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Disbursement Funding: What It Means And When To Know You Need One

Disbursement Funding: What It Means And When To Know You Need One

. 2 min read

When you want to make a claim after a case has been settled, you'll have to fill a disbursement form. Funding disbursements are always key considerations that your attorney makes when preparing a legal budget. In the past, litigation funders only considered cases that met a significant damage threshold. As a result, it wasn't easy to get disbursement funding.

However, the funding market has grown and has new products that can help you to make claims. This article highlights what disbursement funding entails and when to know if you need one.

What's Disbursement Funding?

Disbursement funding is an amount of money used by solicitors to pay for disbursement payments on their client's behalf. This payment may be made for services or goods received or for legal proceedings' outcomes. Most solicitors prefer using loans to fund disbursement because it creates extra cash flow within the company.

Types of Disbursement Funding

There are primarily two types of disbursements: delayed and controlled disbursements.

Controlled disbursement is a cash flow management service that a bank avails to corporate clients. It enables banks to reschedule and review disbursements regularly. As a result, they maximize the interests that they earn from clients' accounts because of delayed time.

On the other hand, delayed disbursement refers to dragging a payment process by making payments with a cheque drawn from a bank in a remote region. Initially, when banks were processing payments after receiving paper checks, the money would be debited to the payer's account after about five days.

Steps Of Applying For Disbursement Funding

  • Filling out an application form
  • Sending the application to a dedicated case manager
  • Receiving feedback from the manager after four hours
  • Submitting required documents required for processing the application
  • Receiving application decision (this may take 48 hours)
  • Receiving funds in your account after agreeing to the terms and conditions

Expenses Listed On A Disbursement

Disbursement documents show the fees that are deducted from a settlement. Some fees or costs that may be listed on your disbursement include:

These are the costs that you pay for pursuing a case. They include money paid to secure witnesses, setting up depositions, and filing paperwork.

Attorney Fees

This is the amount of money that you pay an attorney in exchange for handling your case or claim.

Medicare Or Health Insurance

These are deductibles and copayments made to a health insurance company if insurance coverage requires reimbursement for expenses related to an accident.

Funding Liens

This is the money that a person borrows to keep their family afloat as the case is being resolved. It may also include the outstanding child support balances that you owe.

Not every client has liens on their disbursement document. However, attorney fees, insurance company deductibles, and copayments are rarely missed. Understanding a disbursement document may be complicated. It's best to ask for help from professionals because they'll help you keep costs down and negotiate expenses with healthcare providers.

The Difference Between Expenses And Disbursement

Some people interchangeably use the terms expenses and disbursements. However, these two are different. Expenses refer to the money used to operate a business to boost profits. It may be used to pay employees' salaries, buy new equipment, or market the company.

On the other hand, disbursement refers to an amount of money paid on behalf of an individual by a company or agent.

Disbursements are expenses that are recorded differently in annual reports. Disbursements have their category, while expenses are broken down into various categories.

When To Know You Need A Disbursement Funding

You may need disbursement funding when you don't have enough money to pay your attorneys or settle the required legal fees. Fortunately, many companies can offer you a disbursement loan if you have a good credit score.


Part of the expertEasy writing team, Laura is from the UK and has a keen interest in Business, interior design and decor, home improvement and thriftiness in all things around the house and garden.