Pre-settlement funding in Arkansas is extremely hard to get. The state’s constitutional cap on interest rates, combined with unresolved questions about how lawsuit advances are legally classified, has pushed nearly every major funding company out of the market. If you have a pending lawsuit in Arkansas and need cash before it settles, you face a much narrower set of options than plaintiffs in most other states.
Why Funders Won’t Operate in the State
The barrier is written into the Arkansas Constitution. Amendment 89, effective January 1, 2011, caps the maximum lawful interest rate on loans and contracts at 17% per year when a bank or government entity isn’t involved. The penalty for exceeding that cap is severe: a contract charging more than the maximum is void as to both principal and interest.1Justia Law. Arkansas Constitution Amendment 89 A funder who gets the math wrong doesn’t just lose the excess. It loses the entire advance.
Pre-settlement funding fees nationally run from about 27% to 60% or more on an annualized basis, with monthly compounding that can double or triple the repayment over the life of a case.2Nolo. Pros and Cons of Lawsuit Loans Those numbers sit well above Arkansas’s 17% ceiling, and the state’s courts have historically rejected attempts to work around the constitutional limit. The Arkansas Supreme Court previously struck down the state’s Check Cashers Act, finding that relabeling interest as “fees” didn’t exempt the charges from the constitutional cap.3Hudson Cook LLP. Does the Recent Earned Wage Access Law Change the Regulatory Environment in Arkansas
The industry’s usual legal defense is that a non-recourse advance isn’t a loan at all. Funders argue they are purchasing a slice of a possible future recovery, not lending money, and so usury laws shouldn’t apply.4Baker Street Funding. Legal Finance Companies vs Financial Institutions That argument has worked in several states. Arkansas is harder. Amendment 89 applies to “loans or contracts,” not just loans, and the 2024 Arkansas Code places “Consumer lawsuit lending” directly inside Title 4, Chapter 57, the Interest and Usury chapter.5Justia Law. Arkansas Code Title 4, Subtitle 5, Chapter 57 That placement signals the state treats lawsuit advances as something the usury rules reach, not as asset purchases sitting outside them.
National Funders That Have Confirmed They Won’t Serve Arkansas
Several of the largest pre-settlement funding companies state publicly that they do not operate in Arkansas:
- Oasis Financial tells applicants directly, “If you live in Arkansas… we’re not able to provide pre settlement funding at this time,” and blocks Arkansas residents from its online application.6Oasis Financial. State Specific Licenses
- USClaims says it does not provide pre-settlement funding in Arkansas “due to state laws and regulations.”7USClaims. States
- Silver Dollar Financial states it is “unable to offer pre-settlement funding for individuals in Arkansas.”8Silver Dollar Financial. Arkansas Pre-Settlement Funding
- High Rise Financial confirms it “does not currently provide funding or financial services in the state of Arkansas.”9High Rise Legal Funding. Lawsuit Loans Arkansas
- Mustang Litigation Funding lists Arkansas among states it does not fund, citing “varying regulations” and “pending licensing.”10Mustang Funding. States We Fund
One industry analysis concluded that Arkansas’s restrictions have “pushed away most (if not all) legal funding companies from providing services to plaintiffs in need” in the state.11Baker Street Funding. Lawsuit Funding Regulations
Is Lawsuit Funding Technically Legal in Arkansas?
Yes, in a limited sense. The Arkansas Supreme Court ruled in 1963 that a statute criminalizing champerty, the old common-law prohibition against third parties investing in someone else’s lawsuit, was unconstitutional.12IADC. Third Party Litigation Funding Analysis So litigation funding is not categorically outlawed. The practical obstacle is pricing. A funder who agrees to work within the 17% annual cap cannot charge the kind of fees that make the non-recourse model economically viable, and a funder who charges market rates risks voiding the entire contract. Legal in principle, unavailable in practice.
Arkansas lawmakers did try to build a regulatory framework. Senate Bill 216, introduced in 2011 as the “Lawsuit Lending Act,” would have set rules for written contracts, disclosures, a cancellation window, and caps on fee accumulation.13Arkansas Legislature. Amendment No. 1 to Senate Bill No. 216 There is no evidence the bill became law, and the continued refusal of major funders to serve the state indicates the underlying regulatory question was never resolved.
What You’re Missing, in Short
In states where pre-settlement funding is available, the process is quick. A plaintiff applies, the funder reviews the case with the plaintiff’s attorney, and approved applicants typically receive 10% to 20% of the expected settlement within 24 to 48 hours.14Annuity.org. Pre-Settlement Funding Credit and income usually don’t matter; the strength of the case does. The advance is non-recourse, so if the case loses, the plaintiff owes nothing.4Baker Street Funding. Legal Finance Companies vs Financial Institutions
The cost side is also worth knowing, because it explains why consumer advocates have mixed feelings about the product being unavailable. Fees of 2% to 4% per month, compounding, can leave a borrower in a long case owing double or triple the original advance, and after attorney fees and medical liens come out of the settlement, some plaintiffs end up with very little.2Nolo. Pros and Cons of Lawsuit Loans
Will Anything Change?
Several states have moved toward regulating pre-settlement funding rather than leaving it in a legal gray area, with new laws covering caps on recovery, plain-language contracts, and rescission periods.15The Milestone Foundation. State-Level Consumer Litigation Funding Regulation Expands in 2026 Federal proposals in 2025 and 2026 have targeted the industry too, including mandatory disclosure of funding agreements in federal cases and a proposed 41% tax on funders’ profits.2Nolo. Pros and Cons of Lawsuit Loans
None of this is likely to help an Arkansas plaintiff soon. The state’s barrier is constitutional, not statutory. A consumer-protective state law capping recovery at some percentage of a settlement does not answer the threshold question of whether the 17% annual interest ceiling applies to these transactions in the first place. Until the Arkansas legislature or the state’s courts resolve that question, pre-settlement funding will remain largely closed to Arkansas plaintiffs. If you need money before your case resolves, your realistic options are the ones available to anyone short on cash: talk to your attorney about advancing case costs or deferring certain expenses, work with medical providers on liens or payment plans, and look at traditional consumer credit sources that operate within Arkansas’s rate caps.