Your client’s case is strong, but their financial situation is not. It’s a common scenario that forces too many plaintiffs to settle for less than they deserve. A lawsuit advance can solve this problem, but it’s crucial to approach it with a clear strategy. As their attorney, you can help them make an informed decision by understanding the process from the inside out. This guide answers the most important question on your mind: what are the requirements for a lawsuit advance? We’ll cover everything from case eligibility and required documents to the red flags that signal a predatory deal.

Key Takeaways

• Focus on your case, not your credit score: A lawsuit advance is non-recourse funding, which means you only repay it if you win. Because it’s an investment in your case’s outcome, funders evaluate its strength (like clear liability and damages) instead of your personal finances.
• Prioritize simple interest to protect your settlement: The single most important detail in a funding agreement is the interest type. Compounding interest can grow exponentially and consume your final award, so always choose a funder that offers low, simple interest for a predictable and fair outcome.
• Choose a partner whose mission aligns with your goals: The funder’s business model reveals their priorities. A nonprofit funder is mission-driven to provide fair, ethical support, while for-profit companies are designed to maximize returns, often through high rates and aggressive terms.

What Is a Lawsuit Advance?

A lawsuit advance can feel like a complex financial tool, but the concept is straightforward. It’s a way for plaintiffs to access money now based on the potential future outcome of their case. Understanding how it works, how it differs from a traditional loan, and the common misconceptions surrounding it is the first step for any attorney considering this option for a client. It’s all about giving your client financial stability so you have the time you need to win the justice they deserve.

How a lawsuit advance works

A lawsuit advance, also known as pre-settlement funding, provides your client with a portion of their anticipated settlement before the case officially resolves. This isn’t a loan against their credit score or assets; it’s an advance based on the merits of their legal claim. For plaintiffs struggling with mounting medical bills, lost wages, and daily living expenses, this funding can be a critical lifeline. It allows them to stay afloat financially while you concentrate on litigating their case. This financial cushion removes the pressure for them to accept a quick, lowball offer from an insurance company, giving you the time needed to secure a fair outcome.

How is a lawsuit advance different from a loan?

The most significant distinction between a lawsuit advance and a traditional loan is that an advance is non-recourse. In simple terms, if you don’t win the case for your client, they owe the funder nothing. The repayment is entirely contingent on a successful settlement or verdict. Unlike a personal loan or a line of credit, your client’s personal assets are never at risk, and there are no monthly payments. The funding company assumes all the risk. This is why the industry considers it a purchase of an asset (a piece of the potential settlement) rather than a loan. This non-recourse structure is a key benefit for plaintiffs, and it’s a vital piece of information for attorneys to share with clients when discussing their options.

Clearing up common myths about lawsuit advances

One of the biggest myths is that all lawsuit funding is predatory. While it’s true that many for-profit funders charge high, compounding interest rates that can quickly diminish a client’s settlement, that’s not the whole story. These companies often defend their rates by highlighting the non-recourse risk they absorb. However, fair and ethical funding options do exist. Our nonprofit mission is to provide a transparent alternative with simple, non-compounding interest that puts plaintiffs first. It’s crucial to read the fine print and understand the terms. A trustworthy funder will offer clear, simple interest rates and operate with a mission that aligns with your client’s best interests, not with maximizing profit.

Does Your Case Qualify for a Lawsuit Advance?

One of the first questions attorneys and their clients ask is whether their specific situation is eligible for funding. The good news is that lawsuit advances are not limited to a single type of legal action. Most funders focus on cases where a plaintiff has suffered a physical or financial injury and is likely to receive a monetary settlement. The common thread is a clear injury and a defendant with the ability to pay.

While the exact criteria can vary between funding companies, many types of personal injury, civil rights, and employment lawsuits are commonly accepted. The key is less about the specific legal category and more about the strength and merits of your individual case. Funders will work with your attorney to review the facts, the evidence, and the potential for a successful outcome. If you have a strong claim, there’s a good chance you can find a funding partner to provide the financial stability you need while your attorney fights for the full value of your settlement. At The Milestone Foundation, we work directly with you, the attorney, to understand the case and provide fair, simple-interest funding for your client. You can apply for funding on your client’s behalf at any time.

