A broker can help you find an investor that offers pre-settlement advances on terms that work for you. But lucky for you, if you’re reading this you’ve already found someone who can help you directly. (Hint: Cherokee Funding.)
As a direct funder, we cut out the middleman to save you time, money, and to help you get funds to cover what you need to cover…now.
The Difference Between Direct Funding and Brokers
Chances are, if an individual is in need of a pre-settlement advance – sometimes referred to as a lawsuit cash advance – the situation is dire. When you need funds, waiting 48 hours, or even 24 hours, can sometimes be too long.
So, what are the benefits, and the importance, of using a direct funder instead of a broker? For starters, it streamlines everything. Just like anything else, the more people you add into an equation, the more convoluted things get – not to mention the more expensive. Everyone expects to be paid for their efforts, even if they are nominal to your cause.
Who Are Lawsuit Brokers?
Here’s a simple scenario:
Say a client has hired an attorney to bring a lawsuit to court. A broker will help that client find an investor who can help with a pre-settlement advance on terms that work for that particular client.
This is how the broker process breaks down:
- Lawsuit funding brokers speak with the client
- They gather all of the necessary materials of the case
- They research to find lawsuit funders
- They submit the case to several funders to see who is interested in the case
- They monitor the status of the case, including fielding calls and questions from the client
- They forward the funding agreement to both the client and the attorney, when and if there is one
- They field all questions regarding the contract and the terms of funding, which often includes a lot of additional back and forth among the funding company, the client and the client-attorney
- They send the signed contract back to the funding company from the attorney and client
- Lastly, they confirm when the client actually receives the money
If it sounds like a lot of back and forth, that’s because it is.
And, brokers expect to be paid every step of the way for their efforts. Their fees are added on to the amount of the contract, which can range, on average, to be anywhere from 15–20 percent.
I would be remiss not to mention the clients in these cases are probably going through one of the worst events of their lives. They have, in fact, just been in an accident after all.
For legal funding clients, the amount owed back on a cash advance is not calculated on the funding the client actually receives, but on the cost of the contract, which is also why legal funding is not classifiable as a loan. For all intents and purposes, it is an investment. Broke, s on the other hand, charge a portion on top of those funds – they are paid upfront by the funding company and this amount is added to the overall funding amount received by the client – adding unnecessary costs to the plaintiff when, as direct funders, we gather all of the necessary information from the client and attorney, submit it to underwriting and have an answer, in most cases, within the same day. The best outcome for the client and attorney is to fund directly, cutting down on both the time and expense of this process.
How the Direct Funding Process Works
I can only speak for Cherokee Funding when I say this, but the application process is very simple; although, we only fund clients after speaking with their attorneys first. There is never an employment verification or a credit check – because the funds we provide are based solely on the facts of the cases – and our contracts are written to protect plaintiffs in the event their cases do not settle.
We are a member of the American Legal Finance Association (ALFA), which provides a layer of comfort for our clients; they know they are working transparently and with the industry’s best. At Cherokee Funding, we take pride in our membership with the ALFA. We are consistently proving our adherence to industry best practices, including the way in which we issue cash advances, and how we go about recovering repayment when applicable.
Cherokee Funding has provided legal funding to tens of thousands of cases by offering the best possible combination of funding solutions to meet almost any need out there.
If you have recently been in an accident and have found yourself standing at the crossroads of considering whether or not you should work through a broker or directly with a direct funder, I hope this provides you with some clarity during what I know to be an otherwise confusing and stressful time.
If you have any additional questions about lawsuit brokers, or legal funding in general, please leave me a comment below and I’d be happy to get you an answer – and, I can always be counted on to give my opinion, too.