How do lawsuit loans work

Learn how lawsuit funding works.

Whether you need to pay an electricity bill quickly, or you want to pay off your rent, there are times when we all need a little financial boost. That’s where a lawsuit loan comes in. A lawsuit loan is risk-free and can be the smart choice in some situations. Here’s what you need to know.

How It Works 1

Personal injury lawsuits can be expensive, stressful, and time-consuming. Whether you fell outside your local store, were involved in an auto accident, or were a victim of medical malpractice, your life can be permanently altered, leaving you unable to pay for bills or living expenses.  You may find yourself looking to explore the option of getting money for your case before your lawsuit settles. We have compiled some information below on what lawsuit loans are, how they work, and what to look for when considering a lawsuit advance.

What are lawsuit loans?

A lawsuit loan lets you borrow money from your pending settlement based on the value of your case. The lawsuit lender will often request to speak to your attorney and request important case documents, both of which may impact the loan amount. Lawsuit loans are not traditional loans. They are non-recourse cash advances, which means, if approved, you’ll generally be asked to repay the loan only if your case settles successfully, and if your case does not settle for any reason, you are not obligated to pay back the funds. While this sounds like a great idea, there are some things to look out to make sure you receive a fair offer.

The most common case types of funding companies look for are listed below:

  • Personal Injury
  • Auto Accident
  • Slip and Fall
  • Wrongful Death
  • Medical Malpractice

How do lawsuit loans work?

Lawsuit loans are relatively simple, and as mentioned above, pre-settlement funding (or lawsuit loans) are non-recourse cash advances based solely on the merits of your case. The way it works is a lawsuit funding company that will look at your case documentation and request to speak to your attorney to evaluate your case and figure out if you qualify for an advance. If approved, we will provide you and your attorney a contract to sign, stating the amount given, a specified rate of return along with payment instructions for when the case settles. The amount you receive is based on a number of factors, including how much you request, the risks of your case, and the estimated value of your settlement. Once the contract is dually signed, we will provide you with cash directly to your bank account or send you a Next-Day FedEx company check that can be cashed at any certified check-cashing place. Repayment is made by your attorney’s office when your settlement award arrives, and the balance of the settlement will then be distributed to you.

How are lawsuit loans helpful?

Personal injury lawsuits and civil rights claims can leave plaintiffs unable to pay bills and provide for your family. While there is no restriction on what you use the money from a settlement loan, lawsuit loans help plaintiffs cover everyday and emergency expenses while waiting for their case to resolve.

pre-settlement funding how it works

What happens if I lose my case?

While this varies by agreement, most settlement loans are non-recourse. This means that if your case does not settle or you lose, you are under no obligation to pay back the funds. If your settlement turns out to be less than what you owe, the originator will almost certainly claim the balance of the settlement as repayment.



only pay

if you win your case.

Lawsuit funding pro’s and cons.


There are many benefits of settlement loans, a few of which are listed below:

  • They provide quick access to cash to cover everyday living expenses while you await your settlement award to be finalized.
  • You do not need good credit or job history to obtain one since they are based solely on your case’s merits.
  • You can get the funds in as little as 24 hours.
  • You do not have to accept a low-ball settlement offer because you don’t have funds to pay for daily living expenses.


While, in theory, settlement loans sound like an amazing product, there are things to be aware of. Things to consider are listed below:

  • Most settlement advances come with high interest. Because of the risk of losing their investment, most funding companies charge high interest to make up for the risk of investing in your case.
  • Most lawsuits take a very long time to settle, and rates can pile up quickly over a year or two. You should make sure that you are aware of the interest rate being charged and how it compounds. Some companies offer caps, which maximize the amount you would repay regardless of how long the case takes to settle.

The bottom line.

When you are waiting for your lawsuit to settle and need cash now, a great option is a settlement loan. As long as you research and fully understand the cost, a lawsuit loan can empower you to not only try and settle your case for a higher amount but make it through your everyday life comfortably until your settlement award arrives. Just like any important financial transaction, it is imperative that you do your research, ask questions, and ultimately do what is best for you and your family.

When you need funding, Baker Street Funding is a better alternative.

Where available, you can get a non-recourse lawsuit loan from Baker Street Funding that doesn’t require collateral. You don’t even have to have good credit or be employed in order to apply, and if approved, you can get your cash in as little as one business day. We explain in what states our loan products are available and our interest rates and fees upfront so there are no surprises. 

Just fill out the Baker Street Funding application to get started today.

Ready to apply?

It’s easy and fast.

Baker Street Funding helps you Get Your Legal Funds Now.

Select a legal funding product to get started:




Litigation Funding

Post-Settlement Funding

Surgery Funding

Or just call us at 888.711.3599 to apply.

Baker Street Funding helps you Get Your Legal Funds Now.

Select a legal funding product to get started:









Surgery Funding


Or just call us at 888.711.3599 to apply.