When you’re in the midst of a lawsuit, financial strain can add pressure to an already stressful, urgent situation. If you’re wondering how to keep your finances afloat, you might consider pre-settlement funding. But what exactly do these funding companies look at before deciding to lend?
Knowing the criteria that pre-settlement loan companies evaluate can help you understand your own case better—and boost your chances of getting the financial help you need when you need it most.
Main Factors Considered by Pre-Settlement Loan Companies When Evaluating a Case’s Strength
Liability/Fault
One of the first things a pre-settlement loan company will evaluate is who’s at fault, as this is the foundation of a strong case. Loan companies want to make sure there’s a clear path to victory, meaning they’ll look closely at all the evidence on-hand.
For instance, evidence like police reports, witness statements, video, or photos from the scene, and other documents play a significant role in establishing fault. If this evidence strongly points to the other party being responsible, your chances of receiving funding increase. On the other hand, if the fault is ambiguous, it may complicate the underwriting process, which could result in a denial or a lower loan amount.
Severity of Injuries
The extent of your injuries is another major factor that pre-settlement funding companies consider. Why? Because the severity of your injuries usually correlates with the potential value of your settlement. The more serious the injury, the higher the possible settlement amount, which means the loan company has a better chance of recouping its investment.
Let’s say you suffered a severe spinal injury that requires surgery and long-term rehabilitation. The substantially high medical bills and possible long-term disability make this a strong lawsuit for higher funding compared to a case involving minor injuries like a sprained ankle.
That’s why medical records are so important to funding companies. Ambulance reports, emergency room documents, and ongoing treatment records give underwriters a clear picture of your condition. Post-op and expert reports can further validate this, making your case even stronger in the eyes of the funding company.
Insurance Coverage
The insurance coverage of the defendant is the third pillar that pre-settlement loan companies lean on when evaluating your case. Why is this such a big deal? Because insurance policies are the primary source of funds for paying out settlements. If the defendant has sufficient coverage, it provides the loan company with the assurance that there’s money available to pay off the loan once your case settles.
The level of insurance coverage will also influence the amount of funding you’re offered. Higher coverage limits often mean larger loan offers, while limited or inadequate coverage might reduce the likelihood of getting funding.
Potential Damages
Finally, the probable damages in your case—both economic and non-economic—are also a major consideration. Economic damages include tangible losses like medical bills, lost wages, and property damage. Non-economic damages cover intangible losses such as pain and suffering or emotional distress. The higher the expected damages, the more likely you are to receive a larger pre-settlement loan.
In a scenario where you’ve not only incurred substantial medical expenses but also lost months of income due to an inability to work, the total damages would be high. This makes your case more attractive to pre-settlement loan companies, as the potential payout upon winning is much higher.
The Pre-Settlement Funding Process
Application Review: The First Steps
When you apply for pre-settlement funding, the process begins with a simple application. At this stage, the loan company will gather basic information about your case, often through an initial phone call. This includes details about the accident, who the defendant is, your injuries, and your attorney’s contact. This initial consultation helps the company determine if your case meets the basic criteria for funding.
Attorney Involvement: A Key to Success
The funding company will communicate directly with your attorney to gather more in-depth information about your case. This may include sharing medical records, accident reports, legal strategies, the expected timeline, and any potential obstacles.
The sooner your attorney responds, the faster your application can move forward. On the flip side, delays in communication can stall your application, leaving you waiting longer for the funds you need.
Underwriting Process: Behind the Scenes of Approval
Once all the necessary information is gathered, the underwriting process begins. This is where the loan company’s experts evaluate your case in detail, considering the mentioned factors above, such as fault, injury severity, and insurance coverage. They assess the strength of your case and come up with an estimate of your potential settlement value.
Funding Disbursement: Getting the Money You Need
If your application is approved, the next step is receiving your funds. Pre-settlement loan companies typically offer quick disbursement options, often within 24-48 hours of approval. You can choose to receive the money via bank wire or certified check, depending on what works best for you.
Once you have the funds, you can use them for whatever you need—whether it’s medical bills, rent, or other living expenses. There’s nothing else you need to do until your case settles, at which point your attorney will repay the loan from your settlement.
Factors That Can Affect Funding Approval
Case Weaknesses
Not every case is a slam-dunk. If your case has weaknesses—such as unclear liability, insufficient evidence, or minimal damages—it may be harder to secure funding. For example, if there’s conflicting witness testimony or a lack of concrete evidence, the funding company might view your case as too risky to justify a large loan.
Your Attorney
The cooperation and responsiveness of your attorney are also required in the pre-settlement funding approval process. If your attorney is uncooperative, it can lead to denial of your funding request. Companies rely on timely and accurate information from your legal team to make informed financial decisions.
Delays in Legal Proceedings
Legal cases can drag on for months or even years. If your case is likely to be delayed—perhaps due to a backlog in the court system or complicated legal issues—this can affect your ability to secure pre-settlement funding. Companies are more inclined to fund cases with a clear and timely path to resolution.
Changes in Case Dynamics
Legal cases can be dynamic, with new developments that can either strengthen or weaken your position. If your injuries worsen, or new evidence comes to light, this could mean additional funding. Conversely, if the defendant mounts a strong defense, or if new evidence undermines your claims, the funding terms might change.
The Takeaway
By understanding the factors that pre-settlement loan companies consider—such as liability, injury severity, insurance coverage, case strength, and potential damages—you can better prepare and increase your chances of approval. Remember, the more solid your case, the more likely you are to receive the financial support you need to see your lawsuit through to a successful conclusion.
If you’re facing financial difficulties while waiting for your settlement, consider applying for pre-settlement legal funding with Baker Street Funding. Our team is dedicated to providing fast, transparent, and reliable funding solutions tailored to your unique situation.
Don’t let financial stress weigh you down while you await your settlement. Reach out to us today at (888) 711-3599 for a free consultation and discover how we can assist you in getting back on track. Your peace of mind is just a phone call away.
