How to Get Settlement Loans for Workers Comp

When you get injured on the job, you are entitled to workers’ compensation. But this doesn’t mean you’ll receive your benefits the day after your claim. In some cases, it can take weeks. But most of the time, it involves a lengthy legal battle that may take years.

While you’re fighting for your benefits and recuperating from your injuries, you’ll most likely miss work. No work means no income. But your bills and mortgages won’t stop just because you’re not working. Plus now, you’ll have medical bills to worry about too. With no money coming in, it can be very hard to make ends meet.

This is a dilemma most injured workers are familiar with. That’s why many are tempted to settle for a much lower compensation amount just to avoid a lengthy court process. Some have even resorted to loan sharks just to avoid sleeping on the streets.

But unknown to many, there’s a much better option. If qualified, you can get a settlement loan for your workers’ comp benefits.

What is a Settlement Loan for Workers Comp?

In a nutshell, a settlement loan is a cash advance in anticipation of benefits. It’s also known as litigation financing or settlement funding. It can apply to many types of benefits but in this case, it refers specifically to workers’ compensation.

If you have an existing workers comp claim, some lending companies will let you take out a loan on it. Once your benefits are settled, the amount plus the interest will be deducted from your payment. Most companies also offer a no-risk loan. Meaning, if you lose your claim, you won’t have to pay anything.

Interest rates for settlement loans run from 2% to 4% per month. While this may sound reasonable, that could easily translate anywhere from 24% to 48% per year. If your workers’ comp case takes years, you may end up paying double or triple what you originally owe.

Still, settlement loans are a huge help if you’re strapped for cash while waiting for your first benefit check.

Workers compensation claim form.

How Much Settlement Loan Can You Get?

Obviously, you can’t take out a settlement loan in the full amount of your benefits. Besides, benefit amounts can vary significantly. So there’s really no way of knowing how much you’re going to get until after it’s approved. This means that your settlement loan can vary too.

Most companies offer anywhere from $500 to as much as $250,000. But in general, how much you’ll get depends on factors like:

1. Your state

Workers comp laws vary per state as are the lawsuit funding regulations. So most lending companies adhere to a sort of scale that rates each state based on the ease of getting settlement loans. States like Florida are generally rated high because it’s much easier to get benefits here than in others.

2. Your disability

The severity of your disability will determine how much you’re going to get. Naturally, this will also affect how much loan you can take out on your benefits.

3. The nature of your injury

For an injured worker to qualify for workers comp, they must prove that their injury is work-related. In some states, you’ll also have to prove that the injury is due to the negligence of your employer. So if there’s some doubt as to how your injury happened or who’s at fault, they might be less willing to lend you a huge amount.

Will You Qualify For a Settlement Loan?

Since payment for settlement loans depends primarily on you winning your claim, your eligibility also depends on the likelihood of that happening. The specifics vary per lending company but in general, you can get a loan if:

  • you have a pending workers’ comp claim;
  • your injury is work-related;
  • you have a workers comp attorney handling your case (having one increases your chance of getting the benefits you deserve);
  • you’re of legal age;
  • your state allows settlement loans

Some companies may also check your claims history. But as a rule of thumb, the stronger your claim is, the more likely you are to get approved for a loan.

How to Apply for Settlement Loans

First and foremost, you need to check if your state allows settlement loans. If it does, look for settlement loan companies in your area. In some states, they’re also called settlement funders. There are a lot of them around you’ll usually have a handful to choose from.

Once you’ve found a settlement funder, an agent will be assigned to you. They’ll then review your case and how likely you’ll get benefits. Most of the time, they’ll talk with your workers’ comp lawyer to assess your chances. If approved, you’ll usually have the funds in your account within 24 hours.


Victor Malca Law has over 25 years of litigation experience, we are the most trusted workers’ compensation lawyers in Florida. Our area of expertise is in representing injured workers on compensation benefit cases and disabled individuals claim social security disability benefits.

Our unwavering advocacy for employee rights and privileges are also recognized by our peers. Book a free consultation today.

Judy Ponio is a writer for Victor Malca LawAbout The Author

Judy Ponio is a writer for Victor Malca Law P.A. and enjoys helping people with questions about social security, workers compensation, and other serious matters involving people’s livelihood. She is not an attorney and her writing should not be considered legal advice.

Leave a comment