Imagine you run a 12-person contracting business in Atlanta. A commercial tenant stiffed you on a $180,000 buildout, and a litigation funder offers to cover your legal fees in exchange for a cut of any judgment. A year ago, that deal would have closed quietly, on whatever terms the funder wrote into a contract you might not have fully understood. As of January 1, 2026, it doesn't work that way anymore — at least not in Georgia.
Senate Bill 69, the Georgia Courts Access and Consumer Protection Act, rewired the rules for third-party litigation funding (TPLF) in the state. If you're a small business owner weighing whether to accept outside money to bankroll a lawsuit, the law changes what you can expect from a funder, what shows up in discovery, and who's allowed to fund you in the first place.
What Third-Party Litigation Funding Actually Is
Litigation funding is when an outside investor — not a party to the lawsuit, not your attorney — pays some or all of your legal costs in exchange for a percentage of any settlement or judgment. If you win, the funder gets paid from your recovery. If you lose, in most arrangements, you owe the funder nothing (though SB 69 changes that assumption for larger deals — more on that below).
It's become a real industry. Commercial litigation funding is now a multibillion-dollar market in the U.S., and it isn't just Fortune 500 companies suing each other over patents. Small businesses use it too — a supplier with a breach-of-contract claim against a bigger customer, a franchisee fighting a terminated agreement, a manufacturer chasing a defective-parts case. If cash flow is tight and the legal bill for a strong case is more than you can absorb, funding can be the difference between pursuing a claim and walking away from money you're owed.
The catch, historically, has been transparency. Funding agreements were private contracts. The other side in a lawsuit often had no idea a third party was involved, let alone what terms it had negotiated. Regulators and courts started asking whether that secrecy was creating conflicts — funders quietly steering litigation strategy, foreign investors bankrolling U.S. lawsuits without disclosure, fee structures that left plaintiffs with a fraction of their own judgment.
Georgia is one of several states now answering that question with legislation. Oklahoma and Utah enacted similar transparency laws in 2025, and a federal bill — the Litigation Funding Transparency Act of 2026, introduced by Senator Chuck Grassley and co-sponsors in February 2026 — would impose disclosure requirements in federal class actions and mass tort proceedings. Georgia's law is the most detailed state-level framework so far, and it's worth understanding even if you never plan to use litigation funding, because the discoverability provisions alone change how any funded lawsuit in Georgia will play out.
The Core of SB 69: Registration With the Department of Banking and Finance
Starting January 1, 2026, anyone providing litigation financing for consideration in Georgia — "any person or entity...engaged in...providing litigation financing in exchange for consideration" — must register with the Georgia Department of Banking and Finance. The Department has said it will process these registrations through the Nationwide Multistate Licensing System (NMLS), the same infrastructure mortgage lenders and money transmitters already use to register across states. That's a meaningful signal: Georgia is treating litigation funders as a regulated financial-services category, not an unregulated side market.
For a small business owner evaluating a funding offer, this means your first practical check is simple: is the funder actually registered? An unregistered funder operating in Georgia after January 1, 2026 is out of compliance with state law, and that's a red flag worth asking about directly before you sign anything.
What the Law Requires From Funders
SB 69 doesn't stop at registration. It builds a disclosure and conduct regime around every funding agreement:
- Written contracts, full disclosure. Funding agreements must be in writing, and funders can't omit material terms. If you're a plaintiff, you're entitled to see exactly what you're agreeing to — fees, repayment triggers, and what happens if the case settles, loses, or drags on for years.
- Ownership and criminal-history disclosure. Registered funders must disclose their ownership structure, foreign affiliations, and relevant criminal histories to the Department.
- No foreign-adversary funding. Entities with any ownership interest held by designated foreign adversaries are barred outright from litigation funding in Georgia. This closes a loophole regulators nationally have flagged — foreign capital quietly funding U.S. litigation with no visibility into who's actually behind it.
- No control over your case. Funders cannot dictate settlement decisions, litigation strategy, or your choice of counsel. They also can't retain the right to pick your experts or vendors. The point is to keep you, the plaintiff, in the driver's seat of your own lawsuit — the funder is a financier, not a co-plaintiff.
