Legal Funding FAQs

What is pre-settlement funding?

Pre-settlement funding (or a lawsuit loan) is a risk-free cash advance for victims pursuing a legal battle. That means that you can borrow money against your future settlement or award to use to pay your bills and other expenses and not pay anything back until the case successfully concludes and the proceeds are paid.

Are lawsuit loans and pre-settlement funding the same thing?

You might hear pre-settlement funding referred to as lawsuit funding, settlement advances, lawsuit loans, lawsuit cash advances, or pre-settlement loans; however, it all has the same meaning. However, some lenders are engaging in misinforming consumers online by claiming that lawsuit loans must be paid back. The truth of the matter is that lawsuit loans, or pre-settlement funding, do not have to be paid if you lose your case. This is a non-recourse financing type of financial agreement and an investment in the outcome of your pending settlement or verdict. We are advancing money to you because we think your case is strong enough to win and pay us back.

If you don’t win, you don’t pay back your lawsuit loan. We take the loss.

What is the funding process?

• The first step is to apply either online or by phone at (888) 711-3599.
• Secondly, underwriting will analyze the legal merits and parties involved, the strength of your litigation, and the defendant’s ability to compensate for damages.
• Once approved, you will get a funding contract that can be sent via email, fax, or FedEx.
• Once you and your attorney complete the agreement, your funds will be sent to you within 1-2 hours on a business day before 3 pm (eastern time). If you fund your advance after 3 pm (eastern time), then your funds will be sent the next business day.

Pre-settlement funding qualification.

An attorney must represent you to pre-qualify. You must be 18+ to request funding. Your case must be secure and have a high probability of winning it.

How can lawsuit funding help me?

Pre-settlement funding can help bridge the gap between your accident and your settlement. If you need money but can’t work and have all types of bills because of your accident, a settlement advance could be the right decision for you. If you receive a settlement advance to help cover living expenses, it gives your attorney ample time to make sure you get the most value out of your settlement instead of settling sooner because you need cash now. A lawsuit advance helps you get through today so you get the most out of your settlement award tomorrow.

How much money can I get?

The highest amount we will advance you is 20% of what your case is worth at the moment—if approved. The size of your lawsuit/claim and other crucial unique information about your case will be the key to advancing you with the funds you need. Baker Street Funding funds from its own private fund, and if we deny you, we work with companies that can offer to fund between $1,500 – $2,000,000 + depending on the strength of your claim.

How are funds disbursed?

Pre-settlement funds are sent directly to your personal bank account under your name or to the personal account of a family member under specific requisites and proof of account ownership. The money can also be overnighted via FedEx to your home address.

Can I get additional funding?

You can get additional funding as long as your case supports it. Baker Street Funding buys out most pre-settlement funding agreements from other companies. We offer plaintiffs the ability to consolidate their previous advances and save money on future payments. Not every case is large enough to justify multiple funding, but 80% of the additional claims we underwrite get re-approved for more funding.

Criteria to obtain additional funding

As long as your legal action is significant enough to warrant compensation, you may be able to get an additional advance.

1. Your claim must have progressed since the last time you received a pre-settlement advance, either procedurally or through the plaintiff having further medical treatment.
2. The case value needs to merit additional funding.
3. There can not be any open appeals.

Are there any risks involved with pre-settlement funding?

No, pre-settlement funding (or lawsuit loans) have no risk. In the adversity that you lose your legal case, you will no longer be tied to paying anything back.

How long does it take to receive the cash advance?

We will get you your legal funds as soon as possible. We generally approve funding within 24 hours of receiving all case documentation. Once your application is complete and your attorney verifies the details of your case with underwriting, if you are approved for a lawsuit loan, you will receive a funding agreement for electronic signature or by fax the same or the next business day. Once you and your attorney sign the contract, your funds should be available within a few hours or, at the most, the next morning (business day).

Can I get a pre-settlement advance if I don’t have an attorney?

No funding company will provide funds without an attorney’s representation. Our underwriter will need to speak to your attorney in each and every case with no exceptions before agreeing to buy a portion of your coming settlement. If you need an attorney, please get in touch with us, and we will recommend you a great attorney.

Who can apply for funding?

You can apply for pre-settlement and post-settlement funding if you are represented by an attorney and have an active personal injury, civil rights, or employment claim.

