What lawsuit funding is and how it helps after a motorcycle accident

Lawsuit funding (also called litigation financing or settlement advances) is money a third-party company gives you while your motorcycle accident case is pending. You do not repay it unless you win or settle — if you lose, you owe nothing. The company takes a percentage of your settlement or judgment as repayment, typically 25 to 40 percent depending on how long the case takes and how risky the funder thinks it is.

This is different from a loan. A traditional loan requires monthly payments regardless of the case outcome. Lawsuit funding only comes due if you recover money. The funder bets on your case; if they think you will lose, they will not fund you.

After a motorcycle accident, you may face months or years before your case settles. Medical bills, lost wages, and repair costs do not wait. Lawsuit funding lets you cover those expenses without taking a personal loan or credit card debt that you would have to repay even if your case fails.

Key Takeaways

  • Lawsuit funding is non-recourse money — you repay it only if you win or settle your case, and the funder takes a percentage rather than fixed monthly payments.
  • Funding companies evaluate your case based on the strength of your claim, the defendant's ability to pay, and your medical evidence, not your personal credit score.
  • The process typically takes three to seven business days from process to funding, though some companies are faster.
  • You can receive funding while your case is still in negotiation or discovery, and you can use it for any expense — medical bills, rent, living costs, or attorney fees.
  • The percentage the funder takes ranges widely and depends on case length and perceived risk, so comparing offers from multiple companies is important.

How funding companies decide whether to fund your case

Lawsuit funding companies do not care about your credit score or employment history. They care about whether your motorcycle accident case is likely to result in a payout. They will ask your attorney for police reports, medical records, photos of vehicle damage, and details about the other driver's insurance coverage.

The funder looks at several things: whether liability is clear (did the other driver clearly cause the accident), how serious your injuries are (documented by medical records), whether the defendant or their insurer has money to pay a judgment, and how experienced your attorney is. A case where the other driver ran a red light and hit you, you have hospital records showing broken bones, and they carry $100,000 in insurance is a strong candidate for funding. A case where liability is disputed or your injuries are minor is riskier and may be declined or offered at a higher percentage.

You will need to sign a release allowing the funder to speak with your attorney. The funder will not contact the other side or interfere with settlement negotiations — they straightforward gather information to assess risk. This process usually takes two to five business days.

The process and approval timeline

Start by contacting a lawsuit funding company directly through their website or phone number. You will provide basic information: your name, the date of the accident, your attorney's name and contact information, and the state where the accident occurred. Some companies have an online form; others ask you to call.

Once you submit, the company contacts your attorney to request case documents. Your attorney does not have to agree — they can decline to participate, though most do because it helps their client. The funder reviews the documents, sometimes asks follow-up questions, and makes a decision within three to seven business days. If approved, they send you a contract spelling out the percentage they will take and the terms of repayment.

You review the contract with your attorney before signing. Once signed, the funder typically deposits money into your bank account within one to three business days. The entire process from process to cash in hand usually takes one to two weeks, though some companies advertise faster turnaround.

What you can use the money for

There are no restrictions on how you spend lawsuit funding. You can use it for medical bills, physical therapy, rent or mortgage payments, car payments, groceries, utilities, or any other living expense. Some people use it to pay their attorney's fees if they have agreed to a flat fee rather than a contingency arrangement. Others use it to cover lost wages while they recover from injuries.

The funder does not monitor your spending or require you to account for where the money goes. Once it is in your account, it is yours to use as you see fit. This flexibility is one reason people choose lawsuit funding over personal loans — you are not restricted to a specific purpose.

Understanding the cost and comparing offers

The percentage a funder takes varies based on how long your case takes and how risky they think it is. A case that settles in three months might cost you 25 percent. A case that goes to trial and takes two years might cost 40 percent or more. Some companies charge a flat percentage; others charge a percentage that increases the longer the case drags on, incentivizing faster settlement.

Before accepting an offer, get quotes from at least two or three funding companies. The difference between a 25 percent and 35 percent fee on a $50,000 settlement is $5,000 — money worth shopping for. Ask each company to explain exactly when their percentage kicks in (some charge from the date you receive funding; others charge from the date you sign the contract) and whether the percentage changes if the case goes to trial.

