- This was posted on April 28, 2008

Starting a business is the dream of many Americans; an opportunity to have something that is our own and through which we can create something that will bring us happiness and help support our families to boot. But as anyone in this position knows, starting a business requires significant financial resources; often large loans are required to get the business up and running; and much time ordinarily passes before the business is able to turn a profit.

In order to procure the money that they need, many would-be entrepreneurs may choose to sell annuity payments from a structured settlement they have received. A structured settlement is an arrangement made following a court case involving a personal injury or wrongful death suit; the settlement itself is one that is paid out in payments rather than all at once. So instead of receiving a lump sum settlement amount in one check, those receiving a structured settlement are sent scheduled payments through an annuity that the defendant in the case has funded. While these payments may work well for many recipients for quite a while, they may require a more significant sum – especially in the case of attempting to set up their own business. Subsequently, they may choose to sell structured settlements to a purchasing company.

In this scenario, the payment recipient will essentially sell annuity payments to a buyer; they do not have to sell all of their payments – just as many as they need to sell in order to procure the type of funding that they need to start their business. Once the transaction is complete, the seller receives cash for structured settlement payments so that they don’t have to wait to have cash on hand for business costs. Conversely, the buyer of structured settlement annuity payments receives the pre-determined future payments that were sold in the transaction.

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