A pre-settlement advance funding comes as a form of a non-recourse cash advance. It is given to an injured person given that he or she will repay the amount as soon as the case has been resolved or settled.

This settlement funding is classified as a "non-recourse" funding, the injured person is not bound to pay the advance given should he or she gets unsuccessful in the lawsuit. However, he or she may be asked to pay a portion of the amount in the event that the settlement is smaller than hoped.

Non-recourse funding can get very risky that is why most of the time, the fees associated with pre-settlement advance are significantly high. If you are thinking of applying for a pre-settlement funding, make sure that you consider carefully the different legal, ethical and practical issues that go with it.

Usually, an injured person calls a company that offers pre-settlement funding (most of the time) under a suggestion of the lawyer. The finance officer of that company then contacts the lawyer in charge of the case and asks for certain information about the case. Based on that information, the financing company then estimates the most reasonable value of a likely settlement or verdict.

The financing company will give a pre-settlement advance offer to the injured person, based on the estimates. The corresponding fee may be flat, or it may be broken down to a monthly basis like a loan. The moment the case is resolved or when the defendant pays for losing the case, the loan and the fees will be paid to the finance company.

The injured person is free of the paying obligation if the lawsuit is unsuccessful - this is one of the perks of having the settlement funding being counted as a form of non-recourse funding. If the total value of the settlement is less than what was anticipated, the injured person might be asked to pay a portion of the amount but not more than what he or she received. And because of this risk and for other legal purposes, a pre-settlement cash advance is not classified as loans.

Having this type of funding is beneficial especially if the injured person does not have much. Although the attorney pays for everything during the entire litigation process, the injured person will still need some money to sustain for his or her personal needs.

If the injured person is unable to find work because of his or her condition, or has fees to pay associated with the injury, waiting for the court's decision and for the settlement or verdict money is not a very good option.