Personal injury cases

Personal injury claims are the most common type of lawsuit to receive funding. These cases cover any situation where you were physically harmed due to someone else’s negligence. This includes everything from a slip and fall at a grocery store to injuries from a defective product. If your client has significant injuries from an accident caused by another party, they will likely qualify for funding. Funders look for clear liability and documented medical treatment, which makes these cases a strong fit for a lawsuit advance. The goal is to provide financial support so your client can cover medical bills and living expenses without being forced to accept a lowball settlement offer.

Medical malpractice claims

Medical malpractice lawsuits can be long, complex, and emotionally draining. When a trusted medical professional makes a mistake that results in harm, the financial and personal costs can be devastating. Because of the significant damages often involved, many funders offer advances for medical mistakes and other healthcare-related negligence. These funds can help your client manage their expenses during the extended litigation process that malpractice cases often require. A funder will work closely with you to understand the expert opinions and evidence that support your client’s claim, ensuring they have the resources to see the case through to a just resolution.

Car accident lawsuits

Car accidents are one of the most frequent reasons plaintiffs seek financial support. The immediate aftermath of a crash can leave your client with mounting medical bills, lost wages from being unable to work, and the stress of a lengthy legal battle. Many companies provide lawsuit cash advances specifically for individuals involved in auto accidents who are waiting for their case to settle. This funding provides a crucial lifeline, allowing your client to stay afloat financially while you negotiate with the insurance company. Because liability is often clear and damages are well-documented in these cases, they are a prime candidate for a lawsuit advance.

Workers’ compensation cases

Workers’ compensation claims can be tricky when it comes to funding. While some companies do offer advances for employment and civil rights cases, including workers’ comp, many funders do not. State laws governing workers’ compensation can create complex legal hurdles that make it difficult to secure an advance against a future settlement. For example, some state regulations restrict or prohibit the assignment of benefits to a third party. It’s important to check with a potential funder directly about their policy on these cases, as eligibility can vary significantly based on both the funder’s internal rules and your specific state’s laws.

What You Need to Qualify for a Lawsuit Advance

Securing a lawsuit advance can provide much-needed financial stability while you wait for your case to settle. While every funding company has its own specific criteria, there are four fundamental requirements you’ll almost always need to meet. Think of these as the building blocks of a successful application. Before you begin, gathering your information and understanding these key qualifications will make the process smoother for both you and your attorney. Let’s walk through exactly what funders are looking for.

A pending lawsuit

First and foremost, you must have an active, pending lawsuit. A lawsuit advance isn’t a personal loan; it’s an advance on the potential proceeds of your legal claim. This means there needs to be an actual case for a funder to evaluate. Without a formal complaint filed in court, there is no basis for funding. The entire process hinges on the details of your case, from the defendant’s liability to the potential settlement amount. An active lawsuit provides the necessary framework for a funder to assess the risk and potential of providing you with an advance.

An attorney representing you

You must be represented by an attorney. Reputable funders will not provide an advance to plaintiffs who are representing themselves. Why? Your attorney provides a professional assessment of your case’s strengths and weaknesses, which is essential for the funder’s review process. They also manage the legal complexities and will be responsible for repaying the advance from the settlement funds. At Milestone, we work directly with attorneys to ensure the process is seamless and that the funding serves your best interests without interfering with legal strategy. Having a lawyer is a sign that your case is being handled professionally.

A strong, meritorious case

The strength of your case is the single most important factor in your application. Funders approve advances based on the merits of your lawsuit, not your credit score or employment history. A “strong case” is one with clear liability (it’s obvious who is at fault), solid evidence, and a high likelihood of a successful settlement. If the details are murky or fault is difficult to prove, a funder may see the case as too risky. This focus on case quality is what allows funding to be non-recourse, meaning you only repay the advance if you win your case.

