What Is a Settlement Advance (Pre-Settlement Funding)?

Find Law Fast Team
Jun 23
2 min read

Car accident cases can take months — sometimes years — to resolve. In the meantime, bills pile up, paychecks may stop, and financial pressure builds. That’s where a settlement advance, also called pre-settlement funding, comes in.

But what exactly is it, and is it a good idea? Let’s break it down.

1. What Is a Settlement Advance?

A settlement advance is money you can receive upfront against your future settlement.

It’s not a loan — it’s an advance on the money you’re likely to win or settle for.
Repayment only happens if you win or settle the case.
If you lose, you usually don’t owe the funding company anything.

2. Why People Use Pre-Settlement Funding

Victims often turn to advances when they need immediate financial relief for:

Medical bills not fully covered by insurance.
Rent, mortgage, or utilities while out of work.
Everyday expenses while waiting for a settlement check.

It acts as a financial bridge during a tough time.

3. How It Works

The process usually looks like this:

Apply with a funding company.
They review your case details (with help from your attorney).
If approved, you receive a lump sum of cash.
When your case settles, repayment comes directly out of your settlement.

4. The Downsides

While helpful, settlement advances aren’t free money. Risks include:

High fees and interest: Some companies charge steep rates.
Reduced final payout: You’ll receive less once the advance is repaid.
Not guaranteed approval: Funding depends on case strength.

5. Tips Before Considering a Settlement Advance

Ask about fees and repayment terms up front.
Compare multiple funding companies.
Only borrow what you truly need.
Talk with your attorney before signing anything.

The Bottom Line

A settlement advance can provide financial breathing room after a car accident, but it comes with trade-offs. It’s a tool best used carefully and with full understanding of the costs.

👉 If you’ve been injured in a car accident and are struggling financially while waiting for a settlement, fill out our quick questionnaire. FindLawFast will connect you with the guidance you need.

Disclaimer: This article is for general informational purposes only and should not be taken as legal or financial advice. Settlement funding rules and terms vary. Always consult with your attorney before pursuing pre-settlement funding.