When you’re dealing with a workplace injury, it can be a challenging time, both physically and financially. In 2021, the Bureau of Labor Statistics reported over 2.6 million injuries in the private industry in the US, with a concerning 5,190 being fatal.
The cost of being out of work due to a job-related injury can add up quickly, leaving you in need of some extra cash to cover your most basic expenses. This is where a workers comp cash advance comes in as a potential solution.
Can I Get an Advance on my Workers Comp?
Yes, upon qualification, you can get an advance from the potential proceeds of your workers compensation settlement claim. This option is known as a cash advance or pre-settlement funding, and it is available to injured employees who are waiting for their workers’ compensation claim to be resolved.
It is important to understand that taking a cash advance from your workers compensation settlement is not the same as receiving a traditional loan. Lawsuit cash advances are considered non-recourse loans, which means that you are only responsible for repaying the loan if you win your workers compensation case.
Furthermore, there are no payment obligations except for the advanced amount after you receive your compensation. If the case doesn’t go in your favor and you don’t get compensated, the lender will cover the loss.
How Do Cash Advances for Workers Comp Claims Work?
A workers compensation advance uses your potential workers comp settlement as security and allows you to receive a portion of your compensation upfront. This can be helpful if you need financial assistance while you wait for the final settlement of your claim.
Cash advances for workers comp claims are also quick and easy to obtain, as lenders consider the value and strength of your claim rather than credit scores, income, or physical collateral.
How to Get a Workers Compensation Cash Advance.
To get a workers comp cash advance, you’ll need to meet certain criteria, including having an attorney, having a valid workers comp claim that has been accepted by the insurance, and living in a state that allows settlement funding for workers comp (Alaska, Florida, Iowa, Louisiana, Montana, Rhode Island, Washington, and Wyoming).
The process starts by applying with a lender of your choice, providing basic information about your case, and your workers comp attorney contact. Moreover, in order to process your application, your lawyer must release information about your accident, medical treatment, insurance, the benefits being claimed, and the estimated settlement value.
If you qualify, the funding company will work with your attorney to gather all required information, and then make a funding decision. If approved, you and your lawyer will receive a contract to sign, and once executed, you’ll either receive your settlement loan the same day or the next business day.
What are the Costs of a Workers Comp Advance?
While a workers comp advance loan can provide the cash you need, it’s also an expensive option. In addition to repaying the advance once your compensation is paid, these advances also come with fees which can range from 10%-40% of each advance taken.
Additionally, workers compensation loan advances charge interest rates ranging from 30% to 80% a year, depending on the lender.
Remember, before you sign a funding agreement, the interest rate will begin accumulating until you receive your expected settlement. That’s why its crucial to consider all costs associated with the advance carefully with your attorney in order to make the best decision for your specific needs.
The Takeaway.
Workplace injuries can happen to anyone, including construction workers, industrial employees, factory workers, hospital staff, bus drivers, transit workers, retail employees, security guards, and more. At Baker Street Funding, we provide financial assistance for various types of occupational injuries, including physical trauma and disabilities from work accidents and occupational diseases.
With few hoops to jump through, a workers comp cash advance could give you access to up to 10% of your anticipated settlement while you wait for your claim to resolve—all within 24 hours. Unlike traditional loans with restrictive terms and criteria, we have no collateral requirements, income verification, or credit checks.
Consider applying with Baker Street Funding to meet your day-to-day needs—all in one business day. Baker Street Funding offers you quick processing times, low rates, and minimal fuss. You’ll also get a capped rate—that means we suspend all interest rates in the third year of your advance to help you save money once you get your workers compensation settlement check.