Do I qualify if I don’t have a job or good credit?

Settlement funding is strictly based on your case’s merits and outcome; therefore, there is no job requirement, no credit check, and no monthly payments. Just like every investment, pre-settlement advances have a high risk for funding companies. The risk we take is that we do not get paid back if your case is not successfully settled or won.

What are Baker Street Funding’s interest rates?

Baker Street Funding’s contracts are custom-tailored to each case, and our rates are decided on a case-by-case basis. We have some of the lowest rates in the industry, and we typically price contracts anywhere from 2% flat for attorneys and from 2.95% to 3.4% monthly non-compounding for plaintiffs. The rate does not rise over time and is set until your case settles. To protect our clients, Baker Street Funding stops all charges if your case takes longer than three years to conclude. The most you will pay will be three years of interest. This eliminates the risk of exorbitant interest rate changes over time, especially if the case takes 3 years or more to conclude.

Does my attorney determine my approval amount?

Your attorney can and should advise you on choosing the right pre-settlement funding company. While your attorney can not pick what funding company you choose to work with, we encourage clients to speak to their attorneys throughout the lawsuit funding process to understand the requirements for approval.

Can I pay off my lawsuit loan before my case resolves?

Yes, you can pay off your lawsuit loan early without incurring a prepayment penalty. Remember, pre-settlement funding is non-recourse, so if anything goes wrong with your case and does not settle in your favor, and you have already started to pay off your loan, you won’t get those payments back.

What can I use a Baker Street Funding lawsuit loan for?

Our lawsuit loans are solely for any kind of important expenses such as medical bills, day-to-day costs, rent, etc., and they are not permitted to be used to pay attorney’s fees.

Am I a good candidate for a pre-settlement cash advance?

Baker Street Funding aims to revolutionize the legal finance sector, ultimately improving the system for every plaintiff in need. Today, we’re able to offer significant funding for plaintiffs facing a financial challenge.

What is the minimum and maximum I can borrow from my case?

With a Baker Street Funding settlement loan, the minimum amount you can take out is $1,500 in most states, and the maximum is $2,000,000 in select states.

What is the process for plaintiff lawsuit funding?

If your client wants to apply for funding, they will need to fill out the application form or answer a few questions from one of our team members to determine initial eligibility. Baker Street Funding will then ask you for some documentation surrounding your client’s claim. Generally, we will require documentation establishing liability, injuries, and insurance information from the defendant. Once we receive those documents, we will review the claim and, most times, will be able to make a funding decision immediately after. If we have additional questions or need clarity regarding certain documentation, we will email you our questions. Once those questions are answered, we will then be able to make our funding decision. Once a funding decision is made, we will provide you and your client with a copy of our funding agreement. After reviewing the agreement with your client and answering any questions you may have regarding the agreement, we will ask the client to execute the paperwork and have you provide us with acknowledgment of our lien. After receiving both client’s signature and the attorney’s acknowledgment, we will release funds to the client in the manner they request (bank wire or check).

How do you decide how much lawsuit financing a plaintiff can get?

After discussing your client’s needs and financial situation, we will analyze the claim. We base our funding decisions on our perceived net present value of the claim and will structure our funding amounts based on that value and the client’s needs.

What are the minimum funding amounts for plaintiffs?

Baker Street Funding will advance a minimum of $1,500 in funding to plaintiffs involved in non-settled claims. On settled claims, we require that the gross amount due to the plaintiff be no less than $50,000.

What are the interest rates for plaintiff lawsuit financing?

At Baker Street Funding, we strive to provide our clients with the best rates and fees available. Attorney funding has an interest rate of 2% per month simple. Our contracts are transparent and priced on a case-by-case basis.

If you are requesting funding for a client, the interest rate generally will be around 2.95% to %3.00 a month (simple interest). Attorney referrals get the lowest rates available. 

If someone quotes you a lower rate than 2.95% monthly, that usually means that it will be a compounding rate for your client, and it will cost them more money over the course of one year than the initial 2.95% – 3.00% non-compounding that we offer attorneys for plaintiff funding. 

We provide reduced rates for clients that are referred to us by their attorney or medical provider.

I do not wish my client to get funding.  

If you do not wish for your client to get funding, we kindly ask that you notify us of that before we conduct our due diligence on the claim. We value your time and opinion and invite you to learn about our firm and how we can provide intelligent financial solutions to attorneys and their clients.

