What is a litigation loan and who is it for?

If you are in court and awaiting a settlement, consider a pre-financing or litigation loan. Once you’ve filed a lawsuit there are companies like Lend money first which grants you an advance based on the expected severance payment.

It’s basically a cash advance on a pending legal case, not an actual loan. These cash advances are available to claimants filing a variety of lawsuits including:

• Accident

Unjust death

• Personal injury

• Product liability

• Medical malpractice

Various terms are used to describe this type of financing. It is often referred to as a litigation advance, litigation loan, litigation finance, or prepayment advance. The amount is based on the amount of money that you expect as part of your statement. So why take out such a loan?

Advantages of litigation loans

When plaintiffs wait for the judge to make a decision, getting money can be difficult, especially if they are injured and unable to work. These loans can provide welcome relief in the form of financial assistance for the provision of food, shelter, and other necessities during the legal process.

Also, when you’re financially secure, you’re less likely to accept a low offer just to get the case over with. No two cases are alike, but in almost every case a litigation loan gives you the time you need to negotiate a favorable settlement.

Fight against big insurance companies

It goes without saying that the defendant’s insurance company will do everything in its power to reduce your severance payment. Insurers can smell desperation so they may offer you a pathetic amount while knowing full well that you ought to be much more. Simply having money enables you to hold them back.

Most injury cases settle out of court. As the trial draws nearer and can refuse the defendant’s first offer of settlement, it becomes more likely that you will be offered a nice settlement so the defense can avoid an expensive lawsuit.


To qualify, you must first have a lawsuit pending. The first step is to hire an attorney to take legal action on your behalf. Lots of lawyers are working on one Contingency fee Base and agree to collect a percentage of the settlement once the case is closed. These legal fees are usually between 20% and 40% of the settlement and are deferred until after the negotiation or mediation period.

The attorney will put the details together so that the law firm representative can estimate a realistic settlement amount that will allow them to determine how much financial assistance they can offer you. Most loan professionals use a formula to work out a percentage of your expected return based on similar cases and the facts about your individual circumstances.

Get paid

How long it takes to get your settlement depends on whether the defendant’s insurance company or the debtor himself will pay. This also calls into question the financial situation of the defendant and its solvency as well as the negotiated conditions.

There is great uncertainty as to how long it will take to get a comparison. But that’s also why an advance loan is a good idea so that you can remain solvent while your legal dispute is still pending.

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