Also known as pre-settlement funding or lawsuit funding, this is a loan that is given to financially-starved plaintiffs to cater for their monthly bills as their court case is on-going.

In such a case, the plaintiff is normally in a state of financial strain due to some injury. Especially for a personal injury claim, court proceedings may be aggravating and tiresome. They can take months or even a couple of years for compensation to be done.

This money is mostly used to cater for utility bills and other bills the plaintiff may be responsible for. In the case of hefty medical bills, the plaintiff can use pre-settlement loans to clear these bills. There are also those who were paying mortgages and due to some form of personal injuries, cannot make due payments risking losing their homes. They could access these pre-settlement loans in order to continue paying their mortgages with ease.

Some of the circumstances that may cause a plaintiff to seek legal action for injury caused include but are not limited to:

  • Medical malpractice
  • Auto accidents
  • Premise liability
  • Wrongful death
  • General negligence



Financial strain brings about stress and anxiety that can ultimately lead to depression. This is especially true for persons who have injuries that have rendered them immobile, making it hard for them to go to work, acquire wages for cater for their financial obligations. With pre-settlement loans, the plaintiff is able to receive a ‘cash advance’ of their anticipated settlement to cater to their bills until a resolution on their claim is made.


Insurance companies or defendants may try to take advantage of the plaintiff’s financial struggles and offer them an unfair compensation in return for a speedy and easy payout.

What pre-settlement loans do in this matter, they offer the plaintiff a bargaining chip. If the defendant realizes the plaintiff is willing to take legal action, they will offer a better more just settlement to the plaintiff to avoid the tiresome trips to the court.


Attorneys are prohibited by the law from giving their clients any financial aid in the duration of the court case. A pre-settlement loan will allow an attorney to have peace of mind and to concentrate on doing his job, rather than trying to solve their client’s financial issues.

There is, also, nothing as disturbing as a needy client who is constantly pressuring their attorney to take a settlement. In this context, pre-settlement loans will allow attorneys to take the time they need, pressing for the interests of their clients.

Some attorneys will discourage their clients from outsourcing funds from pre-settlements companies as they think these companies will interfere with the case proceedings. On the contrary, these pre-settlement companies give the attorney the necessary tools in order for them to build a stronger case that will ensure maximum compensation of their client.

It is, however, good to note that the pre-settlement loans are not actual loans. They are non-recourse loans that are risk-free. It is encouraging to the plaintiff to know that if they lose the court case, they will not refund any money to the pre-settlement company.