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What is definition of Pre-settlement funding?

Annie Barnes

in Student Loans

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Jessie Thompson on April 5, 2019

Pre Settlement funding is a cash advance on a non-recourse basis against a lawsuit. A lawsuit is going to be a case of personal injury or a business dispute ie. commercial litigatestion. The money is lent to you and if you lose your case, you owe nothing. If you win, you are going to pay back the loan with interest. In summary, it is a cash advance before a settlement. Added: Pre settlement funding is non-recourse cash advance against a pending lawsuit. Pre settlement funding is typically provided without any recourse on the part of a private investor or hedge funds. Pre settlement funding is typically used as a way of waiting for a demand for a larger settlement. When this financial tool was introduced for the first time the rates were very high due to the lack of competition. In the last ten years more companies and funds that have entered the space, making the most competitive rates. Most lenders will tell their clients that pre settlement funding should only be used as a last resort.


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