If you're considering pre-settlement funding, one of the most important decisions you'll make is determining how much money you actually need. While pre-settlement funding can offer critical financial support during a lawsuit, borrowing more than necessary can lead to higher repayment amounts and unnecessary financial stress.

In this article, we’ll walk you through how to calculate the right amount of funding to request—so you get the support you need without overextending your future settlement.

1. Understand What Pre-Settlement Funding Is

Pre-settlement funding is a cash advance against your expected lawsuit settlement. It’s non-recourse, meaning you only repay if you win or settle your case. That said, you’ll still need to repay the advance plus fees or interest, so it's important to borrow conservatively.

2. Identify Your Immediate and Essential Needs

Start by listing your current, unavoidable expenses. This might include:

• Rent or mortgage payments

• Utility bills

• Groceries and household essentials

• Medical bills and prescriptions

• Transportation costs

• Childcare or school expenses

Tip: Focus on the basics. Pre-settlement funding is best used for essential needs, not large discretionary purchases.

3. Consider the Duration of Your Case

Ask your attorney for a realistic timeline of how long your case might take to resolve. Multiply your monthly expenses by the estimated number of months your case could last to estimate your total funding needs.

Formula:

Estimated Monthly Expenses x Expected Case Duration (Months) = Suggested Funding Amount

Example: If you spend $2,000 per month and your case may take 6 months to resolve, consider requesting around $12,000.

4. Review Any Existing Financial Resources

Before finalizing your funding amount, take inventory of any other financial resources you have:

• Savings or emergency funds

• Disability or workers’ compensation benefits

• Support from family or community resources

Subtract these resources from your total estimated need to avoid borrowing more than necessary.

Adjusted Formula:

(Total Estimated Need - Other Financial Resources) = Final Funding Request

5. Account for Interest and Fees

Every dollar you borrow will need to be repaid—plus interest and fees. Even though pre-settlement funding is non-recourse, borrowing more than necessary can significantly reduce your net settlement.

Tip: Choose a provider that offers:**

• Simple interest instead of compound interest

• Capped fees to avoid ballooning debt

• Transparent terms with no hidden charges

6. Speak with Your Attorney

Always consult with your attorney before finalizing your funding request. They can help you:

• Assess whether the amount you’re considering is appropriate

• Review the funding agreement for fairness and clarity

• Ensure your case value can support the requested funding

7. Request the Minimum You Need—You Can Always Request More Later

It’s better to start with a smaller funding amount and request more if your situation changes. Many funding companies allow you to apply for additional advances if necessary.

Why This Matters:

• Helps minimize repayment obligations

• Preserves more of your final settlement

• Reduces the overall cost of borrowing

Final Thoughts

Pre-settlement funding can be a helpful tool during litigation—but only when used wisely. By carefully calculating your funding needs based on essential expenses, case duration, and available resources, you can request just the right amount to stay financially stable without sacrificing your future settlement.

Need Help Calculating the Right Funding Amount? We’re here to guide you every step of the way. Contact us today to speak with a pre-settlement funding specialist who can help you estimate your needs and secure fair, transparent funding tailored to your case.