At Mustang Funding, we occasionally use the term “lawsuit loan,” since it’s a common search phrase. However, what we offer is technically different. Pre-settlement funding is a non-recourse cash advance for plaintiffs engaged in a lawsuit. It offers access to funds quickly, with no obligation to repay if they lose. It also doesn’t require a credit check or proof of employment, making it more accessible during periods of financial stress.
While the cost can be higher than traditional financing, such as a personal loan, and it does reduce your final settlement, the immediate relief it provides often outweighs those drawbacks, especially when it helps cover essentials like rent, medical bills, or everyday expenses.
Mustang Litigation Funding, located in Wayzata, MN, offers ethical institutional litigation funding to support justice. Please contact us if you’d like more information.
The Pros of Pre-Settlement Funding
Plaintiffs facing financial hardship often find themselves at a disadvantage during settlement negotiations against deep-pocketed defendants. Your lawyer knows a fair settlement amount based on the nature of your injuries and prognosis. However, it is in the insurance company’s interest to delay a settlement for as long as possible.
Insurers know how vulnerable plaintiffs are in such situations and that the need for money may drive them to accept a lower settlement due to hardship. 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. For a more in-depth look, please see our ultimate guide to pre-settlement funding.
Other benefits include:
- No impact on your credit: Applying for pre-settlement funding won’t affect your credit score, and approval doesn’t depend on your credit history.
- No employment check required: Your application is evaluated solely on the strength of your legal claim—not your work history or current job status.
- Risk-free if you lose: Because pre-settlement funding is non-recourse, you owe nothing if your case doesn’t result in a settlement or court award. We assume the risk, so you don’t have to.
- Flexible use of funds: Whether you need help with medical bills, rent, groceries, or other living expenses, there are typically no restrictions on how you use your advance.
- No monthly payments: Unlike loans or credit cards, you don’t make monthly payments. The advance is only repaid if—and when—your case is successfully resolved.
The Cons of Pre-Settlement Funding
Pre-settlement funding isn’t the right choice for everyone. Because it’s not a loan, expect the rates to be higher than for personal, auto, or mortgage loans.
So, if you have decent credit and are comfortable with income and employment verification, a personal loan from a bank, credit union, or online lender may cost less. However, it’s important to remember that personal loans are recourse—meaning you’re legally obligated to repay them, even if you lose your case or don’t receive a settlement.
As noted, pre-settlement funding is non-recourse, so if your case doesn’t succeed, you owe nothing. This makes it a far less risky option for plaintiffs facing uncertainty during litigation.
Contact Mustang Funding Today
Mustang Funding is a litigation finance company focused on high-quality, transparent capital solutions for law firms and their clients. Our innovative and flexible litigation funding solutions ensure no one is denied their right to a fair legal battle.
If you’re in the midst of a lawsuit, facing financial constraints, and would like more information on how pre-settlement funding works, don’t hesitate to contact us. We’d love to hear from you.
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.
