Legal Funding Explained

Questions About Legal Funding? We’ve Got Answers.

If you’ve found yourself researching legal funding you’ve probably have loads of questions. That’s why we put together this comprehensive guide to legal funding to answer frequently asked questions and more. Still have questions or ready to move forward? We’re here for you: call 888-99-SHIELD.

Here’s What We’ll Cover.

Have a specific question? Click on the link below to jump right to it.

We’ll Start With the Basics. What Is Legal Funding?

Legal funding is a process through which clients and/or attorneys can be advanced money on their potential settlement through a third-party financing company. This is also known as litigation financing, professional funding, settlement funding, third-party funding, and legal financing. ↑ Top

Who Can Use Legal Funding? And For What?

Legal funding is available to both clients and attorneys. There is no restriction on how the client can use this money! It can be allocated toward any financial expenses during or after the legal process.

Clients can utilize legal funding to:

  • Cover day-to-day expenses after being involved in an accident or experiencing a physical or emotional hardship while awaiting a settlement award.
  • Pay their cost-of-living bills even after the claim settles while they wait for their post-settlement check to arrive.

Attorneys can utilize legal funding to:

  • Fund case costs including expert reports & witnesses
  • Take an advance on a potential fee before the claim is settled.
  • Receive payment after settling a case while they wait for their post-settlement check to arrive.

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What Cases Are Eligible For Legal Funding?

Typically, legal funding is meant to assist accident victims who have been hurt by no fault of their own and their attorneys. Shield Legal Funding is proud to assist those involved in the following case types: Motor Vehicle Accidents, Product Defects, Medical Malpractice, Construction Accidents, Dog Bites, Slip and Fall Accidents, Civil Rights, Whistleblower/Qui Tam, Worker’s Compensation/Workplace Injury, and more.↑ Top

How Is Legal Funding Different From A Loan?

Legal funding is NOT a loan! Legal funding is a non-recourse cash advance in exchange for a portion of the settlement. However, if the case is lost, the client is not required to pay the cash advance back to the third-party funder. A loan, on the other hand, always requires repayment.

Banks require a credit check before loan approval, which could pose as a difficulty for the client. Shield Legal Funding does not perform credit checks.

Loans also require monthly payments, which typically start immediately after the loan is finalized. Shield Legal Funding only requires payment if & when the case is settles.↑ Top

How Does Legal Funding Work?

The legal funding company purchases a portion of the client’s potential settlement (plaintiff) or legal fees/costs (attorney) and advances that money to them. Because personal injury claims typically take 18-24 months to settle and other litigation processes can take even longer, legal funding allows the client or attorney to immediately access some of their potential settlement funding.

Once the application is approved, paperwork with the terms if the advance and interest schedule must be signed by all parties. Then, the money is disbursed. There is no restriction on how the money can be used! It can be allocated toward any financial strains experienced during the legal process. The attorney repays the advance after the legal process is over, only if a settlement has been awarded.

A Few Examples…
Client: Bob was injured in a car accident. He is unable to work and is lacking money to pay his rent and other bills. He does not have the collateral or a quality credit score to be able to apply for a bank loan and is awaiting settlement in his claim. He applied for legal funding and was awarded a cash advance for a portion of his predicted settlement. He now has the money to pay for his day-to-day activities while waiting for his legal settlement and does not have to settle prematurely for less than is claim is worth.

Attorney: Mary is an attorney who just settled her client’s claim! However, the settlement proceeds have not yet been disbursed by the insurance company. She needs money now to pay for rent and other business-related expenses to be able to continue helping future clients. Through legal funding, Mary was able to receive a portion of her legal fees upfront and continue operating her business while waiting for payment.↑ Top

What’s The Difference Between Pre-Settlement and Post-Settlement Funding?

For Pre-Settlement Funding: A legal funding company can provide financial assistance for any out-of-pocket expenses during your pending claim while you wait for settlement. With money to cover your bills, you don’t have to feel pressured to settle for less than you deserve due to lack of cash.

For Post-Settlement Funding: If you’ve won your case and are awaiting the settlement check, Shield Legal Funding can provide an advance while the money moves from the insurance company to your attorney’s trust account. ↑ Top

How Much Money Can I Receive?

For Pre-Settlement Funding: How much money you can receive from legal funding depends on your individual claim. Our underwriters and funding experts will review your application and determine a case value based on expertise and experience in the personal injury field. Then, they will offer you a portion of your expected settlement.

For Post-Settlement Funding: Since you’ve already won your case and know the settlement money that you are due, post-settlement funding is a simpler process. Our funding experts will discuss your needs with you and offer you a portion of your settlement to keep you afloat while you wait for your check to come through. ↑ Top

What If I Lose My Case?

No problem. Since legal funding is NOT a loan and is instead a cash advance in exchange for a portion of the settlement, the client is not required to pay back any of the money received or interest if they lose their case.
Yep, it’s that simple: Our funding experts carefully analyze each application and case they receive and only accept those that they believe has a strong chance of success. If we’re wrong and you lose your case, then you don’t have to pay back the funds received from us. ↑ Top

Are There Any Risks Involved In Accepting Legal Funding?

We understand that challenging times may hurt your credit, that’s why we don’t require a credit check. Plus, since our funding solutions are NOT a loan, you don’t have to worry about digging yourself into debt. However, interest does accrue on the money advanced so if the claim is prolonged, the balance will grow, but remember: the client is not required to pay back any of the money received if they lose their case.↑ Top

Why Should I Consider Legal Funding?

  • Legal funding provides you with the funds and peace of mind to fully settle your claim. No more settling for less money because of lack of time or money to go through the entire legal process. We want to empower your case and protect your lifestyle!
  • Unlike a loan, you make no payments if you do not receive a settlement or verdict. There are also no payments due until a settlement is awarded. Your attorney pays back the advance out of the settlement proceeds.
  • There is no restriction on the use of the money. You can use it for any of your financial needs, such as groceries, rent, utility bills, etc.
  • The process is fast and easy. Get cash in hand within 48 hours!

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Having to go through the legal process is tough enough without being saddled with financial stress. We alleviate the financial burden while your case is being settled. Plus, with no monthly payments to worry about, you can freely focus on your case without worrying about where the money is going to come from. The wheels of justice tend to turn slowly, fast and efficient funding is the solution attorneys and their clients are looking for! ↑ Top


Shield Legal helped me pay my bills so I could receive a fair settlement after
I was hurt in a car accident.