Case cost funding vs. a working capital line: which does a firm need?

If the money is for the cases (experts, records, filing, discovery, trial), use case-cost funding. If the money is for the firm (payroll, rent, marketing, growth) while fees are pending, use a working-capital line. Many firms use both.

Case-cost funding. Non-recourse to the firm; repaid from the recovery in the funded case. The capital provider decides after its review. It keeps case expenses off the firm’s balance sheet and off the partners’ personal guarantees.

Working-capital line. A revolving facility sized on the docket’s expected fees. Repaid from fees as they arrive.

How to choose. Ask what the cash is for and what repays it. Case costs are repaid by the case; firm costs are repaid by the fee stream. Matching the money to its source keeps the rate down and the covenants simple.

A docket read first. Before either, a firm can ask Criterica Capital for a read of its docket: which matters carry the value, which carry the time, and when fees are likely to land. It sizes the facility correctly and often shows the firm needs less than it thought.

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