Is it debt?

No. Litigation funding is not a debt in the traditional sense. Although it involves the disbursement of capital by an external fund, such as Loopa, it does not create an unconditional repayment obligation for the client. If the case is unsuccessful, the capital provided is not returned, and no further financial burden is generated. This model is known as "non-recourse" financing: the fund only recovers the invested amount (and a previously agreed-upon profit) if the case is won or an effective economic recovery is obtained. If the litigation or arbitration does not have a favorable outcome, the client is not required to reimburse anything. How does it differ from conventional debt? Unlike a bank loan or traditional line of credit: - There are no installments or monthly payments - No financial interest accumulates - Personal or business asset collateral is not required - It is not recorded as a traditional financial liability on the balance sheet (although there may be other effects according to local accounting standards) The capital provided by Loopa does not appear as debt because its repayment depends solely on the success of the case. There is no legal obligation to repay if the outcome is negative, making this tool an effective form of financing without financial risk for the client. How is it accounted for? The accounting classification may vary depending on the jurisdiction and applicable accounting framework (e.g., IFRS or local standards). In general, since it is not a firm repayment obligation, it is not recognized as a payable financial liability, but rather as a contingent gan or a form of financing with characteristics similar to equity or venture capital. In more complex transactions, especially in companies with consolidated reporting or those listed on regulated markets, a specific analysis may be required. In those cases, Loopa can collaborate with the client's legal and accounting teams to structure the operation clearly and in line with regulatory requirements. In summary, litigation funding is not conventional debt, as it does not impose an automatic repayment obligation. It is a form of risk-based financing, where the fund only recovers the invested amount if the case is favorable. This allows companies, individuals, and law firms to advance their claims without affecting their balance sheet or taking on new financial liabilities. Want to finance a case without going into debt? With Loopa, the risk is ours.