Tips for Selecting a Legal Funding Company

Because the pre-settlement funding industry isn't well regulated in America, there is a wide disparity between the best legal funding companies and the worst. Some companies charge high interest rates or hidden fees, which is why it's important to know what to look for when you're searching for a trustworthy lawsuit funding company.

Here are some tips for navigating the sometimes perilous waters of the legal funding industry:

• Search out the names of a dozen different legal funding companies, then check out their websites to see what they have to offer. Make sure your read through client reviews on impartial sites like Yelp or Google+, and talk to your attorney about the legal funding companies he or she knows by reputation.
• Look for companies that have been in the business for a while and that have good track records.
• Weed out any companies that charge upfront or monthly fees.
• Try to determine if a company is a funder or broker. You should always select a funder over a broker so you can avoid paying brokerage fees.
• Compare interest rates among companies. Be sure you know the maximum rate that a company can charge. Select best lowest rate legal funding company.
• If a company makes a promise, ask to have it put in writing, then make sure you read the full contract—including the fine print—before you even think about signing it. You should only put your signature on the contract if you're completely satisfied with the terms. If you have any concerns, talk to your attorney before entering an agreement for pre-settlement funding.
• Make sure that the company that you select won't charge you more than your settlement amount.
• Check to see if the company is a member of the American Legal Finance Association (ALFA), an organization whose members are governed by rules that regulate lending amounts, disclosure requirements, conflicts of interest, and more.