Eligibility in your state

Finally, your eligibility depends on where your lawsuit is filed. Not all funding companies operate in every state, as regulations around litigation funding can vary significantly. Before you invest time in an application, confirm that the company provides funding in your state. A quick check on the funder’s website can save you a lot of hassle. If you live in a state where a company doesn’t operate, your application will likely be denied right away. You can see if you qualify and apply for funding with Milestone directly on our website.

What Does a “Strong Case” Really Mean?

When we talk about a “strong case” in the context of lawsuit funding, we aren’t just talking about the merits or the emotional weight of your client’s story. From a funder’s perspective, a strong case is one with a clear and predictable path to a successful outcome. Because lawsuit advances are non-recourse, meaning the plaintiff only pays back the advance if they win their case, funders need to carefully evaluate the risk involved. We are, in essence, investing in the future success of the lawsuit. If the case is lost, the plaintiff owes nothing, so our underwriting process has to be thorough.

This evaluation isn’t a judgment on your client’s experience or your legal skills. It’s a practical assessment based on a few key factors that consistently point toward a positive resolution. Understanding these factors can help you and your client prepare a more effective application and set realistic expectations. As a nonprofit, our mission is to provide a financial lifeline, not to gamble on uncertain outcomes. That’s why we partner closely with you, the attorney, to understand the specifics of the case. We trust your expertise, and our review is designed to complement your strategy. A strong case for funding is one where we can confidently see a win for your client, ensuring they receive both the immediate support they need and a meaningful recovery at the end. Let’s break down the four main components we look for.

Clear liability and solid evidence

First and foremost, we need to see that the defendant is clearly at fault. If liability is murky or contested, the case becomes a much riskier prospect. A funder needs to feel confident that a judge or jury would likely find the other party responsible for your client’s injuries. This is why clear liability is so crucial; if fault isn’t evident, many providers will see the case as too risky to approve.

Solid evidence is what transforms a claim of fault into a fact. This includes documentation like police reports, incident reports, witness statements, photos or videos of the scene, and expert opinions. The more objective, well-documented evidence you have to support your client’s claim, the stronger the case appears. It removes ambiguity and demonstrates a high likelihood of success, which is exactly what funders need to see before they can provide an advance.

A substantial potential settlement

A strong case must have a potential settlement value that is large enough to be meaningful for the plaintiff after all other obligations are paid. Before providing an advance, a funding company will assess how likely you are to win your case, which is essential for determining the potential settlement amount. We look at the total estimated value of the case and work backward.

The final settlement needs to cover your attorney’s fees, case expenses, any medical liens, and the full repayment of the lawsuit advance. After all of that, there must still be a significant amount left for your client. If the potential settlement is too small, an advance could consume most of the proceeds, which doesn’t align with our mission to help plaintiffs. We want to provide a financial bridge, not create a future financial burden.

A defendant who can pay

A successful verdict is only half the battle; the defendant must have the financial means to actually pay the settlement or judgment. This is a critical, and sometimes overlooked, component of a strong case. We always verify that the defendant has sufficient insurance coverage or assets to cover the potential settlement. A multi-million dollar judgment against an individual or company with no money is unfortunately not worth much.

For this reason, cases against large corporations, municipalities, or well-insured defendants are often viewed as stronger candidates for funding. It is important that the defendant you are suing has sufficient insurance or financial resources to cover a potential settlement, as this directly impacts the viability of your case. This ensures that if you and your client win, there is a clear path to collecting the funds.

The current stage of your lawsuit

The timing of your application matters. While we understand the need for funds can arise at any point, cases that are in the very early stages can be difficult to evaluate. As one funding company notes, new cases often lack the necessary documentation, such as medical or police reports, which can hinder an assessment of the case’s strength. Without a filed complaint, initial discovery, or established medical records, it’s challenging to verify liability and damages.

A case doesn’t need to be on the courthouse steps to qualify, but having key documents in order makes the application process much smoother and faster. Ideally, the complaint has been filed and the plaintiff has a clear record of medical treatment. This gives us the concrete information we need to work with you and your client. We have a dedicated process for attorneys to make submitting this information as simple as possible.

