Operating a successful business requires money. If you don’t have adequate funds, this shouldn’t be cause for alarm. There are multiple loan products out there, and you have vast options when it comes to financing your law firm. Many law companies use disbursement financing to settle lawyer’s fees or fund client’s disbursements when necessary.
What is disbursement funding?
Disbursement funding is money offered to legal firm to fund payments on behalf of their clients. This is normally paid for goods, services, or sometimes legal services. It involves paying out money to a business’s operating budget. With disbursement loans, you enhance your spending power and can easily cater to your company’s requirements.
Why is disbursement funding essential? It’s a potent tool for firms seeking to draw more clients via alternative billing. It’s designed to aid SME law firms, commercial litigation firms, personal injury firms, and many others to achieve growth without cash flow implications. With this type of funding, you can cater to your expenses with ease. What’s more? The costs will no longer be a barrier to continuing with claims.
What are the distinct types of disbursement funding?
There are two main types of disbursements. These are;
- Delayed disbursements
- Controlled disbursements
A bank avails a controlled disbursement to corporate clients to improve their cash flow. It allows banks to reschedule and also monitor disbursements regularly. Similarly, delayed disbursement funds involve dragging the financing process via cheques from banks in remote areas.
Here are steps to acquire disbursement funding:
To qualify for disbursement funding, you must have a written document as proof that you meet the auditing process.
1. Fill an application
To apply for disbursement funds, you must fill an application form seeking funds for the smooth running of your company. The process involves sending an application letter to a case manager who will review your application and eligibility qualification. You need a few documents and details about your company to qualify for funding.
2. Receive an application response
Once you submit the application and the essential documents, the case manager will review your application to determine your eligibility. Be sure to attach all the necessary papers to improve your chances of getting the funding and save time. Once this is done, you’ll get a response within 48 hours.
3. Receiving funds
If you qualify for disbursement funding and agree to the rules and conditions of the lender, you’ll receive the funds into your account. You’ll also get disbursement documents showing the fee deducted from the settlement. Some of the costs to expect are;
- Legal fees
- Attorney’s fees
- Funding liens
- Health insurance
4. Submit the essential documents
The administrative officer requesting the payment should submit different documents. These include a requisition voucher or invoice for signatures of the authorized account administrator. Also, you must present an expenditure description and expense receipts. That’s not all, though! You require supporting documents to verify that the expenditure meets the company’s guidelines.
The bottom line
Acquiring disbursement financing for your business is pretty straightforward. You only need to fill an application form which takes a few minutes. The process isn’t long either. Most lenders will disburse the funds within 48 hours. To acquire a disbursement fund, only apply with reputed lenders to avoid hidden charges or hefty interest rates. Also, inquire from the lender about all the rules and conditions before submitting your application.