Is There a Minimum Settlement Amount to Qualify for Pre-Settlement Funding?

Most funders require a minimum projected settlement to make the advance economics viable. The threshold varies by funder, but cases with very small projected recoveries typically do not qualify.

Pre-settlement funding companies do not publish universal minimum settlement thresholds, but the economics of the product create a practical floor. Because funders advance 10–15% of expected net recovery, and because there are fixed costs associated with underwriting and administration, cases with very small projected settlements — generally under $10,000 to $15,000 net — may not generate an advance large enough to be useful or economically viable for the funder.

Expected net recovery is what matters, not gross settlement. From the gross settlement amount, subtract attorney fees (typically 33–40%), medical liens, case expenses, and any other priority obligations. The net figure is what the funder underwrites against. A $50,000 gross settlement with $20,000 in attorney fees and $15,000 in medical liens leaves a $15,000 net — supporting an advance of roughly $1,500 to $2,500 at standard advance ratios.

Case type affects the floor. Personal injury cases with clear liability, documented injuries, and insured defendants typically meet threshold requirements more easily than cases with shared fault, coverage disputes, or uncertain damages. Employment and civil rights cases may involve non-economic damages that are harder to quantify at the time of application, which affects how funders project recovery.

If your projected settlement is on the lower end, speak with your attorney about whether the advance amount available is sufficient for your needs. A small advance on a small case may not be worth the repayment cost — your attorney can help you evaluate whether funding makes sense in your specific situation.

Source: ALFA Consumer Litigation Funding Code of Conduct. Advance ratios and minimum thresholds vary by funder and jurisdiction.

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