Not all forms of lawsuit loans are created equal. There are various types of loans that plaintiffs and attorneys can obtain to meet unique financial needs created by a personal injury lawsuit. Two of those types of loans include pre-settlement funding and post-settlement funding. At Capital Financing, we specialize in both types. This post details the major differences between the two types of financing and how each can be used for the differing parties.

Pre-Settlement Funding

Pre-settlement funding is funding used to help parties cover the costs of living and legal fees before a case settles. A personal injury case can take anywhere from months to years to settle, during which time the plaintiff may accrue credit card debt, overdue fees for various bills, and other expenses. An attorney may rack up charges associated with paying expert witnesses and employing other resources to strengthen a client’s case.

  • Lawsuit Funding for Attorneys: This type of funding is helpful to attorneys who are short on capital and/or who are trying to grow their firm. By utilizing pre-settlement funding, attorneys can devote adequate resources to each case, which means better outcomes and more client trust.
  • Lawsuit Funding for Plaintiffs: Legal funding for plaintiffs is handy in that it provides the immediate cash they need to cover the cost of living, medical expenses, and other costs that arise. The fee structure on these types of loans is reasonable, and repayment is only required if the client obtains an award. Most pre-settlement loans are approved within 48 hours.

Post-Settlement Funding

It is not uncommon for settlement awards to be delayed by months or even years after the case has been settled. Post-settlement funding offers capital to individuals who do not want to take the risk of pre-settlement funding but who need advanced access to their award to cover certain expenses.

  • Legal Funding for Attorneys: Post-settlement funding is ideal for attorneys who contributed a significant amount of their own money to a client’s case and who need access to capital to take on more cases. For smaller firms, the delay in settlement awards can be crippling. Post-settlement funding, however, allows small firms to pursue new cases, secure new clients, and expand their practices while awaiting payment. Because legal funding is non-recourse, attorneys do not have to pay back their portion of the loan if, for whatever reason, the client cannot meet his or her obligation.
  • Legal Funding for Plaintiffs: A plaintiff’s dire financial situation does not change simply because he or she was awarded a settlement. Until the money hits his or her bank account, the client will continue to need assistance covering living expenses and other costs. Post-settlement funding provides that financing in a timely and cost effective manner.

Whether you are an attorney or a personal injury accident victim, you can benefit from either pre- or post-settlement funding in several ways. Contact Capital Financing today to discuss your loan options and what you need to do to get approved within 24 to 48 hours.