Plaintiff Loan Costs (cont'd)

BridgePoint assists our clients in managing their total financing costs by:

• Encouraging borrowers to borrow only those amounts they absolutely require to get through their litigation without undue financial hardship;
  
  
• Offering to provide loans in stages such that borrowers do not incur interest charges on amounts not immediately needed
  (ie. a loan can be advanced at once, or drawn upon in regular instalments over time, with interest charged only on amounts drawn);
  
  
• Limiting loan amounts advanced to only 10% of BridgePoint's independent, conservative 'estimate of value' of a legal claim, thereby limiting interest costs as a percentage of a plaintiff's settlement value.

Sample Interest Calculation:

Assuming an interest rate of 26.0% (compounded semi-annually), an average loan size of approximately $10,000 and an average loan
term of 11 months⁽¹⁾, a borrower would incur interest charges, including compounded interest, of $2,524 plus a loan administration fee of $325 plus GST for an average total financing cost of $2,872. 

Anecdotally, this amount is significantly below the incremental settlement/award amount our loans have enabled our plaintiff borrowers to achieve relative to what they might have accepted to satisfy their claim without our financial assistance (please see Testimonials).

The chart below shows the interest accumulation on a standard, $10,000 Plaintiff Loan assuming a 26.0% interest rate and semi-annual compounding (and no interim payments) over a two year time frame:

(1)

It is important to note that while the average personal injury lawsuit may last from 3 to 4 years, statistically, our Plaintiff Loans are outstanding for only the final 11 months of this process (generally after a plaintiff's interim benefits have been reduced or cut off, and their savings depleted). In this way, our loans effectively serve as a financial "bridge" over the critical last leg of the litigation process.