Can a Merchant Cash Advance go after my new business

[phone]
We Offer Free Consultations - Stop the Harassing Phone Calls Now
THE BIRTH OF MERCHANT CASH ADVANCE
Beginning early 2010, after the Great Recession, when the American housing market blew up and
the world fell into a nancial crisis, traditional banks like Chase or Citi were unwilling to extend new
and small businesses any credit. While the global nancial markets slowly recovered, both self-
regulation and government regulation over conventional banks, meant that underwriting
standards for new loans increased to such a level that most small businesses were no longer
eligible to borrow from the regular banking system.
The “new” underwriting standards of the traditional lenders left a massive void in lending to small
businesses and merchants alike. The time was ripe for someone or something to address the lack
of credit and lending to small business.
What transpired was the birth of the Merchant Cash Advance world. A small business “loan”
extended against the future credit card receivables of the small business. The MCA concept was
new. As with any new market, the regulation was not able to keep up with industry trends and
changes. The MCA market turned into the Wild West. It grew into a “Legal” usury platform and
allowed for anyone to enter the space without the need for licensing, background checks or any
other form of weeding away lending predators and abusers. However, still in 2020, a full decade
later and the MCA industry remains unregulated and the Wild West.
As time went by, more and more players got into the MCA game and as the industry matured so did
the funders methodologies for making even more money o the drowning merchants.Like any
money making bonanza systematic practices were created that were designed to hold the
merchant hostage and abuse their small business. Such practices as daily payments. The use of
ACH. Lock boxes. Access to Merchants bank accounts. Personal guarantees. Liens led against a
merchants personalcollateral such as real estate, even primary residence. Confession of Judgments
(COJ) a legal tool whereby the funder obtains a legal judgment without having to litigate. 33%
attorney’s fees. Visits to the merchants business. Predatory usurious lending rates. Interest rates
that exceed 100, 200 and even 800%. Illegal collection activities. Excessive Origination Fees.
Excessive Underwriting Fees. Excessive broker commissions. Illegal collection methods. Harassment
and many other unscrupulous acts.
Unfortunately, instead of increasing scrutiny and introducing legislation, all that the last decade has
done is allowed the market to grow unregulated. Even the so called pristine are involved. Several

publicly traded companies are entering the world of Small Business Lending or Merchant Cash
Advance. In fact prestigious investment banks like Morgan Stanley have invested money with some
of the largest MCA lenders and more investors want in. Where else can you charge 100, 200 or even
1000% interest on your money and have the law call it legal?
What about usury? Most States have usury laws on their books that set the maximum amount of
interest you can charge on a loan. This number may vary depending on State, for example;
California, Texas, New York, Florida, Michigan, Pennsylvania, Illinois, Tennessee, Ohio, New Jersey,
Georgia, Arizona, North Carolina, Massachusetts, Indiana and Missouri all permit Merchant Cash
Advance loans but also have usury laws on their books.
So, how is it possible? If usury sets a cap on interest allowed to be charged, why can an MCA funder
charge any amount of interest they want?
Many Courts have ruled that a Merchant Cash Advance is legally not considered a loan. These
opinions have held that when a merchant takes out a Merchant Cash Advance, he or she did not
borrow money. Only borrowed money, otherwise known as a loan, can be subject to usury laws and
these Courts have stated that because the MCA funder is purchasing a percentage of the
merchants future credit card receivables, it’s not considered a loan and therefore not subject to
State usury laws.
It is troubling when Courts side with Merchant Cash Advance Lenders and rule that this predatory
lending practice is not a loan. These legal opinions have only emboldened the funders to charge
and take even more of the Merchants business revenues and prots. Courts are institutions of
equity and fairness, refuge, justice and a formal place for even the small, poor and weak to have
their voices heard and have their day in court. Yet, the Courts seemed to have left the small
business owner behind. Without the guard of usury, small business owners are ripe prey for the
predatory lending world of an MCA loan.
With the Courts seemingly blessing MCA funders to do as they please and charge what they wish,
the industry is crying out for regulation, laws and accountability. Until this happens we must
challenge the funders. Challenge their contracts. Challenge their fees. Challenge the actual APR.
Challenge their abusive practices and illegal collection tactics and end this “non-loan” sham.
If it looks like a loan, acts like a loan, requires a pay back and has the hallmarks of a loan, it should
be treated as one. Yet, the simple “act” of buying future credit card receivables or even just calling it
a receivable purchase in a contract, is enough for these predatory loans to be legally sold to
unknowing merchants.
Someone needs to stand up for the small business owner. Better yet, new and transparent
methods of merchant lending must be created. Too many businesses have been forced to shut or
le bankruptcy because of these insidious loans.
With many Court opinions stating an MCA is essentially legal, is there a way to challenge, settle or
legally ght a Merchant Cash Advance? The answer is an emphatic YES! There are other Courts that
have held the so called MCA to be a loan and thus subject to usury laws. Moreover, by working with
a specialized Merchant Cash Advance Law Firm, you will have experience and knowledge at your
side You will know your rights and most importantly you will know what can be done to end daily

side. You will know your rights and most importantly you will know what can be done to end daily
ACH payments, collection eorts and have your MCA loan settled for example to a MONTHLY
payment plan. Most importantly we will alleviate your stress and worry.
The attorneys at Grant Phillips Law, PLLC are experts in the practice of Settling, Challenging and if
applicable Terminating a Merchant Cash Advance loan. We are an aggressive law rm and stand
shoulder to shoulder with our clients. Our long term goal is to see the industry be regulated and
the players vetted, see interest rates capped and the adoption of a uniform contract and with
standard and capped fees.
Our law rm serves clients across the United States. You do not need to be a resident of New
York to receive our law rm’s assistance.
The attorneys at Grant Phillips Law, PLLC have assisted hundreds of Merchants with their Merchant
Cash Advance Loans in most States, including but not limited to: California, Texas, New York, Florida,
Michigan, Pennsylvania, Illinois, Tennessee, Ohio, New Jersey, Georgia, Arizona, North Carolina,
Massachusetts, Indiana, Missouri and all across the United States.
516.670.5165 or speak with someone 24/7 via the Live Chat on our website.
Copyright © 2019 Grant Phillips Law PLLC, all rights reserved.
670 Long Beach Boulevard, Long Beach, NY 11561 [phone]