Why do advances against cases have higher rates than traditional bank loan rates?
ALFA Members do not provide loans, and therefore traditional bank loan interest rates cannot apply to these funds. Non-recourse advances are provided in situations where there is an unknown outcome, an uncertain maturity date, and the recipient has no current means for repaying the funds advanced to them. These advances do not require repayment of the investment or any fees if the plaintiff does not receive a financial award or settlement when the case is resolved. If the case is lost or the defendant insolvent, ALFA Members forfeit their entire investment in that case.
