Plaintiff legal funding is money a third-party company lends to you during a lawsuit, betting that you will win and repay them from your settlement or judgment
The company does not care whether you work, have good credit, or can afford a lawyer — they care only about your case. They review your lawsuit, estimate the odds and the likely payout, and decide whether to fund you. If they say yes, you get cash now. If you lose or settle for less than they lent you, you typically owe nothing. If you win, they take a cut of your recovery — usually 25 to 50 percent of what they gave you, though the exact terms vary by company and case.
This is not a loan in the traditional sense. You do not make monthly payments, and there is no credit check. It is a bet on your case. The company fronts money and takes the risk that you will not recover enough to repay them.
Key Takeaways
- Plaintiff funding companies lend money during a lawsuit and are repaid only if you win or settle; if you lose, you owe them nothing.
- The company takes a percentage of your recovery — typically 25 to 50 percent of the amount they lent you — as their fee.
- Funding can take one to three weeks to arrive after approval, and you can use it for any expense: living costs, medical bills, lawyer fees, or anything else.
- Not all cases may have access to; companies focus on personal injury, medical malpractice, employment disputes, and other cases with clear damages and a reasonable settlement range.
- You keep control of your case and settlement decisions; the funder cannot force you to settle or accept an offer.
How the money works and what it costs
When a funding company approves your case, they send you a lump sum — anywhere from a few hundred dollars to tens of thousands, depending on the case strength and your need. You can spend it on rent, medical care, lost wages, or anything else. There are no restrictions on how you use it.
The cost is built into the repayment. If the funder lent you $5,000 and takes a 40 percent fee, they will want $7,000 back from your settlement. The exact percentage depends on how long your case takes, how risky the company thinks it is, and how much you borrowed. Longer cases and riskier cases cost more. Some companies charge a flat percentage; others charge a percentage that grows over time.
If your case settles for $50,000 and you owe the funder $7,000, you receive $43,000 after they are paid. Your lawyer's fee (usually 33 percent of the gross settlement) comes out separately, so the math can get complicated. Before you accept any settlement, ask your lawyer to show you the math: gross amount, minus lawyer fee, minus funder repayment, equals what you take home.
What types of cases may have access to
Funding companies focus on cases where damages are clear and the settlement range is predictable. Personal injury cases — car accidents, slip-and-fall, workplace injuries — are the easiest to fund. Medical malpractice, product liability, and employment disputes (wrongful termination, discrimination) also may have access to regularly.
Cases that are harder to fund include criminal defense (because there is no money judgment to repay from), family law (divorce, custody), and cases where liability is unclear or damages are hard to estimate. Some companies will fund contract disputes or business litigation if the numbers are solid, but most focus on personal injury.
The company will ask for your case documents: the complaint, police report or incident details, medical records, and your lawyer's assessment of the case value. They may hire their own investigator or consult with a lawyer to evaluate the strength. This review usually takes one to two weeks.
The process and approval timeline
You start by contacting a funding company directly or through your lawyer. Many lawyers have relationships with one or two funders and can refer you. You fill out a form with basic case information and sign a release allowing the funder to speak with your lawyer.
The funder then contacts your lawyer, reviews the case file, and makes a decision. This stage takes five to fourteen days depending on how busy they are and how complex your case is. If they approve you, they send the money within one to three business days — usually by wire transfer or check.
There is no credit check, no income verification, and no employment history required. The only thing that matters is the case itself. If the case looks weak or the potential recovery is too small, they will decline. Some companies will decline and suggest you reapply later if new evidence emerges or liability becomes clearer.
When plaintiff funding makes sense
Funding is most useful when you are injured, out of work, and facing bills while your case moves slowly through the system. A car accident case can take one to three years to resolve. If you cannot work and have no savings, the stress of waiting can push you to settle for less than the case is worth — or to drop the case entirely. Funding removes that pressure.
It also helps when your lawyer needs you to turn down a quick low offer. If an insurance company offers $15,000 to settle when ready and your lawyer thinks the case is worth $50,000, funding can keep you afloat while you wait for a better offer.
