What is settlement funding?
You’ve probably heard the term settlement funding tossed around, especially if you’re a plaintiff in a lawsuit. But what does it really mean for you? Settlement funding is not just a buzzword; it is a specialized financial arrangement that provides you with immediate cash to cover your expenses while your legal case is pending.
In technical terms, settlement funding is a non-recourse loan from the future proceeds of your case, which means it’s risk-free. You’re not selling away your case; you’re simply borrowing against it. The repayment comes directly from your settlement check, so there’s no out-of-pocket cost for you. But beyond the jargon, it’s a financial cushion that helps you fight your litigation without worrying about money.
Now, you might be wondering, "What's in it for me?"
Types of lawsuit settlement funding options.
Let’s dissect these options to find the one that’s right for you.
Non-Recourse Consumer Loans: The Cornerstone of Pre-Settlement Funding
Non-recourse loans are often the cornerstone of pre-settlement funding, and for good reason. They are also known as pre-settlement lawsuit funding, pre-settlement loan, pre-settlement advance, pre-funding settlement, and pre-settlement legal funding. This loan offers you money upfront against the 'future' settlement of your civil case with a no-win, no-pay structure. Pre-settlement funding is tied directly to your case's outcome.
The Fine Print: To qualify, you must have an active lawsuit and be represented by an attorney. Rates for this funding option start at 2.95% simple per month and cap in 3 years. Funding amounts go up to 10% of your settlement value.
Post-Settlement Funding: The Bridge to Your Settlement
You've won your case, congratulations! But wait, the settlement funds can sometimes take months to arrive. Post-settlement funding is a financial option that lets you access a portion of your settled legal claim before you actually receive the payment from the responsible party or insurance company. It's like getting a cash advance on your pending lawsuit settlement money until it pays out.
The Fine Print: While this funding solution offers immediate relief, don't forget that this option is a short-term solution. Make sure to ask your attorney about the expected timeline for receiving your actual settlement to plan your finances accordingly. Rates are similar to pre-settlement lawsuit funding, starting at 2.95% simple per month. Eligibility is based on the payout amount and no pending appeals. You can get up to 30% of your settled case.
Structured Settlement Funding: A Different Approach
Structured settlement funding can be a great way to get a large amount of money immediately, which can be helpful in situations where you face an unexpected financial emergency or a significant investment opportunity. Primarily, this funding alternative comes into play after a case has been settled and structured settlement payments start coming in.
Instead of receiving a cash advance before a settlement, as you would with pre and post-settlement funding, structured settlement funding offers a different kind of financing. It lets you borrow against or sell part or all of your future periodic payments in exchange for a lump sum of money upfront.
The Fine Print: While a structured settlement loan is not an option we provide at Baker Street Funding, rates in the industry can vary widely. Eligibility often depends on the terms of the structured settlement agreement.
Litigation Funding For Lawyers and Corporate Claimants
Litigation funding is a specialized form of lawsuit financing aimed at attorneys and corporate entities engaged in legal disputes. Unlike consumer-focused legal funding, litigation funding is designed to cover the extensive costs that come with corporate lawsuits, such as expert witness fees, discovery costs, and other legal expenses. One great advantage of this option is that it allows attorneys to pursue cases without draining their resources, thereby leveling the playing field against well-funded defendants.
The Fine Print: Rates are dependent on the complexity of the case and are usually much higher than the funding options mentioned above. Eligibility criteria include the law firm's or corporation's financial standing and case merits. Loan amount can go up to 50% of the expected fees or legal proceeds.
Line of Credit for Law Firms: Your Financial Backbone
In the dynamic field of law, expertise is just the tip of the iceberg. What really propels a law firm forward is its financial agility. Tailored exclusively for law firms, this legal financing tool serves as your financial backbone, giving you the freedom to cover an array of expenses—from case-related costs like expert witness fees to operational expenditures like payroll and office rent. This means you can focus on your core competency—winning cases—without the constant worry of financial constraints.
The Fine Print: A line of credit for law firms is not a one-size-fits-all solution but a customized financial solution. It comes with a flat monthly interest rate of 2% and is designed to cover both case-specific and operational expenses. Eligibility criteria may include the law firm's financial history and case portfolio.
