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Pre-Settlement Funding: What You Need to Know

pre settlement funding

If you’ve been injured in an accident, you may be entitled to pre-settlement funding. This type of legal loan can help you pay for medical expenses and other costs associated with your injury. Pre-settlement funding can provide a much-needed cash infusion while you wait for your case to settle.

However, there are some things you need to know before applying for pre-settlement funding. This blog post will discuss the basics of pre-settlement financing and how it can help you get through a difficult time.

What Is Pre-Settlement Funding?

As its name suggests, pre-settlement funding is a form of financing that can be used before your lawsuit settles. Legally called a cash advance, this type of funding is given to plaintiffs who have retained an attorney and need money to cover the cost of living while their case is pending.

It’s an advanced payment of part or all of your expected settlement that you agree to pay back once the case settles. But not all cases do settle, so it’s essential to be aware of the risks involved with pre-settlement funding.

How To Qualify for Pre-Settlement Funding

If you have a pending personal injury claim, your attorney may be able to help you obtain pre-settlement funding. Most pre-settlement funding companies such as and JG Wentworth use strict qualification criteria to determine whether you’re eligible for a lawsuit loan. Typically, the criteria are as follows:

1. You must have an attorney representing you for your injury case. You may need your attorney’s name and contact information, depending on the company.

2. Your case must be at least several weeks old; you can’t apply if you’re only beginning to build your case. Some companies will not accept filed pro see cases (meaning you’re representing yourself).

3. You must have an experienced, reputable personal injury attorney. This person should be familiar with your state’s laws and, ideally, have some experience with the type of accident that caused your injuries.

4. You must have a clear liability case against one or more defendants. If you’re unclear about who is responsible for your injuries, a pre-settlement funding company may not be willing to lend you money.

5. Someone’s negligence must have caused your injuries, and your injuries must be severe. For example, if you slipped and fell in a grocery store due to a wet floor and suffered only minor scrapes, a pre-settlement funding company may not be willing to lend you money.

6. You must have little to no credit history. People who have filed for bankruptcy or have poor credit records may not be eligible.

7. Your total damages must equal at least $25,000. If your case is worth less than this, you may not be able to obtain pre-settlement funding.

How Do Pre-Settlement Funding Companies Determine How Much to Lend?

Pre-settlement funding companies will look at the value of your case and reasonable attorney fees to determine how much they will lend you. They will then calculate the maximum amount they’ll lend based on these figures, and you can choose to accept or decline their offer once you see it.

What Are the Requirements for Paying Back Pre-Settlement Funding?

Pre-settlement funding companies will typically ask you to sign a promissory note and a repayment agreement. The promissory note is a legally binding document that promises to repay the loan within 120 days. You will be charged interest on the amount of money borrowed, and you may also be required to pay a one-time origination fee. If you miss a payment, you will be required to pay a late fee.

If you obtain a pre-settlement funding offer, ensure that your attorney reviews it carefully and looks over the repayment agreement before signing. Your attorney can help you understand these documents and determine whether this type of funding will be available.

How Does Lawsuit Funding Work?

Pre-settlement funding companies will typically offer you one lump sum of money in exchange for a percentage of your future settlement, usually between 20% and 40%.


You are now aware of the risks of an agreement to a cash advance offer and how it can affect you and your case. Now that you know more about pre-settlement funding and how to get one, it’s up to you to decide if this is the right option for you. Hopefully, the information you have acquired in this article will assist you in making an informed decision and taking control of your pending case.