Is Getting a Cash Advance on Your Lawsuit Right for You?

Pre-settlement funding is not right for every plaintiff. Understanding when it helps — and when the costs outweigh the benefits — is essential before applying.

Pre-settlement funding is a powerful tool for plaintiffs in genuine financial distress — when the alternative is eviction, medical treatment deferral, or accepting an inadequate early settlement. In those situations, the cost of the advance is often well worth the financial stability and case positioning it provides.

The calculus changes when the financial need is less acute, the case is close to settlement, or the advance amount is large relative to the expected net recovery. A 30% simple interest rate on a case that settles in three years is a different financial outcome than the same rate on a case that settles in six months. If your case is in advanced settlement discussions, waiting may be better than taking on funding costs.

Questions to ask yourself before applying: (1) Is my financial need immediate and genuine — will not having this money materially harm me or my case? (2) Is my case expected to take significantly more time to resolve? (3) Is the advance amount I need small relative to my expected net recovery? (4) Have I discussed this with my attorney, and does my attorney support the decision? Affirmative answers to all four support applying.

Questions that suggest reconsidering: Do I need the money for discretionary purposes rather than necessities? Is my case expected to settle within 60 to 90 days? Would taking this advance consume more than 25% of my expected net recovery? Has my attorney expressed serious concerns? These do not necessarily disqualify you — but they warrant careful thought before signing.

Criterica Capital encourages potential applicants to discuss the decision with their attorney before applying. The goal is to help plaintiffs make informed decisions, not to generate advances that are not in their best interest.

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