How to get your funding in a flash.
Hit That Apply ButtonFirst things first, go ahead and apply online or give us a call. It's a breeze, and you'll hear back from us about your eligibility in no time—often within just a few hours.
Let's Talk About Your CaseOnce you're in the loop, our underwriters will team up with your attorney to assess the current value of your case. This is the moment where we figure out how much cash we can advance you.
Seal the DealAfter we give your application the green light, you'll get a non-recourse financing agreement. Make sure both you and your attorney put your John Hancock on it. This is your ticket to financial relief.
Cash in Hand, and Fast!As soon as we get that signed contract back, we'll shoot the funds your way. Whether you prefer a wire transfer or a good old-fashioned check, we've got you covered. Best part? You could be counting your cash the very same day.
Choosing the right settlement funding company.
Some people think that all legal funding providers are the same, but that’s far from the truth. Each lender has its own set of terms, rates, and specialties. Here’s how to guarantee you’re making the most informed decision on the option you pick.
You lender should be more than just a funding company.
Researching your lender pays off in the long run. Look for reviews and testimonials to gauge their credibility. For instance, Baker Street Funding consistently receives high marks for customer service, making it a trusted choice for many.
Your case matters, so do you.
You’re facing a significant time that could change your life, and you deserve a lender who not only offers competitive rates but also understands the ins and outs of legal funding. Choose a funding company that recognizes this. With Baker Street Funding, you get a team that treats your case with the care and attention it deserves.
Choose clarity, avoid pitfalls.
Understanding 'non-recourse' is your safeguard.
Make sure your lender, like Baker Street Funding, offers non-recourse loans, meaning you’re not on the hook for repayment unless you win your case.
Finalize your choice wisely.
Compare us with other lenders.
|Baker Street Funding||Other Lenders|
|Funding Amounts||$1,500 - $2MM||Up to $250,000|
|Cap||3-year cap||No cap|
|Monthly Rate||2.95% - 3.4% (simple)||2.95% - 5% (compounding)|
|Underwriting Time||24-48 hours||5 - 7 days|
|Contracts||Costs as advertised||Show another number on contract|
Need quick funds? Explore fast-track funding.
Your morning coffee tastes better when you’re flipping through the headlines without the weight of financial stress during litigation. That’s the peace of mind Baker Street Funding offers. We understand the unique financial difficulties you face while waiting for a settlement. With capped rates and transparent terms, we provide you with the funding you need to make it through your case confidently, free from hidden fees or unpleasant surprises. Take that first step toward financial stability by applying for funding today. With Baker Street Funding, you’re not just another client; you’re part of a community that cares.
Frequently asked questions about settlement funding.
A settlement loan is a specific type of financing where you receive an advance against your anticipated legal settlement. However, this is not a payday loan, traditional bank, or personal loan. Unlike traditional financing, this is often a non-recourse loan, meaning you’re only obligated to repay if you win your case.
To secure a loan against your settlement, you can apply through a legal funding company. Here’s what you need to qualify:
- A pending or settled lawsuit
- Legal representation
- No previous funding in the same case.
Attorneys play the most important role in the settlement funding process. They provide the necessary documentation and case details that help in the approval of your funding when you win your case.
While settlement funding offers numerous advantages, it should not come at the cost of financial prudence. The exorbitant interest rates from predatory lenders and the possibility of receiving less from your settlement due to a much higher repayment is a risk you should not be willing to take.
Settlement funding can be used for various needs:
- Medical bills
- Living expenses
- Rent or mortgage
- Car payments
- Utility bills.
If your case qualifies for funding and you’ve chosen a reputable legal funding company, you can receive funds within 24 to 48 hours. However, this is contingent on the prompt cooperation of your attorney in providing the necessary case details.
You may come across companies that claim to “guarantee” settlement funding, but here’s the thing—it’s good to know that no legal funding company can actually promise you an advance. Why? Because each case is unique and must go through a thorough evaluation process. Here’s what you need to know:
- Due Diligence: Reputable legal funding companies like Baker Street Funding conduct a comprehensive review of your case in collaboration with your attorney. This ensures that the funding provided aligns with the actual worth of your case.
