Poor management combined with insufficient cash flow can be the prime reasons for the failure of a business. This holds true for legal businesses as well. Even if a law firm has a flourishing practice and cases are settled conclusively, they fail to generate a steady flow of income.
Law firms, like any other successful business, need the cash flow to drive ahead. Law firms generally tend to look up to banks and other traditional funding resources to bridge the cash-flow gap. However, they do not get the business funding in Louisiana approved quickly in most cases from traditional lenders. Banks look at the law firm’s contracts and the value of assets held by the owners/partners. They scarcely understand the value of the cases in progress and do not sanction loans based purely on the value of pending lawsuits.
Working a Repayment Plan
Another major problem is convincing banks about the repayment on time. Law firms do not have a fixed payment cycle, unlike other businesses. A case may drag on for several months or even years which can affect the flow of funds. This makes it difficult for law firms to commit to a repayment plan. These reasons make it difficult for banks and traditional lenders to approve business loans to law firms.
Alternative funding is becoming an increasingly popular option among law firms looking for business funding solutions in Louisiana to manage their legal business better and ensure steady growth. This is an innovative option that can help legal businesses get the funding they need within a short period of time and without being subjected to lengthy processes and loads of paperwork.
Louisiana alternative lending firms offer business funding to law firms the provision of cash advances based on settled litigation claims. These are cases in which the appropriate authorities have evaluated the costs and agreed upon by all the parties concerned, but the payment is yet to be done.
How Alternative Funding Works
This type of alternative funding model suits the funding needs of law firms and provides them with easy access to the financial and working capital in Louisiana resources they need. Top alternative funding firms require law firms to have a physical presence in at least one of the 48 contiguous states.
Alternative funding is making a huge difference to legal firms looking for quick and easy funding measures. It offers law firms handicapped by poor cash flows the opportunity to raise funds without spending time explaining to the lenders how they intend to repay or gathering various documents to back their loan application.
The Mandatory Requirements
Law offices looking to raise funds through alternative lending resources must pass the basic qualifying marks. They must have been in business for at least one year in the United States and have at least $90,000 or more in annual revenues. The revenue for every month must be over $7500 for the past three months.
Law firms searching for “business funding near me” to raise funds for managing their cash flow or business expansion needs must make sure they partner with a reputed and established funding service to get their funding needs to be approved speedily and with minimum hassles.
For more information regarding business funding in Louisiana visit: https://www.altfunding.com/locations/louisiana