Funding makes less sense if your case will resolve quickly, if you have other income or savings, or if the funder's percentage will eat up most of your recovery. If you are only borrowing $2,000 and the funder takes 40 percent, you are paying $800 for the use of that money — which is expensive. Run the math with your lawyer before you commit.
What you keep control of and what you don't
You control whether to settle and on what terms. The funder cannot force you to accept an offer, even if they think you should. They cannot direct your lawyer or tell you how to run your case. Their only leverage is that if you lose, they lose their money — so they have an incentive to fund cases they think will win, but no legal power over the outcome.
You do have to repay them from your recovery. If you settle, the funder's repayment comes out before you see the money. If you win at trial, the same rule applies. The settlement or judgment check usually goes to your lawyer's trust account, and your lawyer coordinates with the funder to make sure everyone is paid in the right order.
Some funding agreements include a clause that you cannot settle without the funder's consent, or that the funder has to approve any settlement over a certain amount. Read the contract carefully. These clauses are less common than they used to be, but they exist. If the contract says the funder can block a settlement, that is a red flag — it means they have power over your case that you may not want them to have.
Risks and things to watch for
The main risk is that you lose your case and owe the funder nothing, but you have spent the money and have no recovery to show for it. If you borrowed $10,000 and lost, you keep the $10,000 you spent but have no settlement to cover your losses. This is why funding companies are careful about which cases they fund — they lose money if you lose.
Another risk is that the funder's percentage is so high that your net recovery is small. If you settle for $40,000, your lawyer takes 33 percent ($13,200), and the funder takes 40 percent of $15,000 ($6,000), you are left with $20,800. That is still money you would not have had, but it is less than half the gross settlement. Before you borrow, ask the funder for a written quote showing exactly what percentage they will charge and how long it applies.
Watch for companies that charge fees on top of the percentage, or that charge interest if your case takes longer than expected. Some funders charge a monthly fee or a "case management" fee in addition to their percentage. These are rare but they exist. Get everything in writing and have your lawyer review the contract before you sign.
Alternatives to plaintiff funding
If you need money during a lawsuit, you have other options. Some lawyers will advance costs (filing fees, informed witness fees, medical records) without charging interest, though they will want repayment from your settlement. This is cheaper than funding because there is no percentage fee — you just repay what they spent.
You can also look for a lawyer who works on contingency and will wait for payment until you settle or win. Most personal injury lawyers already do this, so if you have a lawyer, you may not need funding at all. The lawyer's fee (usually 33 percent) is your only cost.
If you need money for living expenses, not case costs, you might look for other sources: unemployment benefits, disability benefits, family loans, or a personal line of credit. These are not always available, but they are worth exploring before you commit to paying a funder 25 to 50 percent of your recovery.
Frequently Asked Questions
Can I get plaintiff funding if I do not have a lawyer yet?
Most funding companies require you to have a lawyer before they will fund your case. They need someone to review the file and confirm the case details. If you do not have a lawyer, some companies will refer you to one, or you can find one yourself and then explore for funding.
What happens if I settle for less than the funder lent me?
You still owe the funder their percentage of what they lent you, not a percentage of the settlement. If they lent you $10,000 at 40 percent and you settle for $8,000, you owe them $4,000 (40 percent of $10,000). Your lawyer will make sure the math is right and that the funder is paid from the settlement proceeds.
Can the funder take money from me if I lose the case?
No. Plaintiff funding is non-recourse, which means if you lose, the funder absorbs the loss. You owe them nothing. This is why they are selective about which cases they fund — they only fund cases they think will win.
How long does the money stay available if I do not use it all?
That depends on your contract. Some funders let you keep unused money indefinitely; others require you to return it or charge interest on it. Read the contract to see what it says about unused funds. If it is unclear, ask the funder in writing before you accept the money.
Does getting plaintiff funding affect my credit score?
No. Plaintiff funding is not a traditional loan, so it does not appear on your credit report and does not affect your credit score. There is no credit check, and the funder does not report to credit bureaus.