Getting Your Paperwork in Order: What to Submit

Once you and your attorney decide that a lawsuit advance is the right move, the next step is gathering your documents. Think of it as preparing a file that tells the story of your case. Having everything organized ahead of time makes the process much smoother and helps us review your request quickly. A complete and consistent file shows the strength of your claim and allows us to make a fair and responsible funding decision.

When you’re ready to submit your application, you’ll find that the required paperwork falls into a few main categories. We need to understand the legal basis of your lawsuit, confirm that you have an attorney guiding you, and see clear proof of the damages you’ve suffered. It might seem like a lot, but your attorney will already have most, if not all, of this information on hand. Our goal is to work alongside your legal team, and providing these documents is the first step in building that partnership. Let’s walk through exactly what you’ll need to provide.

Key case and legal documents

First, we’ll need to see the core legal documents that define your lawsuit. This typically includes the initial complaint filed with the court, any police or incident reports, and other key filings that outline the facts of your case. It’s important that the information is accurate and consistent. Any contradictions in your account can create confusion and potentially weaken your case, which is something funders look at closely. Providing a clear, cohesive set of documents helps us understand the merits of your claim and confirms that you have a solid legal foundation to build upon.

Your attorney’s contact details

This might sound simple, but it’s one of the most critical pieces of information you can provide. A primary requirement for any reputable lawsuit advance is that you are represented by an attorney. We don’t just fund cases; we partner with the legal professionals who manage them. We need your attorney’s name, phone number, and email to discuss the details of your case, review its strengths, and coordinate funding. Providing this information allows us to work directly with your legal team to ensure the process is seamless and that the advance aligns with your overall legal strategy.

Proof of medical treatment and bills

For personal injury cases, documenting your damages is essential. This means providing clear proof of your medical treatments and the costs associated with them. We’ll need to see things like hospital bills, records from doctor’s visits, physical therapy invoices, and any other documentation that shows the extent of your injuries and financial losses. New cases sometimes lack sufficient medical records, so it’s important to gather everything you have. This paperwork demonstrates the tangible impact the incident has had on your life and is a key factor in how we determine a responsible funding amount.

The Application Process, Step by Step

When you’re managing the complexities of a lawsuit, the last thing you or your client need is a confusing and lengthy funding process. We’ve designed our application to be clear, quick, and straightforward, so your client can get the financial support they need without any added hassle. The entire process is built on transparency and a close partnership with you, their attorney. Here’s a look at how it works from start to finish.

Step 1: Fill out and submit your application

Getting started is the easiest part. The first step is for you or your client to fill out our simple application online, which takes just a few minutes to complete. We only ask for the essential information needed to begin the review: the plaintiff’s name, their contact details, and your information as their attorney. Because we work directly with legal counsel to ensure funding is appropriate for the case, representation by an attorney is a firm requirement. Once the form is submitted, our team gets an immediate alert and we prepare to move on to the next step.

Step 2: We review your case with your attorney

After we receive the application, our team will reach out to you directly to discuss the case. This is not an automated, impersonal process; we take the time to understand the specific details of the lawsuit. We’ll ask for key documents to help us evaluate the strength of the claim and determine a responsible funding amount. This collaborative approach ensures we work with your legal team as a true partner. Our goal is to provide a financial bridge for your client that supports, rather than complicates, your legal strategy and protects their potential settlement.

Step 3: Get approved and receive your funds

Once our review is complete and we’ve determined the case is a good fit for funding, we will send over a clear, easy-to-understand agreement for you and your client to sign. We pride ourselves on transparency, so you’ll see our simple interest rate and all terms laid out with no hidden fees or confusing language. After the signed agreement is returned, we move quickly to disburse the funds directly to your client. This money is non-recourse, which means if the case is ultimately unsuccessful, your client owes us nothing.

How fast can you get funded?

