When you record lower credit card sales, the amount collected will be smaller. (Merchant Cash Advance) MCA Loan Consolidation. The FTC alleges that although the defendants websites state that the MCA requires no personal guaranty of collateral from business owners, the contracts actually contain a personal guaranty provision. Contact the Attorneys atGrant PhillipsLaw, PLLC. You may be required to switch to a new credit card processor if your MCA provider does not work with the previous one. Contact us today with any legal questions regarding alternative finance! You may have come across merchant cash advances as a source of funding in case your company has ever required extra cash to function in the short term or expand. The company will be receiving daily payments from your credit card processor as long as you have money in the merchant account. Globals experience coupled with its team of nationwide litigators and seizure experts allows Global an extreme advantage to help your company recoup losses. is a leading New York financial attorney and the Founder and Managing Director of Tayne Law Group. With the various types of merchant cash advances, an MCA provider will give you a large sum of money. Require a merchant cash advance attorney in California? Later her company would become CAN Capital. This information is then compiled and sold to other MCA funders who will try to get you to stack your advances which will, in most cases, only place your livelihood at greater risk and further in debt. The New Jersey legislature has decided to reign in the use of Confessions of Judgments. portalId: "20208004", }). A merchant cash advance is a flexible financing option that allows business owners or merchants to receive a lump sum of cash to fund their business during a downtime. Do you have a merchant cash advance you are struggling to pay? Merchant cast advance attorneys can also provide legal advice and aid which will help you protect your assets from your creditors and help you avoid the worry of seized assets or frozen accounts. Drafting of loan and credit documents for. If you answered yes to any of these questions, contactGrant PhillipsLaw, PLLC helping California based Merchants. If your business is struggling with repaying a merchant cash advance, if you are at risk of defaulting, or have already defaulted then you should strongly consider consulting with an attorney experienced with mca lawsuits. We offer quick assistance to you. The MCA company also looks at how long the merchant has been in business for and what industry they are in. It could put you out of business. Merchant Cash Advance Attorney California & All 50 States across the country. Did you receive a merchant cash advance breach of contract lawsuit? New Jerseys Senate Commerce Committee advanced S3581, a bill that would prohibit the use of COJs in a business financing contract with a New Jersey debtor. Other documents you need for the application include business tax returns, voided business check, and a driver's license. These Complaints filed by the Federal Trade Commission and the New York Attorney General provide a glimpse into what merchant cash advance companies should expect in a regulated future for the industry. This legislation was amended to remedy the extreme abuses that were taking place by merchant cash advance companies. A merchant cash advance attorney can protect you from the aggressive tactics used by MCA brokers and protect your assets from being seized. Grant Phillips Law has a dynamic team of lawyers with the necessary knowledge, experience and expertise to help you get out from burdening Merchant Cash Advance positions. An MCA is also a great solution for settling unexpected payments and debt payments. The higher the risk, the higher the factor rate. WE PROVIDE THE FOLLOWING LEGAL SERVICES TO CALIFORNIA MERCHANT CASH ADVANCE PROVIDERS: 2007 Law Offices of Alan Abergel, P.C. The most common methods include credit and debit card processing, electronic funds transfer (EFT), and automated clearing house (ACH) transactions. Her Patented technology allowingfor the splitting of credit card sales was a major step in the birth and growth of the MCA world. Are you having merchant cash advance legal issues? We help business owners find solutions. In a process called stacking, other MCA funders may contact you to try to get you to add new advances on top of your existing one in a gambit to get out of debt. Knowledge of the cost of a merchant cash advance is crucial to your business if you are considering this financing option. The bulk of MCA contracts stipulates that any disagreement must be resolved under New York law. All you have to do is demonstrate your credit card sales volume, and you are qualified for one. Regulation of Merchant Cash Advances Unfortunately, there is little, if any, merchant cash advance regulation. Every cent received as a cash advance will be deducted from your credit card sales. The New Jersey State legislature strengthened its Confession of Judgment bill by adding language that grants the Attorney General power to enforce monetary penalties against violators. We tailor our services to your needs and will work to obtain the highest return on your negatively performing obligations. Within a few business days of being approved, youll receive your lump-sum payout. Some small business financing providers in California provide financing in the form of "merchant cash advances" or "sales of future receivables" through which businesses receive cash up-front in exchange for "selling" a portion of their future revenue. Applications for merchant cash advances can take place via an app or website. Return home. Merchant cash advance companies are beginning to be examined much more critically by state and federal governments. But is Merchant Cash Advance legal in California? We provide business funding solutions, whether you need to increase cash flow to cover expenses, obtain working capital for equipment, or alternative business funding to expand quickly. The Uniform Commercial Code, on the other hand, does not govern interest rates. . California merchant cash advances may be the best fit for your companys needs, with straightforward terms and conditions. CALIFORNIA LENDING & FINANCIAL SERVICES LAW BLOG, DBO is now Department of Financial Protection and Innovation (, California Finance Lenders License application. MCAs are not covered under the California Financing Law since they do not qualify as loans. Your Merchant Cash Advance Attorneys California to preserve your legal rights, enforce those rights and protect you and your business. Meanwhile, New Yorks legislature had also proposed a near-identical bill, but it did not pass. Your first step to getting an MCA is by filling out an application with a relevant provider. It is a form of alternative financing by boosting funds for better business operation and is repaid in a percentage of credit and