety of Needs

Business is complex, and your firm can become involved in a wide variety of legal disputes. Commercial loan lawsuit firms will advance money on real estate disputes, copyright claims, patent infringement claims and more.

Whatever You Need it For

The proceeds of a commercial lawsuit loan can be used for any legitimate business need. This can be the difference maker for keeping your business afloat during litigation.

Not only can you meet cash flow obligations such as payroll expenses or accounts payable, but you can use your commercial lawsuit loan proceeds to fund business expansion. This type of funding can allow you to continue to take advantage of growth opportunities, even if your business' revenues. now reduced by litigation costs, wouldn't otherwise justify it.

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