We know that when a client needs financial help, time is critical. While the total timeline can vary depending on the case, many clients receive their funds within 24 hours of their application being approved. The fastest way to move the process along is for attorneys to have the key case documents ready when we call. The review itself is typically quick, but its speed depends on how quickly we can connect with you and receive the necessary paperwork. From there, approval and funding happen fast, getting your client the resources they need to pay bills and focus on their recovery.

How Much Money Can You Get?

After confirming your client’s case is a good fit for funding, the conversation naturally turns to numbers. How much financial support can a plaintiff actually receive? It’s a critical question, especially when bills are piling up and the pressure is mounting. The answer isn’t a simple, one-size-fits-all figure. Instead, it’s a careful calculation based on the specific details of the lawsuit. A responsible funder’s goal is to provide enough money to relieve the immediate financial strain without putting the final settlement at risk. As an attorney, your role is to help your client find this balance. Guiding them to understand how the advance amount is determined, and the very real dangers of taking on too much, is essential for making a sound decision that supports their long-term financial well-being.

How your advance amount is calculated

The amount of money you can get from a lawsuit advance is directly linked to the estimated value of your case. Generally, funders will advance between 10% and 20% of the potential settlement. To determine this amount, the funding company will work with your lawyer to review the case details, assess the strength of the evidence, and project a likely outcome. The entire approval process is based on the merits of the legal claim. Unlike a traditional loan, your client’s personal credit score, income, or employment history doesn’t play a role. The focus is squarely on the case itself, which ensures the advance is a sensible and realistic reflection of its potential worth.

The danger of taking too much money

While the idea of a large cash advance can seem appealing, it’s almost always better to be conservative. Remember, the advance plus any interest is repaid from the final settlement funds. The more a plaintiff takes upfront, the less they will receive when the case finally resolves. For this reason, it’s best to only ask for the amount you truly need to cover necessary living expenses and medical bills. It is crucial to pay close attention to the interest rate and how it accumulates. Predatory funders often use high, compounding interest rates that can consume a huge portion of a settlement, leaving a plaintiff with far less than they deserve. A smaller advance from a transparent, ethical funder is always the safer and smarter path.

Understanding the Risks of Lawsuit Funding

A lawsuit advance can be an essential tool, providing the financial stability needed to see a case through to a just resolution. However, the funding industry is filled with potential traps. Understanding these risks is the first step to protecting your client and their settlement. It’s crucial to look past the promise of fast cash and examine the terms closely, as some funding agreements can do more harm than good. Let’s walk through the most significant risks you and your client need to watch for before you apply for funding.

Predatory rates and compounding interest

Many for-profit funding companies charge extremely high interest rates. It’s not uncommon to see rates of 40%, 60%, or even higher. The real danger, however, often lies in compounding interest. This means your client pays interest not just on the initial advance, but also on the accumulated interest. Over the life of a lawsuit, which can take years, this can cause the amount owed to skyrocket, sometimes to several times the original advance. A small cash advance can quickly turn into a massive debt that consumes a huge portion of the final settlement, leaving your client with far less than they deserve for their injuries and losses.

How funding can affect your settlement strategy

When a plaintiff is watching their funding balance grow due to compounding interest, it creates immense pressure. This financial anxiety can directly impact your legal strategy. A client may feel an urgent need to settle the case quickly, even if it means accepting a lower offer than they are entitled to. They might push to resolve the case just to stop the interest from piling up. This puts you, as their attorney, in a difficult position and can undermine your ability to negotiate for the best possible outcome. The right funding partner should provide relief, not add another layer of stress that compromises the case’s value.

An industry without guardrails

The consumer litigation funding industry operates in a bit of a gray area. Because advances are typically non-recourse (meaning the plaintiff owes nothing if they lose), they aren’t classified as traditional loans. As a result, they often fall outside the scope of lending laws that protect consumers. This lack of regulation means there are few established rules for interest rate caps, fee transparency, or contract terms. This environment allows some funders to create confusing agreements with hidden fees and predatory terms, making it essential for attorneys to carefully vet any funding company before their client signs on.

Why Might Your Application Be Denied?

