Pre-settlement funding offers a financial safety net for plaintiffs awaiting the resolution of their lawsuit without the credit requirements or repayment obligations associated with traditional loans. It is like a cash advance on an anticipated settlement or verdict. The future settlement serves as collateral. Learn more about how these options differ so you can choose the one that’s right for you.
Mustang Funding is a litigation finance company focused on high-quality, transparent capital solutions for law firms and their clients. If you have questions, we’d love to hear from you.
What Is Pre-Settlement Funding?
Pre-settlement lawsuit funding is designed for plaintiffs involved in active lawsuits. It provides a cash advance based on the strength of your case while it winds its way through the legal system. Pre-settlement lawsuit funding can cover everyday expenses, including rent, mortgage, utility bills, groceries, and medical care.
Generally, the advance is a percentage of what you might recover from your claim and helps level the economic playing field against deep-pocketed defendants and insurance companies. Pre-settlement funding provides the money you need for the short term so that your lawyer can continue to negotiate the best possible settlement for you.
Traditional Loans vs. Pre-Settlement Funding
Now that you have an idea of how pre-settlement funding works, let’s compare it to traditional loans. Both offer financial assistance, but only one addresses the unique challenges plaintiffs face during a long, drawn-out legal case.
Here are the key differences between a pre-settlement advance and a traditional loan.
Approval Criteria
- Pre-settlement funding is based on the strength of your legal case, not your credit score or income. This makes it available to those with limited financial history or who are currently unable to work.
- Traditional loans, on the other hand, depend on your credit history and income and sometimes require collateral. Approval for a loan can be difficult if you have a low credit score or inconsistent income.
Repayment Obligation
- Pre-settlement funding is non-recourse, meaning it is only repaid if your case results in a successful outcome. If there’s no recovery, there’s no obligation to repay it.
- Traditional loans require regular monthly payments regardless of how your case resolves. This can create added pressure during a time when income may already be limited.
Timeline
- Pre-settlement funding is often available within 24 to 48 hours of approval, which can make a meaningful difference when immediate expenses are piling up.
- Traditional loans can take days or even weeks to process, and delays in approval or disbursement can add stress during financial emergencies—making them less practical when immediate support is needed.
Use of Funds
- Pre-settlement funding, as noted, can be used freely for personal needs such as rent, medical expenses, or groceries. There are typically no restrictions on how the money is used.
- Traditional loans may come with restrictions depending on the lender. Certain loans are intended for specific purposes, such as education or home improvement, which may not align with your current needs.
Contact Mustang Funding Today
When you’re in the middle of a lawsuit, access to fast, flexible funding can make a real difference. Pre-settlement funding is designed with plaintiffs in mind, offering a way to manage immediate needs without the constraints of credit-based lending. The application process can take less than two minutes, with no hidden fees or charges.
To learn more, explore our ultimate guide to pre-settlement funding or contact Mustang Funding. We have 100+ years of combined experience and are proud to work with individuals and law firms nationwide.
About Mustang Funding
Mustang Funding, founded in 2018 and based in Wayzata, MN, is a litigation finance company dedicated to empowering individuals and law firms nationwide with transparent and innovative financial solutions. With over $170 million funded, 10,000+ checks issued, and more than 3,000 cases financed, Mustang provides plaintiff pre-settlement funding, law firm financing, and commercial funding to meet diverse client needs. Their commitment to transparency, integrity, and expertise sets them apart, offering tailored financial support to plaintiffs, businesses, and legal professionals. By bridging capital gaps and fostering access to justice, Mustang Funding continues to lead the legal asset investment industry with a strategic, inclusive, and forward-thinking approach.
