Here’s Why Pre-Settlement Funding May be Right for You
If you’ve suffered an injury or some other debilitating situation and are waiting on a settlement to provide financial relief, you may consider getting a pre-settlement loan. This is a low-risk way to increase cash flow now, without compromising the integrity of your payout.
What is Pre-Settlement Funding?
Pre-settlement funding is a type of loan that a company provides you in exchange for a portion of the settlement proceeds you’re expected to receive in the future. Once your case is settled and the money is paid out, the lending institution receives the portion of the money that they originally provided.
The simplest way to think of pre-settlement funding is like a cash advance on your future settlement. The funding institution gives you some money today with the expectation that they’ll receive their money back (plus interest) once the case is settled.
To better understand how pre-settlement funding works, let’s look at a hypothetical example in which you’re hurt in a car accident. To be more specific, you were involved in a high-speed accident with an 18-wheeler on the interstate. The accident left you with a broken femur and serious concussion symptoms, which will prevent you from doing your warehouse job for at least five or six months. Unfortunately, this is your only source of income for your family of four and you have very little savings. Your only option is to rack up debt on your credit card…or is it?
With pre-settlement funding, you can get cash based on the expected payout of your future settlement. You work with a company that specializes in this type of loan and they evaluate your case. They determine that the trucking company’s insurance provider will almost certainly be held liable for the accident – likely to the tune of $700k - $900k. As a result, they’re willing to lend you up to $75k to help you stay on your feet and keep your household’s bills current during this time.
A year goes by and your lawyer is finally able to help you reach a settlement with the insurance company. The payout is $825k. When the settlement is distributed, your lawyers get their fees, the pre-settlement funding company gets their $75k (plus fees or interest), and then you’re left with everything else. Because the company is reimbursed directly through the settlement, you don’t have to worry about paying back your loan. Your attorney will take care of it for you by deducting it from your settlement check. This keeps things simple and means you’re only “out” the fees you owe on the funding. But considering that it kept your family afloat for 12 months, it’s a small price to pay.
4 Reasons to Choose Pre-Settlement Funding
Pre-settlement funding offers injury victims and/or plaintiffs a long list of benefits that simply wouldn’t be possible without this sort of agreement. Let’s take a closer look at several of them:
- Fast Cash in Your Bank Account - When you need money but you don’t have any savings or income, life can feel scary and overwhelming. With pre-settlement funding, you can typically have cash in your bank account within 24 hours or less (once your application is approved). This means you could apply for funding at 11 a.m. on a Monday and have funds in your bank account by Tuesday at 9 a.m.
- Cash for Rent/Mortgage - If you own a home, your bank or lender doesn’t care about the fact that you’ve been in a car accident (or whatever it is in your situation). The same goes for renters. Your landlord doesn’t see your problem as their problem. All they want is a rent check delivered on time each month. With pre-settlement funding, you can continue to pay your mortgage or rent and avoid the possibility of losing your home.
- Cash for Outstanding Bills - Bills don’t stop just because your income does. Pre-settlement funding allows you to continue paying your electric bill, water bill, credit card payments, student loans, etc. It also gives you immediate cash to pay for essentials like childcare, transportation, and basic medical care. It’s an absolute life-saver for your finances – meaning you never have to choose between paying basic bills and keeping food on the table.
- Non-Recourse Funding - Pre-settlement funding is what’s known as non-recourse debt. (And, truth be told, it’s not technically debt.) This means you aren’t actually liable for money you accept and are never required to pay it back. Instead, the company lending the money absorbs all of the risk and is 100 percent dependent on receiving their payment from the proceeds of your future settlement.
Let’s say, using the example above, that you received $75k in pre-settlement funding. Then something awful happens and no settlement is reached. The trucker’s lawyer’s found some flukey detail in the case and the whole settlement was called off.
If you had taken out a $75k loan with recourse, the lending institution would still expect you to pay it back. (And, if you didn’t, they could put a lien on your cars, house, and other assets.) But because this is non-recourse funding, you’re off the hook. You don’t owe a single penny.
Apply for Funding Today!
Have you been hurt or injured in an accident? Are you waiting for a settlement that keeps getting delayed and bogged down in legal paperwork? Do you find it difficult to make financial ends meet? You may be a good candidate for pre-settlement legal funding from Capital Now Funding. Here’s how it works:
- Step 1: You Apply
- Step 2: We Approve
- Step 3: You Receive Funds
The best part about working with Capital Now Funding is that there’s no risk and zero recurring interest. Yes, you read that right…zero recurring interest! Unlike other companies that often charge high interest rates on funding, we operate on a fixed fee basis. This means you always know exactly how much will come out of your future settlement – whether that takes two months or two years. And if you lose the case, the money is yours to keep and you owe us nothing.
Thousands of clients have trusted Capital Now Funding over the years. Apply now and we’ll let you know the next steps to take.