If you are considering selling future payments, one of the first questions is simple:

How is a lump sum actually calculated?

At a basic level, it comes down to timing and value.Money today is worth more than money received over time.

When an offer is made, it reflects the value of your remaining payments adjusted to what that money is worth today

Understanding how that value is determined can help you evaluate whether an offer makes sense for your situation

What Impacts The Value

No two offers look exactly the same, even for similar payment streams

That is because several factors influence how a lump sum is calculated

• Payment amounts: - The size of each payment in your schedule
• Payment timing: - How soon or how far in the future those payments are received
• Total remaining value: - The full amount left in your payment stream
• Market conditions: - Rates used to calculate present value can change over time

These factors work together to determine what your future payments are worth today

How The Calculation Works

The process starts with your payment schedule

Each future payment is adjusted to reflect its present day value. Payments that are further away are discounted more than those arriving sooner

Once those values are calculated, they are combined into a single lump sum

A clear offer should explain

• How the value was determined
• What portion of payments is included
• Any fees or costs involved

This transparency helps you fully understand what you are receiving and why

The Bottom Line

A lump sum offer is based on the timing and structure of your payments and how those translate into present day value

The more you understand how the numbers are built, the easier it is to compare options and make a decision with confidence

If you want to see how your payments translate into a lump sum, Crescent Capital can provide a clear, no obligation evaluation so you can review your options with full transparency