- Non-Recourse Nature: Settlement funding is often non-recourse, meaning you only repay if your case is successful. This inherently involves a huge level of risk for the lender, making it impossible to guarantee funding for every applicant.
- Legal & Ethical Standards: Companies that claim guaranteed approval may not be following industry best practices or ethical standards.
|Interest||Non-compounding starting at 2.95% p/month|
|Loan protection||2-3 year cap|
|Funding time||24 hours|
|Average loan amounts||$10,800|
|Funding amounts||$1,500 up to $10mm|
|Type of loan||Non-recourse|
|Workers’ comp eligibility||Depends on the state|
|Personal injury claim eligibility||Yes|
|Civil rights case eligibility||Yes|
Legal funding caters to a wide array of civil cases.
Settlement funding is versatile, which makes it suitable for a wide range of legal claims. Let’s break it down.
Personal Injury Lawsuit: The Classic Case
When you think of settlement funding, personal injury cases often come to mind. Whether it’s a slip-and-fall, wrongful death, nursing home negligence, or medical malpractice, these loans provide immediate cash, enabling you to cover medical bills and daily expenses. The no-win, no-pay nature is particularly beneficial here, as personal injury cases can be lengthy and unpredictable.
Civil Rights Claims: The Fight for Justice
Civil rights claims are another area where settlement funding shines. These cases often involve fighting against large entities or governmental bodies, making them both time-consuming and expensive. A non-recourse loan can be a life changer in these cases, as you can sustain the fight without draining your resources.
Auto Accidents: Immediate Relief When Injury Strikes
Auto accidents can result in not just physical trauma but financial troubles as well. Non-settlement funding steps in to fill the gap, allowing you to focus on recovery while your accident case is pending.
Employment and Labor: Leveling the Playing Field
Employment and labor disputes, such as wrongful termination or discrimination, can indeed make you feel frustrated and indignant. Non-recourse funding can level the playing field when facing the company’s insurance, providing you with funds to take on even large corporations.
Workers’ Compensation Loans for Injured Employees
Workers’ compensation cases are an essential aspect of the legal system, particularly for those who have sustained workplace injuries. These cases are complicated as they often require extensive medical records and expert testimony. Non-recourse funding offers financial assistance, but it is currently limited to specific states.
Commercial Litigation: Navigating Complex Waters
Commercial litigation cases can be intricate and drawn out. Here, non-recourse litigation loans act as a financial buffer, allowing you to pursue your multi-million dollar claim without depleting your business funds
Check out our resources and tips.
Legal jargon simplified: your mini-glossary on settlement funding.
Here’s a quick rundown of some key terms that will help you become fluent in “settlement funding speak.”
A non-recourse loan is a type of loan where you’re not personally liable to repay the borrowed amount if you lose your case. In other words, if things don’t go your way in court, you owe nothing back.
This is an advance on your potential settlement amount that you can receive before your case is resolved. It’s designed to help you cover immediate expenses like medical bills and living costs.
Once you’ve won your case, post-settlement funding provides you with part of your settlement before the official payout. This can be a lifesaver when you need money now.
This is a broader term that encompasses various types of financing provided to claimants or law firms engaged in litigation. Unlike consumer-focused legal funding, litigation financing can cover extensive costs like attorney fees, expert witness fees, and discovery costs.
Underwriters are professionals who assess the risk and how valuable your case is to determine the amount of funding you could receive. They work closely with your attorney to review all the case details before approving a settlement funding amount.
This is the thorough investigation that a legal funding company, like Baker Street Funding, conducts to assess the strength of your case.
A structured settlement is when you agree to accept your legal settlement in periodic payments rather than a lump sum. It’s often used in personal injury cases to avoid spending the full amount too quickly.
Settlement money is the financial award you receive after successfully concluding a lawsuit. This compensation is intended to cover various costs, such as medical bills, lost wages, and emotional distress.
Ready to get started?
When you’re caught in the middle of a long and complicated lawsuit, every decision feels urgent, especially when it comes to your finances. We get it; the clock is ticking, and you need money now. However, making an informed choice about the lender you choose can be both urgent and wise. That’s why Baker Street Funding promises to provide you with a quick and transparent service, and we are proud to have helped countless clients explore their options and secure the funding they need from their settlement. Start your application today or contact us for more information.