Plaintiff Cash Advance

A plaintiff cash advance is a purchase of a contingent interest in the future proceeds of a pending personal injury or other tort claim, providing the injured claimant with cash before the case resolves. Structurally, it is styled as a sale of a portion of the anticipated settlement or judgment rather than a loan: the funding company acquires a right to be repaid from proceeds if and only if the case succeeds, and typically has no recourse to the claimant's other assets or wages if the case fails or nets less than expected. Amounts are usually small relative to institutional commercial funding — commonly a few hundred to a few tens of thousands of dollars — sized against the claimant's immediate financial pressure (lost wages, rent, medical costs not covered by treatment) rather than against total case exposure. Funding companies price the advance using a fee that accrues over time, typically expressed as a periodic percentage applied on a simple or compounding basis, and disburse funds directly to the claimant only after confirming counsel's engagement and the case's procedural posture through the attorney acknowledgment process. Because repayment depends entirely on the size and timing of an eventual settlement, the underwriting emphasis is on liability clarity, insurance coverage limits, and how far the claimant is willing to see the case through, rather than on credit history or income — the product is expressly not evaluated the way a personal loan would be.

Pricing a cash advance turns on the size of the claim relative to the advance requested, not on the claimant's ability to repay from other sources — funders size initial disbursements to leave meaningful room between the projected net settlement and the total repayment obligation, since a claimant with no funds left at settlement makes future stacking, referrals, and dispute exposure worse for the whole book.

Underwriting typically weights liability admissions, insurance policy limits, and treatment status more heavily than case size alone, because a large claim against a defendant near its policy limit caps the practical repayment ceiling regardless of the injury's severity.