- Fee caps tied to net recovery. Funders cannot charge fees that exceed your net recovery after expenses. In plain terms: the deal can't be structured so you end up owing more than you actually collect.
- Limits on securitizing or reselling agreements. With narrow exceptions, funders can't bundle and resell their stake in your case to other investors — another provision aimed at keeping the ownership chain transparent.
Why the $25,000 Discoverability Threshold Matters Most
If there's one number to remember from SB 69, it's $25,000. The law amends Georgia's discovery statute (O.C.G.A. § 9-11-26) so that any litigation funding agreement of $25,000 or more becomes discoverable — meaning the opposing party in your lawsuit can request the existence, terms, and conditions of your funding arrangement as part of routine discovery.
That's a significant shift. Before SB 69, the other side in a lawsuit typically had no automatic right to know a funder was involved at all. Now, if you take on $25,000 or more in litigation financing, expect the other side's attorneys to ask about it — and expect to have to answer.
There's a liability angle too. If your funding exceeds that $25,000 threshold and a court later finds the litigation was frivolous, the funder can be held jointly and severally liable for court-ordered sanctions. That gives funders a real incentive to vet your case carefully before writing a check, which cuts both ways for a small business: better funders should mean better-underwritten deals, but it may also mean funding is harder to get for marginal claims.
What This Means If You're Considering Funded Litigation
If your business is weighing a funding offer for a Georgia lawsuit, SB 69 gives you leverage you didn't have before:
- Confirm registration. Ask the funder for their Georgia Department of Banking and Finance registration status before signing anything. If they're not registered after January 1, 2026, that's a compliance problem that should worry you as much as it worries regulators.
- Read the fee structure against your net recovery. The law caps funder fees at your net recovery, but "net recovery after expenses" still leaves room for aggressive fee structures. Have your attorney model out a few settlement scenarios before you sign, so you know what you'd actually keep at $50,000, $200,000, and $500,000 outcomes.
- Know your case becomes more visible. If your funding deal crosses $25,000, assume opposing counsel will ask about it. That's not necessarily bad — transparency can undercut a defendant's argument that you're pursuing a nuisance claim — but it does mean your funding terms are no longer a private matter once litigation is underway.
- Watch for control clauses. SB 69 prohibits funders from directing your strategy or settlement decisions, but read your contract closely anyway. A "consultation" clause that in practice pressures you toward the funder's preferred outcome is worth flagging to your attorney before you sign, not after a dispute arises.
The Bigger Pattern: A Patchwork Worth Watching
Georgia isn't acting alone. Oklahoma's Foreign Litigation Funding Prevention Act took effect in November 2025. Utah passed its own transparency law in 2025. Michigan and Tennessee are considering similar measures. And at the federal level, the Litigation Funding Transparency Act of 2026 would require disclosure of third-party funding — including foreign funding — in class actions, multidistrict litigation, and large coordinated federal proceedings involving 100 or more cases, while also barring funders from influencing strategy or accessing protected discovery material.
If your business operates across state lines or you're involved in litigation that could become part of a multidistrict proceeding, it's worth knowing that the rules aren't uniform yet. A funding agreement structured for Oklahoma or Utah compliance won't automatically satisfy Georgia's disclosure and registration requirements, and vice versa. If you're evaluating a funder that operates nationally, ask specifically how they're complying with each state where your litigation might be filed.
Keep Your Financial Records Ready for What Comes Next
Whether or not you ever take on litigation funding, a drawn-out lawsuit — funded or not — puts real pressure on your books. Legal fees, settlement proceeds, and any funder repayment all need to be tracked cleanly, especially once a funding agreement becomes discoverable and the other side's attorneys start asking pointed questions about your finances. Beancount.io offers plain-text accounting that gives you a transparent, version-controlled record of exactly where every dollar went — no black boxes, no vendor lock-in, and records you can hand to your attorney or accountant without translation. Get started for free and keep your financial story as clear as the law now requires your litigation funding to be.