Pre‑settlement legal funding is a non‑recourse cash advance given to a plaintiff while their lawsuit is still pending.

“Non‑recourse” means repayment is tied to the case outcome. If your case results in a settlement or award, repayment comes from those proceeds. If there is no recovery, you typically do not repay out of pocket.

If you’re waiting on a case, you already know the hard part isn’t just the legal fight. It’s the time. And time gets expensive. Pre-settlement legal funding is one option injured plaintiffs use to cover bills while their attorney works toward resolution.

Key Takeaways

Pre‑settlement funding is not a traditional loan. It’s a non‑recourse advance based on your future settlement.
Approval is based on case strength, not employment, credit score, or income.
The biggest “cost driver” is usually time. The longer a case takes, the more the payoff can grow.
The safest way to use it is to take only what you need, and understand the payoff before signing.

Pre‑Settlement Legal Funding, Lawsuit Funding, and “Lawsuit Loans”

You’ll hear a few different terms used for the same general idea:

pre‑settlement funding
lawsuit funding
lawsuit cash advance
“lawsuit loan” (common term, but not technically accurate)

Whatever name you use, the basic idea is the same. You’re accessing money now based on a portion of what your case may recover later. It’s designed for plaintiffs who have real expenses and can’t wait months (or years) for the case to resolve.

How Pre‑Settlement Legal Funding Works

Most funding follows a simple flow:

You apply with basic details about your case.
The funding company contacts your attorney to confirm representation and request case information.
The company reviews the case to evaluate risk and potential recovery.
If approved, you receive funds.
If the case resolves successfully, repayment happens from the settlement distribution.

The connection here is important: funding is built around the case itself, so your attorney’s involvement is part of how the process works.

What “Non‑Recourse” Really Means

Non‑recourse is the feature that makes lawsuit funding different from normal debt.

With traditional debt, repayment is your responsibility no matter what happens. With non‑recourse funding, repayment is contingent on recovering money from your lawsuit.

A simple way to think about it:

Win/settle → repayment comes from the proceeds
No financial compensation → no repayment obligation

That’s why funding companies strictly focus on case strength. They’re taking on risk that traditional lenders don’t.

Is Pre‑Settlement Funding a Traditional Loan?

Not in the way most people think of a loan.

Traditional loans usually involve:

credit checks
income verification
monthly payments
personal liability if you can’t repay

Pre‑settlement legal funding is different because:

there are no monthly payments while the case is pending
approval is based on case merits, not your credit score
repayment is connected to a successful recovery, not your paycheck

This is also why the cost structure works differently than bank lending.

Who Typically Qualifies?

Funding is limited to plaintiffs who are represented by an attorney. That’s because repayment (if any) is handled through the settlement distribution process.

Approval commonly depends on:

Liability: is fault reasonably clear?
Insurance coverage: is there coverage to pay a settlement?
Injuries and treatment: do medical records support the injury claim?
Case posture: is the case moving, or stalled?
Existing liens/prior funding: what else will be paid out of proceeds?

Even strong cases can get denied if the economics don’t work. For example, if policy limits are low and liens are high, there may not be enough net recovery to support an advance.

What Types of Cases Can Be Funded?

Pre‑settlement funding is most common in personal injury cases where a settlement (or jury verdict) is realistic.

Examples often include:

car and truck accidents
slip and fall and premises liability
medical malpractice
wrongful death
civil rights and wrongful imprisonment (case‑dependent)

Every case is different, and not every claim qualifies. **Availability can vary by state.

How Much Money Can You Get?

Most funding companies limit advances to a portion of the expected monetary recovery.

That’s not just a “company rule.” It’s also consumer protection. Over‑funding can eat into your net settlement.

Net recovery = what’s left after attorney fees, case costs, medical liens, and other obligations are paid.

A responsible advance is usually sized to up to 10% of the potential proceeds, so you’re not cornered later.

On Baker Street’s plaintiff side, for instance, you’ll often see funding described as up to about 10% of the estimated settlement value, depending on the case. That “depending” part is important because liens, prior advances, insurance limits, and case risk change the math.

