You’re tired of the low rates and returns available on traditional investments. You’re looking for a better place to put your money that’s not too risky. And then you learned about structured settlements, and thought about buying them. If so, consider a few things.
Got Cash? You’re going to need cash to pay off the holders of structured settlements. If you just happen to have lots of cash on hand, great – just remember that once you’ve paid the annuitant, you won’t be earning interest on the funds. If you don’t have cash on hand, how will you get access to it? What sort of interest rate will the lender charge you? Can you fit that interest into the discount rate?
Discount Rate. This is the figure at the heart of every structured settlement factoring transaction. The discount rate is “reverse interest” that you charge the structured settlement holder in order to cash them out. So, you will be paying them quite a bit less than they would have received over time. The discount rate is intended to cover your costs, as well as your profits. But don’t be tempted to make that rate too high, even if you think the buyer will accept your offer – a judge will have to approve the sale, and may not consider it reasonable.
Legal Help. The structured settlement factoring process is regulated by specific laws that vary from state to state. Unless you’re a lawyer, and very comfortable with the structured settlement process, you’ll probably want to hire one to help you draft your contracts and guide you.
Getting Noticed. There are lots of structured settlement factoring companies around, but a few big names dominate the market by their ability to advertise widely and through volume. You will need a way to get yourself noticed. A site like QuoteMeAPrice is a way to offer a deal to prospective sellers, and perhaps offering a better deal than the big guns is one way to get noticed. Still, the big players have history on their side. So, don’t expect instant success.
The Risks. Most structured settlements are administered by insurance companies, so there is little risk that a stream of payments you have assumed won’t get paid. But there are plenty of possible roadblocks that can prevent you from sealing the deal. The seller may change his mind and move to another buyer if he gets an offer for more money or faster turnaround. As noted earlier, a judge can nix the whole thing. And every state offers a “cooling off” period in which the buyer can walk away from the deal, in which case all your work and sunk costs will be lost. So, you want to buy structured settlements?
If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.
