A lawsuit loan or settlement loan is not a traditional loan, but rather a cash advance. Pre-settlement funding is a more accurate descriptor.
This form of financing occurs when the plaintiff in a personal injury settlement or other lawsuit is advanced money in exchange for a portion of the expected settlement.
As a non-recourse financial product, there is no credit check, income proof, or employment verification required when applying for a lawsuit loan. As such, the process is much quicker than when applying for a car loan or a home mortgage loan.
The two parties in any lawsuit loan transaction are the plaintiff of the case and a litigation funding company.
As the plaintiff, you must have a legitimate claim, and you must have legal representation. Most people hire counsel on a contingency fee retainer.
The lawsuit lending company is a financial enterprise specializing in this form of financing. They are highly skilled at evaluating pending claims and lawsuits so they can effectively deploy their capital, recouping investments and turning a profit while at the same time supplying those in financial need with funds on-demand.
If you win your case, you repay the advance plus interest and additional charges. If you lose your case, you repay nothing.
So, how long does it take to get a lawsuit loan, then?
Well, that depends on many variables, and we’ll break those down for you today. The better you understand the process, the less frustrated you should feel.
What Factors Influence the Timescale of Obtaining a Lawsuit Loan?
The underlying process of obtaining a lawsuit loan is straightforward, as long as your application is pre-qualified. This means it satisfies the basic requirements of a civil case and also assumes you have a lawyer retained on a contingency fee basis.
If these conditions are met, the process unfolds as follows:
- Your data is punched into the system
- Request for documentation is sent to your attorney
- These documents are received then reviewed by your attorney
- The merits of the case are discussed over a brief conference call with legal counsel
- If the application is approved, a contract is drafted then sent to the loan applicant
- The client and attorney sign the document. The document is returned
- The case can then be funded
Any delays in the above process are usually down to the availability of your attorney.
Lawsuit funding companies are evaluating cases like yours all day, every day. Your attorney, on the other hand, will be busy practicing law. They may not always be available to promptly return documents or conduct phone conferences.
Beyond this, not all cases qualify for legal funding in the first place.
Some Cases Do Not Qualify for Lawsuit Loans
You will find most lawsuit funding companies fund the following cases:
- Personal injury cases (auto accidents, slip-and-fall funding, premises liability)
- Product liability cases for defective products
- Legal or medical malpractice where professional negligence triggered damages
- Medical device cases
- Employment law cases
- Commercial litigation cases
Lawsuit loan companies do not typically advance funds on any of the following:
- Social security disability claims
- Wage disputes
- Landlord tenant actions
- Collections cases
Other Variables Impacting How Long It Takes to Obtain Pre-Settlement Funding
Some other variables like the availability of certain documents can also influence the overall timescale for obtaining a lawsuit loan. If there are complications with police reports, medical records, or insurance information in an auto accident case, this can delay the process. Other types of case call for different documentation.
Fortunately for consumers, legal funding companies strive for maximum efficiency.
Any lawsuit loan application that drags on is often down to delays in obtaining documentation, or delays in scheduling conference calls between two busy parties.
Occasionally, delays occur with the execution of the funding documents in the form of a contract. This process should be seamless but that is not always the case.
What Is the Average Timescale for a Lawsuit Loan?
While there is no fixed timescale for a lawsuit loan, most take between a few hours to a few days from application to receiving funds.
Same-day legal funding is commonplace, although this hinges on good communication and rapid responses from your legal counsel.
Most lawsuit loans should take no more than a few hours to process once documents are sent to the funding company from your law office.
Once you’re approved for funding, there are several nearly instant ways to receive your funding, ranging from Western Union to direct deposit or wire transfer.
Your law office collecting and sending the requested information is usually the most time-consuming component of the application process for legal funding.
Luckily, once you get the process underway, you should be a day or two away from receiving the funding you need, for any purpose and completely risk-free.