Tip: Avoid taking more than you truly need. The more you take, the more you reduce your net proceeds if the case resolves successfully.

What Can Pre‑Settlement Funds Be Used For?

Most plaintiffs use funding for normal life expenses, like:

rent or mortgage
utilities
car payments
groceries
medical bills not covered by liens or insurance
keeping up during time off work

The real benefit is the breathing room it provides. When you’re under financial stress, it’s easy to feel pressured into accepting a quick settlement that might be less than you deserve. Funding can reduce that pressure.

How Much Does Pre‑Settlement Legal Funding Cost?

Costs vary by company, your state, and specifics of your case. Since legal funding is non‑recourse, the total amount you repay is determined by:

The amount advanced and the terms in the funding agreement.
How long the case remains open.
The risk that the case may not recover.

Common pricing models you’ll see

Simple fee / simple rate: grows in a straight line over time.
Compounding: grows faster over time because fees stack on fees.
Caps: limits on how high repayment can go after a set period.

If you’re comparing offers, don’t concentrate only on the “rate.” In your contract, make sure you look for the payoff amount.

You can always ask your funder:

“What do I owe at 6 months? 12 months? 18 months?”
“Is it simple or compounding?”
“Is there a cap? When does it apply?”
“Are there any fees besides the funding cost?”

Bottom line: cost isn’t only “high or low.” It’s time + structure.

Will Legal Funding Affect My Settlement Amount?

Funding doesn’t change the legal value of your claim. Insurance companies don’t suddenly pay more because you got an advance.

What it can change is your ability to wait. If you’re not desperate for quick money, you’re less likely to accept a low offer because you need to stop the bleeding.

At the same time, funding reduces net proceeds because repayment (if any) comes from your final lawsuit payment. Before you move forward, make sure you’re comfortable with this trade-off.

Does a Funding Company Control My Case?

A reputable company doesn’t control your case strategy, your attorney, or your settlement decisions.

Your attorney remains in charge of the case. The funding company’s role is financial, and the agreement should reflect that separation.

If any company pressures you on legal decisions, that’s a red flag.

Pros and Cons of Pre‑Settlement Legal Funding

Potential benefits

helps cover essentials during a long case
reduces pressure to accept an early lowball offer from the insurance
no upfront fees, and no monthly payments
approval based on case strength

Potential downsides

the payoff can grow over time
it reduces your net settlement proceeds
stacking multiple advances can get expensive
not every case qualifies

Most people do best when they use funding as a tool, not a lifestyle bridge.

How to Choose a Pre‑Settlement Funding Company

Before you sign anything, look for:

clear, written disclosures
a payoff amount you can understand in your contract
attorney involvement and acknowledgment
no surprise add‑on fees
a contract that states the non‑recourse nature clearly
responsive support that answers questions right away

If the agreement feels confusing, slow down. A good funder would rather explain it than rush you.

How Baker Street Funding Works With Plaintiffs and Attorneys

Baker Street Funding provides non‑recourse pre‑settlement legal funding for plaintiffs with active claims.

Here’s what that means:

Baker Street evaluates your case value and strength, not your financial history.
Our review process runs through your attorney, since the case file and status are key for funding decisions.
If approved, we provide a funding agreement that lays out the terms.
Our funding is sized to avoid overfunding (10% guideline for active claims).
In most cases, our funding carries a non‑compounding model (case‑dependent).
Repayment only comes from your settlement or court-ordered compensation.

Frequently Asked Questions

What is pre‑settlement legal funding?

It’s money you can access while your lawsuit is pending, based on the settlement of what your case may recover later.

Do I have to repay if I lose my case?

Pre‑settlement funding is non‑recourse, meaning repayment is required only if there is a successful recovery. Always confirm the definition of “recovery” in your contract.

Can I get pre‑settlement funding without an attorney?

No. Attorney involvement is strictly required because the funder needs case documentation and repayment (if any) is handled through settlement distribution.