What are the chances my client will be approved for a legal funding advance?

Baker Street Funding’s initial review of your application is based on our initial phone call, where you will provide publicly available information about your client’s claim. If interest is expressed and depending on your client’s needs, we may require further documentation and a scheduled call with our underwriter. Based on that call/communication and documentation, our underwriter will make the ultimate funding decision. Most cases sent by attorneys get funded because attorneys usually send strong claims.

Can legal financing affect attorney-client confidentiality?

Our involvement as investors does not affect the attorney-client privilege. Multiple recent rulings in all court matters have upheld that conversations with third-party lawsuit funding companies are protected by common interest doctrine and thus deemed privileged and confidential. You can rest assured that you are in no way waiving any of your legal rights to confidentiality by seeking pre-settlement funding for your client.

Is plaintiff litigation funding legal?

Lawsuit funding or plaintiff litigation funding is legal and provided in almost every state in the country. While state requirements differ in every state, we maintain compliance with the regulations in every state we fund.

Are there any upfront fees?

No, there are no upfront fees for Baker Street Funding to review your case or at the time of funding. We are compensated only upon the successful settlement of your client’s claim. Since all funding provided is non-recourse, your client is under no obligation to repay the funds if the case does not reach a successful settlement and payment is due when funds arrive in escrow.

How can legal funding help my practice?

As with any business, running a law firm requires a steady flow of capital. Many attorneys struggle to maintain a successful legal practice simply because of fee delays. Those fees are the lifeblood of any thriving practice: without them, it becomes almost impossible to build cases, find new clients, or even meet basic expenses like payroll.

Different types of legal funding options are designed to fit the needs of everyone. Whether solo practitioners or a larger firm, it allows all types of contingency fee attorneys to build their caseload and litigate properly while waiting for more mature litigation to be paid out. 

Law firm financing can be a great asset to contingency fee-based attorneys. It helps them gain access to cash flow to help pay expenses smoothing out their income stream, which can otherwise be extremely difficult to manage. While each attorney and firm’s situation is different, we have created a bespoke solution for every different type of financing need. We can help you manage your portfolio of cases and provide capital based on that portfolio to help with payroll and marketing capital. We can also provide case-by-case specific financing to help cover discovery costs, expert witness costs, administrative costs, and maintain an office space without worrying about running out of capital.

Does the funding provider have autonomy over the litigation?

The funding provider does not have autonomy over the litigation. We generally remain passive in the disputes we have been investing in. As per the terms of the agreement with legal counsel, the claimant maintains full autonomy overall decision-making. We will not intervene in any way with the relationship between the claimant and its lawyer. In certain jurisdictions across the globe, Litigation Funding programs may enable funders to have a higher degree of participation in the dispute. However, we believe that our job should be to provide additional expertise and financing so that the plaintiff and the law firm can draw on if and when necessary, rather than having some other sort of influence over the proceedings.

What types of cases make good candidates for litigation financing?

Typically, litigation funding is an extremely selective industry. We look for claims that have a minimum damages value of $10 million or more. Any plaintiff looking to minimize their equity exposure on litigation that can be lengthy and unpredictable or is looking to hedge against a sub-optimal outcome would be a good candidate for litigation funding. The recovery on the claim should greatly exceed the cost to litigate as well as the amount of financing that the plaintiff is looking to secure. Most types of claims are eligible for financing at any procedural stage.

Litigation funding vs. traditional financing

Many law firms looking for lines of credit approach to their local or national financial institution. These banks may provide you with a business loan or a LOC (line of credit). The problem with these products is twofold. They do not take into account the intricacies of running a legal practice and, most times, do not provide enough capital as is needed. The other issue is that unless your firm has had a long-standing relationship with the bank, you will need to personally guarantee the financing. That means you are risking the money you’ve made to secure the funds you need to make in the future. With Baker Street Funding, those worries are taken care of. Our attorney funding process is based on your current and former case portfolio. We also take into account intangible things, such as your previously settled cases. Our funding agreements are non-recourse, and thus you never have to personally guarantee our contracts.

What is litigation finance for attorneys?