Receiving a denial for a lawsuit advance can feel discouraging, but it’s rarely a final judgment on your case. More often than not, a denial simply means the application is missing a key piece of the puzzle. Understanding the common reasons for denial can help you and your attorney prepare a stronger application from the start, ensuring you have everything in order before you submit.

Think of it as a roadmap. Funders look for specific criteria to assess the risk and potential of a case. If your application doesn’t meet those criteria at the time of review, it may be turned down. The good news is that many of these issues are fixable. Whether it’s a matter of timing, missing documents, or not having the right support in place, identifying the problem is the first step toward a solution. Below, we’ll walk through the most frequent reasons an application might be denied and what you can do about it.

Your case isn’t strong enough yet

This is a common reason for denial, especially for newer cases. When a funder says a case isn’t “strong enough,” it isn’t a comment on whether you’ll eventually win. It’s an assessment of the evidence available right now. Funders need to see clear proof of liability (who is at fault) and well-documented damages. For example, new cases often lack the needed documentation like comprehensive medical reports or a completed police report. If your application is denied for this reason, don’t lose hope. It often just means you need to wait until your case has progressed further and more concrete evidence has been gathered. You can always reapply later.

Missing or incomplete paperwork

Sometimes, the reason for denial is simple administrative oversight. An incomplete application is one of the most frequent reasons for a pre-settlement funding denial because it forces a funder to make a decision with partial information. To review your case, a funder needs a complete picture, which requires specific documents. This can include the official complaint, medical records, and other key evidence. An incomplete submission almost always results in a denial. At Milestone, we work directly with attorneys to streamline this process, but ensuring all documents are ready to go is the fastest way to get an answer. You can see what we require when you apply for funding.

You don’t have an attorney

This is a non-negotiable requirement for any reputable funder. If you apply for a lawsuit advance without legal representation, your application will be denied. Having an attorney is a critical prerequisite because it confirms that a legal professional has vetted your claim and believes it has merit. Funders rely on your attorney’s expertise to understand the case and its likelihood of success. We partner closely with lawyers throughout the funding process, from the initial review to the final repayment. This attorney-aligned model protects both you and the funder, ensuring your legal strategy and financial needs are in sync. If you don’t have a lawyer yet, your first step is to find one.

How to Choose the Right Funder: Terms and Red Flags

Finding a lawsuit funding company can feel overwhelming, but knowing what to look for makes all the difference. Not all funders operate with your client’s best interests at heart. The industry is largely unregulated, which means it’s up to you and your client to carefully vet potential partners. Understanding a few key terms and spotting the red flags from the start can protect your client’s settlement and give them the financial stability they need without predatory terms. Let’s walk through what separates a trustworthy partner from a financial trap.

A good funder provides a lifeline, not an anchor. By focusing on transparency and fairness, you can help your client secure an advance that supports them through their case without sacrificing their future financial health. This process is about finding a partner who aligns with your goal: achieving the best possible outcome for your client. The right funding can give a plaintiff the breathing room to reject lowball settlement offers and wait for a fair resolution. The wrong funding can create a new financial crisis, eroding the settlement they fought so hard to win. Before you recommend a funder or your client signs an agreement, it’s critical to look beyond the promise of fast cash and examine the structure of the deal itself.

What “non-recourse” means (and why it’s a must-have)

The single most important term to understand in lawsuit funding is “non-recourse.” In simple terms, non-recourse funding means that if your client loses their case, they owe the funder nothing. The advance is repaid only from the proceeds of a successful settlement or verdict. This structure places the financial risk squarely on the funder, not the plaintiff. If a company’s terms state that the money must be repaid regardless of the case outcome, you are not looking at a lawsuit advance; you are looking at a traditional loan with a different name. A non-recourse agreement is the absolute standard for ethical lawsuit funding, so consider its absence an immediate deal-breaker.

