What Pre-Settlement Cash Advance Is and Is not

Facing financial pressures while waiting for a personal injury lawsuit to resolve is a common challenge. Many find themselves searching for solutions to bridge the financial gap until a settlement is reached. Pre-settlement cash advance will help you pay your bills until you win a personal injury lawsuit or agree to a favorable settlement with the insurance company.

There’s a considerable amount of misinformation and confusion out there about pre-settlement funding. Being able to discern what pre-settlement funding is, and is not, can help you get a better understand how it can help you.

It is Not: A Loan

Pre-settlement funding is mislabeled by some as a loan. This is one source of confusion. It is important to understand that there is a big difference between a pre-settlement advance and a loan. Pre-settlement funding is NOT a loan.

The difference is that you are expected to pay back a loan under any circumstance – even if you don’t win your case. The company that gives you a loan expects repayment and potentially with heavy interest. However, when it comes to pre-settlement funding, you will only pay if you win making this very different from a loan.

It is Not: A Structured Settlement

Pre-settlement funding is not the same thing as a structured settlement. You receive a structured settlement after you win your case or settle. Instead of taking all of the money from the case at once, you have it distributed to you in smaller amounts over the course of a set amount of time, such as 10 years. For example, you might be awarded $1,000,000 in a case.

With a structured settlement, you receive $100,000 every year for 10 years. Whether you decide to take a structured settlement or lump sum after your case depends on a number of factors, but doesn’t have much to do with pre-settlement funding.

It is Not: A Replacement for Your Settlement

If you apply for and receive pre-settlement funding, it’s important to understand that the advance won’t replace your actual settlement if you win. For one thing, you typically only receive between 10 and 15 percent of your expected settlement amount in the form of funding.

Receiving a portion of your anticipated settlement up front, rather than the entire thing, means that you’re not likely to spend it all before you get your day in court.

What IS Pre-Settlement Funding?

So, if pre-settlement funding isn’t a loan, a structured settlement or a substitute for an actual settlement, what is it? The funding is a non-recourse cash advance that is designed to help you pay medical bills or make ends meet while you and your attorney go after the highest possible sum in a case.

With pre-settlement funding, you won’t feel pressure to take a low ball offer or settle for less than your case is worth, as you have the cash on hand to cover your day to day needs. You are only responsible for repaying the funding if you win and you don’t have to pay any fees out of pocket or up front.

If you are waiting for your case to go to court and need help making ends meet, pre-settlement funding is the answer. At Gain, our goal is to help plaintiffs get a fair settlement in court by providing funding. To learn more about the process and what you can expect, contact us today.


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