Your attorney may have relationships with specific funding companies and can help you understand whether an offer is reasonable for your type of case. They have seen many cases settle and know what percentage is typical. Use that knowledge, but make your own decision — the funder's percentage directly affects how much money you keep.

What happens when your case settles

When your case settles or you win a judgment, your attorney notifies the funding company. The funder calculates what they are owed (their percentage of the settlement) and sends a payoff letter to your attorney. Your attorney deducts the funder's percentage from your settlement check and sends you the remainder.

If your settlement is $100,000 and the funder's percentage is 30 percent, they receive $30,000 and you receive $70,000 (minus your attorney's fee, which is separate). The funder is paid before you are, but only from the money you actually recover. If you settle for less than expected, the funder's percentage is calculated on the actual settlement amount, not the amount you originally hoped for.

If your case is dismissed or you lose at trial, you owe the funder nothing. This is the non-recourse part of the agreement — your obligation to repay ends if there is no recovery. The funder absorbs the loss.

Risks and limitations to consider

Lawsuit funding is expensive. A 30 to 40 percent fee is significantly higher than the interest you would pay on a personal loan or credit card, even accounting for the fact that you only pay if you win. If your case takes longer than expected, the percentage may increase, further reducing your net recovery.

Funding can also create pressure to settle. If you have received $10,000 in lawsuit funding and your case is dragging on, you may feel tempted to accept a lower settlement just to resolve the case and repay the funder. Your attorney should advise you on whether a settlement offer is fair, independent of your funding situation.

Not all cases are fundable. If your injuries are minor, liability is unclear, or the defendant has no insurance and limited assets, funding companies will decline. You cannot force a company to fund your case, and rejection does not mean your case is weak — it may straightforward mean the funder sees too much risk.

Alternatives to lawsuit funding

If lawsuit funding is not available or the percentage is too high, consider other options. Some attorneys will advance costs (medical records, informed reports, court fees) out of their own pocket, repaying themselves from your settlement. Ask your attorney whether they do this.

Personal loans from banks or credit unions typically charge lower interest than lawsuit funding, but they require monthly payments regardless of your case outcome. Credit cards offer flexibility but charge high interest rates. Family loans are interest-free but can strain relationships.

Some states have victim information programs that help with medical bills or lost wages after an accident. Your state's attorney general's office or local bar association can point you toward programs in your area. These are usually limited to serious injuries or specific circumstances, but they are worth exploring before committing to expensive lawsuit funding.

Frequently Asked Questions

Can I get lawsuit funding if I am still in the hospital or early in recovery?

Yes. Funding companies will fund cases at any stage, from when ready after the accident through trial. Early funding can help you cover medical bills and living expenses while you recover. The funder's percentage may be higher for cases that are very early because the outcome is less certain, but you can still obtain funding.

What if my attorney does not want to participate with a funding company?

You cannot force your attorney to cooperate with a funder. Some attorneys have concerns about funding or prefer to work with specific companies. If your attorney refuses, ask why and whether they would be willing to work with a different funder. If they still decline, you may need to decide whether to find a new attorney or pursue other funding options.

Does getting lawsuit funding affect my settlement negotiations?

Not directly. The funding company does not contact the other side or interfere with settlement talks. However, if you have received funding, you know you have a financial cushion, which may affect your willingness to accept or reject an offer. Your attorney should help you evaluate settlement offers based on the merits of your case, not on your funding situation.

What if I receive a settlement offer before my funding is approved?

You can accept a settlement at any time, even if you have applied for funding but not yet received it. If you settle before funding is approved, the funder will cancel your process and you will owe nothing. If you settle after funding is approved, the funder takes their percentage from the settlement.

Are there any states where lawsuit funding is not available?

Lawsuit funding is available in most states, but some states have restrictions on how much a funder can charge or require specific disclosures. A few states have considered banning the practice. Ask your attorney whether lawsuit funding is regulated in your state and whether there are limits on what a funder can charge.