CASH ADVANCE

Definition

Cash received in return for a future cash flow which does not require monthly payments and is repayable upon the realization of a future asset. Cash received in advance of a future payment from settlement or other financial income source. Hard cash made available prior to a future cash flow being realized.

Facts

There are more than $12 billion in cash advances obtained each year in the United States alone. Cash advances are obtained from mortgages, pay checks, lawsuit settlements and hundreds of other future assets. Cash advances are also referred to as ready money because they make future funds readily available today. Advances are available in amounts as low as $500 and up to $100,000 in certain circumstances. Good credit is not required to obtain a cash advance because the lending company will be looking at the future cash flow only. Since advances are temporary in nature the amount of time until repayment is the single most important factor when determining the fee charged to issue the advance. Congress has not decided to engage any laws to regulate the industries the issue cash advances, however, states have begun to take up the issue. The attorney general of New York, Elliot Spitzer, settled with several companies in the litigation funding business. The primary subject of the settlement was fair disclosure of fees and terms to the consumer.

Financial Advice

It is very important to ask the funding company that you are applying with all of the fees that are charged. The fees should be clear and not excessive. The monthly percentage fee they charge is probably the most important. Whenever borrowing funds or obtaining a cash advance, make sure that the asset you are using is an appreciating asset and not a depreciating asset. Cars and computers are examples of depreciating assets and not worth borrowing for. Real Estate and Lawsuits are good examples of appreciating assets and are worth borrowing or obtaining a cash advance against. There are currently more than 200 payday loan companies and only 12 litigation funding companies. As the competition increases within these specialty finance areas, the rates of interest and fees will substantially drop and make funding more affordable.

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Links

http://www.platinumcashadvance.com/

http://www.speeddog.com/

http://www.soniccash.com