Law firms often face significant financial pressure, as much of the income depends on client case settlements. Attorneys throughout California trust Fund Capital America for pre-settlement law firm funding services.
We offer non-recourse investments, which you or your clients never pay out of pocket. You can be approved and funded on the same day once we receive the necessary signatures and information, such as accepted liability, a copy of the police report, a medical bills summary with amounts, and images.
As an attorney, you’re protected from the ethical issues described in the state bar related to self-funding. Your law firm’s cash flow increases while you wait for your client’s personal injury claim to settle at a fair amount.
Why Law Firm Financing Is Crucial for Growth in California
FCA provides the much-needed working capital for law firms in California so you can better serve your personal injury plaintiffs. It’s risk-free, as all repayments are taken out of the case winnings with no hidden fees, prepayments, or out-of-pocket fees.
Choosing non-recourse loans can put you and your client on an even playing field when facing better-funded defendants. Our funding can give you the financial breathing room to wait out bigger settlements instead of succumbing to the pressure to accept the first deal offered. It can also help you afford to work on a contingency fee basis and take on more clients.
You can use our funding to cover the costs of building a better case, including paying for travel, hiring expert witnesses, and discovery costs. You’ll be able to outsource workers for a wide range of services, pay your office rent and utilities, and grow your business through advertising.
Types of Law Firm Financing in California: Pros and Cons
The following are the pros and cons of the currently available options for California law firm financing.
Business financing with a traditional bank loan
A traditional bank loan is commercial financing that qualified businesses like law firms can obtain. The benefits of pursuing a traditional bank loan include longer terms and lower interest rates than other forms of funding.
The cons of obtaining a traditional bank loan include the amount of time it takes to approve and receive the money, along with the documentation requirements. You’ll likely need good credit to obtain a loan from a bank, and you may need to demonstrate that your business is in good financial health. Sometimes, the lenders must know how you intend to use the money before approval.
Obtaining a line of credit
A line of credit operates like a credit card, helping you cover short-term expenses and keep your business running smoothly as you wait for your client’s case to settle.
The pros of obtaining a line of credit are that they’re accessible, even if you’ve been denied a bank loan, and you can spend the money on whatever you need. A line of credit helps you manage cash flow, as you won’t have past-due invoices piling up as you wait.
Some negative aspects that come with lines of credit include the multitude of fees that can be tacked on, like monthly maintenance fees, use fees, draw fees, wire transfer fees, payment processing fees, early repayment penalties, and more. They also tend to have higher interest rates than traditional business loans and may have short repayment terms.
Non-recourse legal funding for attorneys
FCA’s legal funding in California is risk-free, as we only take on cases we believe will pay and only expect repayment from the settlement money. It’s a non-recourse loan, so neither you nor your client ever pays out-of-pocket.
We don’t use credit scores, and our funding is based upon future winnings, so we can get the money to you and your client fast, often within 24 hours. This provides the capital you need to work while easing your client’s mind.
We fund most personal injury accident cases, including auto accidents, dog bites, construction accidents, product liability, medical malpractice, nursing home negligence, and more. Contact us if you’re unsure whether your client’s unique situation qualifies for funding.
Securing Funding Based on Case Receivables
After we learn the case details, we offer our law firm loans in California based on the offer’s value. Our underwriter calculates this based on the information presented to us, including the case value, the financial impact of the plaintiff’s injuries, and the cost of the entire legal process.
We try to make it easy for you to quickly get the law firm cash flow solutions you need. You can secure funding based on your future case receivables to better serve your client now.
Using Funding for Specific Purposes
Some of the best practices for managing your law firm’s cash flow and finances include:
- Obtaining law firm funding to cover the costs as you take on contingency-based cases and expand your caseload
- Using California law firm loans to strategically grow your firm by investing in marketing campaigns, upgrading your office technology, hiring more staff, and purchasing new office equipment and legal software
- Using funding to pay for the various legal expenses of higher-value cases, like travel costs, administrative fees, hiring expert witnesses, obtaining depositions, and more
- These expenses are repaid once you win your case, so you can keep the lights on as you await a larger settlement
Risks and Considerations of Law Firm Funding
Taking on debt through a traditional bank loan or line of credit can be stressful, especially if it comes with high interest rates or quick repayment timelines. This is why choosing a law firm cash advance with FCA is often the better choice. We offer risk-free small law firm financing that California attorneys appreciate.
Contact FCA Today
Ready to find out if you qualify for legal practice financing in California? Contact Fund Capital America now. We serve all cities in California, including Chula Vista, Bakersfield, Sacramento, Huntington Beach, and Fresno. Just submit your application, provide the case information we need, and you’ll get an offer within 24 hours.
Frequently Asked Questions
How much funding can I realistically expect to obtain for my firm?
All FCA attorney loans in California are unique, and the amount you can expect to obtain depends on the case details. Call us or fill out our online form to learn more. You could qualify for funding ranging from $500 to $100,000.
What are the typical interest rates and repayment terms associated with law firm funding?
Depending on the lender, law firm financial solutions’ interest rates and repayment terms may be comparable to traditional business loans. Speak to an FCA associate about the terms of your non-recourse loan.
Should I consult with a financial advisor or expert before seeking funding?
If you choose law firm funding options like bank loans or a law firm line of credit in California, it’s best to consult a financial advisor to ensure their terms and conditions suit your business needs.
Are there any tax implications for receiving funding for my law firm?
Sometimes. When you obtain California legal financing and use the proceeds to support an investment, or you lose the case and receive a 1099 from the pre-settlement funding company, the cash advance is taxable. However, In most cases, it isn’t taxable money.