Litigation finance for law firms is a type of legal funding service that is created specifically for contingency fee-based attorneys, representing personal injury plaintiffs and large commercial litigation lawsuits. There are multiple different subsets of funding for lawyers, including case cost financing, voucher funding, attorney lines of credit, and post-settlement fee advances.

What are the benefits of litigation finance?

There are many benefits to financing a claim. For small and mid-size companies, the cost of litigation can be daunting and have an adverse impact on their ability to do business on a day-to-day basis. Litigation financing helps minimize the financial impact as well as hedges against the risk of an adverse outcome. For attorneys, a typical case in the litigation process does not go to trial and it takes an average of 20 months to settle. When litigating a case, that timeline extends and there is uncertainty surrounding whether you will successfully win a judgment. This process makes running a successful practice difficult and attorneys need some sort of financial backstop to help cover costs until their next case settles. Contingency fee attorneys are not guaranteed any economic benefit unless they win their case. If an attorney invests years of time, effort, and capital into a case that settles in favor of the defendant, he or she walks away with nothing. Litigation financing can offer a multitude of options for law firms and can help increase the firm’s capacity for new claims through risk-sharing agreements.

What are the downsides of litigation financing? 

As with any financial product, litigation finance does have a downside. The first and most talked about downside would be cost. Non-recourse financing, by nature, is an expensive option. Because of the large amount of risk assumed by the funding company, the required rate of return must be commensurate to that risk. Another downside to litigation funding is the process itself. Analyzing a claim is a laborious and time-consuming process that has no guaranteed successful outcome. There is always the chance that a litigation finance company goes through the long process of due diligence and ultimately decides not to invest into a claim. 

What information does a litigation finance company need from me? 

Most of the information provided to a litigation finance company will be provided through the plaintiff’s counsel. Litigation funders will do a deep dive into your case so that they understand the risks and potential outcomes of the litigation. They will do a thorough review of all documentation that has or will be produced in discovery in addition to one or multiple conference calls with both client and counsel. Reputable litigation funding companies will never ask for information or documentation beyond to scope of your attorney’s work product so that all information is protected through attorney-client privilege. You should also be aware that documentation and information related to the case that is shared with a litigation funder is protected whether or not the company invests in the claim.

How long does a litigation finance contract typically take to generate?

The litigation finance process is different from lawsuit financing and a lot more complex. This includes an in-depth analysis of a case or portfolio of cases (for attorneys). Normally the due diligence period is 60-90 days. The speed of this process is normally dictated by how complex a case is. Once an initial review is complete, we will normally offer a term sheet to the client. If the term sheet is agreed to by both parties, we will then complete a final due diligence check. This can take anywhere from a week to two months. Once that process is complete and a contract is dually executed, funds will be distributed to the client.

At what stages of litigation is legal funding available?

Funders will normally fund a claim in any stage of litigation from pre-litigation to post-settlement.

What happens if the case is lost?

Since litigation funding is a non-recourse investment, if there is no recovery or if the case is lost, you are under no obligation to repay the funds.

What type of companies can apply for litigation financing?

Any company regardless of size or status is eligible for litigation funding. Any company looking to limit equity and risk exposure generated through litigation is a good candidate for funding. Most companies, regardless of size, only have a limited amount of resources that they can dedicate to legal matters. If a company is using all of those resources or has used all of those resources, then litigation funding may be a good solution for them.

How can litigation funding help my practice?

Litigation funding can become a great asset to your practice by helping you gain access to case flow to help pay expenses while waiting for a case to settle or go to litigation. While each attorney and firm’s situation is different, we have created a bespoke solution for every different type of attorney financing need. We can help you manage your portfolio of cases and provide capital based on that portfolio to help with payroll, office space, and marketing capital, or we can provide case by case specific financing to help cover discovery costs, expert witness costs, administrative expenses, and litigation expenses.

What is legal finance?

Legal finance (or legal funding) is when a financing company provides an attorney or a plaintiff with a portion of their settlement or fees in advance of the case settling or after it settles, where the borrowed amount doesn’t have to be paid until the case is successfully resolved and the legal proceeds are collected.

What type of funding products do you offer?

Baker Street Funding provides the following non-recourse funding products: lawsuit loans, post-settlement funding, attorney funding, surgery funding, and corporate litigation funding.

What states do you serve?

• Attorney funding is provided throughout all states of North America.

What type of cases do you fund?