Question 1

What is a workers’ comp settlement loan (also called pre-settlement funding)?

Accepted Answer

It’s a cash advance given by a legal funding company or financial institution to people with an active workers’ compensation claim. The advance is repaid from the eventual settlement or award. If the case fails, often (but not always) you won’t have to repay the advance (non-recourse funding).

Question 2

Why might I need one?

Accepted Answer

Because workers’ comp cases can take months or years to resolve. You may have bills—medical, living, utilities—and lost income while you recover and wait. A settlement loan can help with those costs in the meantime.

Question 3

How do I qualify for a workers’ comp settlement loan?

Accepted Answer

Eligibility generally requires an active workers’ comp claim, often legal representation, and a case that is likely to settle with some value. The strength of your medical documentation, lost wages, the severity of your injury, and legal merits can all impact qualification. No credit check or collateral may be needed in many cases.

Question 4

What are the costs and interest rates associated with these loans?

Accepted Answer

These funds often come with higher costs or interest, or fees. Because the risk is shifted (if you lose your case, you may not owe anything), lenders charge more. If your case takes a long time, interest or fees can build up. It’s important to read the terms and understand how much will be repaid from your settlement.

Question 5

Is there risk if I take a workers’ comp settlement loan?

Accepted Answer

Yes. Key risks include: high interest or fees, the possibility that the settlement will be reduced because the loan (or its fees) gets deducted; or that the case takes longer than expected, increasing total cost. Additionally, the funding company’s agreement and legal representation matter. Even with non-recourse loans, some parts of the cost are still passed to you if things go wrong.

Question 6

What does “non-recourse” mean in this context?

Accepted Answer

“Non-recourse” means you don’t owe anything if you lose your case or the claim doesn’t result in a settlement. The funding company only gets repaid if and when your case settles.

Question 7

How long does it take to get the funds?

Accepted Answer

Often funding can be approved and dispersed relatively quickly—sometimes within 24–48 hours once everything is submitted and approved. But this depends on the funding company and what documentation is required.

Question 8

How much money can I get?

Accepted Answer

The amount depends on the estimated value of your settlement: how serious your injury is, how much medical treatment and lost wages you have, how strong your case is. Usually you receive a portion percentage of what the case is likely worth today.

Question 9

Will this affect my settlement outcome?

Accepted Answer

Not directly in most cases. The funding company doesn’t decide the legal outcome. However, agreeing to a settlement loan can reduce what you net from your settlement (because you’ll owe the advance plus fees). Also, your attorney should review any agreement to make sure it doesn’t give creditors or others a prior claim.

Question 10

What should I look out for in the loan agreement?

Accepted Answer

Important items include: the interest rate or fee structure; what percentage of your settlement will go to repay the advance; whether the loan is truly non-recourse; how long you have to repay; whether the funding company charges additional fees; whether your attorney is involved; and whether any state laws regulate or restrict these kinds of funding.

Workers Comp Settlement Loan – Fast Cash for Injured Workers