Virtually all litigation financing is done through a fund.

If a fund has $1 dollar, it can only lend $1, the cost of capital for each loan must compete with equity-like returns, and the income is heavily taxed.

If that same $1 is invested in a bank, it can support $6 to $8 worth of loans, the cost of capital for each loan is the cost of term deposits, and Puerto Rico’s income tax rate is only 4%.