Buy Future Payments

Written by Jacey Harmon
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There are a host of companies that buy future payments from businesses and individuals alike. These companies are often called funding or advanced funding companies. For providing this service, they will pay a percentage of the payment due. What percentage they pay will depend on the quality of the payment and how long it takes to get the money back. There are a variety of different payments that can be sold to funding companies.

Payments That Can Be Sold

Individuals that are receiving installment payments may sell them to a funding company. Most funding companies focus on structured settlement payments. These payments are provided by a settlement from a lawsuit. The payments are typically guaranteed by an annuity or government bond fund. The high probability of the payments being made is a reason why funding companies focus on structured settlements.

Funding companies can also provide advanced funding to individuals who hold a private mortgage note. Some homes are purchased through private mortgages that require the seller to take the role of a mortgage company. If the owner of the note is tired of dealing with the payment stream, advanced funding companies will buy the future payments. Lottery winners who are receiving annuity payments from a lottery commission may also choose to sell future payments to a funding company.

Businesses that utilize invoices may choose to sell them to funding companies. There are several advantages for a business to consider selling invoices. The transaction does not create debt on the balance sheet. Since the business is selling future payments, the funding company will not request a share of the business like venture capital firms will. Selling invoices also eliminates the need to use equipment or real estate as collateral for getting a loan.


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