How It Works

Many people are aware that future income streams such as lottery winnings, which are payable over a certain length of time, can be sold at a discount from the actual face value, before the full maturity, for a lump sum of cash.

What most people do not know is that almost all income streams, whether it's a lottery winning to be paid over 30 years, a commercial lease agreement to be paid over 3 years or an invoice to be paid over 30 days, can be sold to a third party for cash.

The entire concept behind Benefunding is that we get you cash now for money that you are owed in the future by advancing you capital based upon the purchase of assets, rather than structured as a loan.

It is this single distinction that created a whole spectrum of business funding solutions - outside of the strict confines of the traditional finance system - that directly address the problems of restricted cash flow.

The amount that will be paid for your asset depends on the financial strength and the creditworthiness of the entity paying on that asset. The stronger credit the payor of the note has, the less likely there is to be a default and the lower the discount rate will be on the purchase.

The amount of the discount depends on three key assessments made on the note:

1. Collectability.The likelihood that the payors of the debt will pay on time. The risk of not being able to collect the money due affects the decision to take the deal and the discount rate.

2. Assignment. How complicated is the transfer of ownership of the debt instrument from buyer to seller?

3. Time Value of Money. How long will it be between advancing money to the seller and receiving collection on the debt? Is the time frame within profitability parameters?It's important to remember that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.