Simple vs. compound interest: A critical difference

Interest rates are where many plaintiffs get into trouble. Lawsuit funding is considered high-risk, so the rates are typically higher than a standard loan. However, the type of interest charged is what truly impacts the final amount your client will owe. Many for-profit funders use compounding interest, which is calculated on the principal amount plus the accumulated interest. Over months or years, this can cause the balance to grow exponentially, taking a huge bite out of the final settlement. A much fairer alternative is simple interest, which is calculated only on the original advance amount. It’s predictable and transparent, ensuring there are no shocking surprises when it’s time to pay.

Nonprofit vs. for-profit funders: Why the mission matters

The funder’s business model tells you a lot about their priorities. Most lawsuit funding companies are for-profit businesses. Their primary goal is to generate revenue for their investors, which often leads to high, compounding interest rates and aggressive terms designed to maximize their return. A nonprofit funder, on the other hand, operates with a completely different purpose. A nonprofit’s mission is to serve plaintiffs by providing a financial lifeline on fair and ethical terms. Because they are not driven by profit, nonprofits can offer more favorable conditions, like low, simple interest rates. Choosing a mission-driven partner ensures your client is working with an organization that prioritizes their well-being over its own bottom line.

Your checklist for a trustworthy funding partner

When you’re ready to apply for funding, use this checklist to guide your conversation with any potential funder. A trustworthy partner will be transparent and happy to answer these questions.

• Is the funding truly non-recourse? If the answer is anything but a clear “yes,” walk away.
• How is interest calculated? Look for low, simple interest. If they charge compounding interest, ask for a payoff schedule to see how quickly the balance will grow.
• Are there any hidden fees? Demand a full, clear list of all application, processing, or administrative fees. There should not be any.
• Do they work directly with attorneys? A reputable funder will always collaborate with the plaintiff’s attorney to review the case and coordinate funding. This professional approach is a sign of a legitimate operation.

Related Articles

• Plaintiff Litigation Funding: Questions Attorneys Should Ask
• The Hidden Cost of Compounding Interest in Lawsuit Loans
• The Milestone Foundation: Fair Legal Funding

Frequently Asked Questions

If my client loses their case, do they have to pay back the advance? No, they do not. This is the most important feature of a lawsuit advance, which is also called non-recourse funding. Repayment is entirely dependent on a successful outcome for your client. If you don’t win a settlement or verdict, your client owes the funder nothing. The funding company assumes all of the financial risk, which is what makes this a safe option for plaintiffs and fundamentally different from a traditional loan.

Will taking a lawsuit advance reduce my client’s final settlement? An advance is repaid from the settlement, so it will affect the final amount your client takes home. The key is to minimize that impact. The two biggest factors are the interest rate and the amount borrowed. Many for-profit funders use high, compounding interest that can quickly grow and consume a large part of the settlement. By choosing a funder with low, simple interest and advising your client to only take what they absolutely need for essential expenses, you can protect the value of their case and ensure the advance serves as a helpful bridge, not a future burden.

Why do you require a client to have an attorney for funding? We only provide funding to plaintiffs who are represented by legal counsel. This is a non-negotiable requirement because it protects everyone involved, especially the client. Your involvement confirms that a legal professional has reviewed the case and believes it has merit. It also ensures the funding process aligns with your legal strategy. We partner directly with you to review documents and coordinate everything, which creates a seamless and responsible process that prioritizes your client’s best interests.

My client’s application was denied by another funder. Can we still apply with you? Yes, you absolutely can. A denial from one company is not a final judgment on your client’s case. Different funders have different criteria, and a denial can happen for many reasons. The case may have been too new at the time, or perhaps the other funder doesn’t cover that specific case type. We encourage you to apply with us, as our nonprofit mission and underwriting process may lead to a different outcome, especially if the case has progressed since the last time you sought funding.

What’s the most important thing to look for when choosing a funding company? Beyond ensuring the funding is non-recourse, you should focus on two things: the interest structure and the funder’s business model. Always look for a company that offers low, simple interest, as this is predictable and prevents the debt from spiraling out of control. Then, consider if the funder is a for-profit or nonprofit organization. A for-profit company is built to maximize returns for its investors, while a nonprofit’s mission is centered on helping plaintiffs. Choosing a mission-driven partner helps ensure the terms will be fair and transparent.