Pre-Settlement Funding Defined


Can you imagine paying $23,588 to borrow $9,150? Sounds ridiculous, doesn’t it? But this is exactly the situation faced by Larry Long, detailed in a New York Times article. Long ran out of money while waiting on a settlement from a class-action suit against a drug company whose product left him debilitated and borrowed against his expected payout in a pre-settlement funding deal with Oasis Legal Finance.

While the pre-settlement funding helped Long overcome his immediate financial need, what he didn’t count on was the financial hardship he would face in the long-term due to this decision made in a time of crisis. By the time Long received his initial settlement of $27,000, he owed almost 90% of it to Oasis Legal Finance.

Long’s case is not an anomaly. The attraction of pre-settlement funding is that it provides immediate financial relief to those in the most vulnerable of positions. Many recipients of pre-settlement funding are waiting on claims in settlement cases for injuries that prevent them from returning to work, resulting in an immediate loss of income. As court cases drag on, bills continue to pile up while bank accounts quickly drain. From the outset, it’s easy to see how pre-settlement funding can appear as an attractive option to those in dire financial need, but what many people fail to consider – and many pre-settlement funding firms fail to adequately disclose – is how much this immediate relief will actually cost in the long run.

Pre-Settlement Funding vs. Selling a Structured Settlement

The difference between pre-settlement funding and selling a structured settlement is that recipients of pre-settlement funding have not yet been awarded the money they are seeking in their lawsuits while selling a structured settlement involves money that has been awarded and is owed to the recipient. A question you may be asking is, what happens if the lawsuit doesn’t end in the recipient’s favor? The answer is that they don’t have to pay back the money borrowed. It is the essential difference that pre-settlement funding companies capitalize on to charge large, and often exorbitant, rates to their customers.

Pre-settlement funding companies view themselves as different from lenders, and therefore exempt from the rules governing the lending industry. Instead, these companies consider themselves more as venture capitalist firms, ‘investing’ in what may or may not turn out to be a profitable endeavor. It is due to this risk of non-payment that the fees charged by pre-settlement funding companies are so high and people like Larry Long end up paying out much more than they bargained for.

Selling a structured settlement is different – you will never end up paying more as the money is yours and once you receive it there is no further obligation. You can use the money to address your immediate financial obligations and sleep easy knowing the decision won’t put you in a worse off situation down the road. At, we work with you and consider your individual situation to ensure you receive the most money for selling your structured settlement and that the decision you make is in your best interest.

Pre-Settlement High Interest Rates

As pre-settlement funding companies don’t get paid unless their customers win, their main priority is maximizing payouts through extremely high interest rates. At, our priority is you – our customer. There is no risk/reward payoff. Our business model is to help people – just like you – improve their lives by having money that rightfully belongs to them available when they need it. When selling your structured settlement with, you’ll get exactly what you’re promised and our helpful customer service representatives will work with you through the process to ensure you have all the information you need to make the best decision for you.

If you’re considering pre-settlement funding, take some time to consider the impact that decision can have in the long run. Is receiving $10,000 today really worth owing $36,000 in two years? Have you exhausted all other avenues of obtaining funds? While borrowing from friends and family or taking out a loan as you wait for your settlement may seem embarrassing or inconvenient, consider the detrimental effects of pre-settlement funding on your long-term financial viability. By the time your settlement arrives, you may end up owing most or all of it to the funding company. Waiting for your structured settlement will put more money in your pocket and provide financial security for the future.

If you’re involved in a lawsuit or have received a structured settlement and have an immediate financial need, call or email today and speak with a qualified customer service representative about your particular situation and the best options available. You can also request a quote to see just how much your structured settlement is worth. You can rest assured the information you receive will be honest, informative, and always in your best interest.

Call 800.543.6513 or request a quote today. Take the first step toward a better life!