debit card sales. These lawsuits pose a threat to the MCA industry, and provide insight into the types of claims state and federal regulators will bring against MCA companies in the future. Most business cash-advances require a daily repayment which can become challenging if the business experiences financial distress. By negotiating new terms with the creditors, our company might be able to assist the company in creating a strategy to manage its debt. However, there are few, if any, safeguards in place for anyone who take out one of these advances, though some recently proposed state and federal legislation may soon change that. Established providers tend to offer higher limits to the amounts while less established ones tend to offer lower limits. The FTC and the New York Attorney General both accuse the defendants of illegally marketing, providing, and collecting MCA. While an MCA can quickly inject capital into a business struggling with cash flow, the consequences far outweigh the benefits. The provider will rely on this documentation to verify whether your annual credit card receipts indicate an adequate cash flow. The types of law firm payment processing. Because California is one of the best states for domestic and international businesses, a CA merchant cash advance in California is beneficial for the sustainability and growth of these businesses. A factor rate helps to express the interest amount an MCA provider can charge on your advance. As a small business, you are constantly buying and selling inventory. Global will tailor its services, collection, lawsuit, enforcement, and liquidation to your needs. . You must have a solid Internet connection for you to submit the required information. Advice concerning state and federal financial and lending laws. Global Legal Law Firm doesnt just talk a big game, we actually deliver. They do not fall under any state usury laws. Getting a merchant cash advance California from Panthera Financial will not only provide you with the best services but reliability as well. You should be prepared to make these payments once the cash advance is sent to you. Home. Because merchant cash advances are not deemed loans. Once a merchant cash advance company has a CFLL license, even if the transactions are recharacterized as loans, the transactions are not usurious under state law. Simply fill out the form below and we'll be in touch shortly. When the economy took a downturn in 2008, it was one of the only sources to get funding for your business and this opened the floodgates. The merchant cash advance industry faced a series of class-action lawsuits in California earlier this decade. You may have been required to sign a confession of judgment document when you executed your MCA paperwork. A specialized Merchant Cash Advance Law Firm, serving residents of California. On 10th June in 2020, the Federal Trade Commission and the New York Attorney General filed lawsuits in the Southern District of NY and the Supreme Court of the State of New York County of New York against two merchant cash advance companies, RCG Advances and Ram Capital Funding. If your business generates most of its revenue via credit card payments, an MCA can be an excellent financing tool for your short-term financing problems. We have saved our clients millions of dollars. A holdback percentage determines the amount of money an MCA company will subtract from your daily credit card sales. Your credit card processing firm will facilitate repayments for the cash advance. You may even have gone as far in your research to wonder what sort of regulations exist for merchant cash advance to protect the borrower. We understand the stressful time you may be going through. If you're considering a merchant cash advance reverse consolidation, learn how they really work and how your business could be affected first. While considering this option, you may have asked yourself what the difference is between alternative financing and traditional loans or questioned whether it affects credit scores the same way. Well look at the present state of merchant cash advance regulation, as well as recent moves in many jurisdictions to address difficulties with advances, in this post. In a typical merchant cash advance, lenders and borrowers agree to a daily or weekly payback system and in return, the lender receives a percentage of sales or receipts from the borrowers. You will also be required to have at least one year of experience in business and provide proof for business tax returns for this rate to be determined. California Office. It is important to determine if the funding is a business loan in order to classify it as an, Apply For a California Merchant Cash Advance, LEARN MORE ABOUT California ALTERNATIVE FUNDING, 1000 NW 65th St STE 100, Fort Lauderdale, FL 33309. The CFL generally covers both consumer and commercial lenders. Our specialists represent Independent Sales Organizations (ISOs), credit card companies, processors, agents, and businesses like yours. This is where Global comes in. The funds are then deposited into the business owners bank account for their use. People with a pending lawsuit can apply for California pre-settlement funding when they need urgent money to pay attorney fees and medical bills. Does Merchant Cash Advance Regulation Exist? A merchant cash advance (MCA) isnt technically a loan, but rather a cash advance based upon the future credit card receivables a business will receive. This gives MCA providers a lot of discretion to act in unethical ways in order to get beyond the restrictions and laws that conventional lenders must observe. The CFL applies to both consumer and commercial lenders, requiring licensing and disclosure as well as interest and fee caps on some loans. The following is asample listof many of the funders Grant Phillips Law have negotiated with successfully. Initially merchant cash advances were byproducts to selling credit card processing point of sale systems. Looking for different sources of financing is an excellent way to help sustain your business, especially in the case of potential downfalls. THE LAW OFFICES OF ALAN ABERGEL, P.C. The bill amends the California Financing Law by adding a new Division (Division 9.5). Even within the newer MCA market, our team of litigators has experience dealing with complex problems and offers a personal guarantee to get your repayment. Certain considerations have been used in recent cases examining whether merchant cash advance agreements are sales or loans, determining whether the transaction provides for absolute or dependent payback. Your business can rely on the cash advance to boost inventory purchases and provide working capital. Call our office 516.412.7622. Merchant Cash Advance Attorney in California. Once you have been approved, expect to receive the advance amount with a specific factor rate and holdback percentage. While we specialize in electronic payment litigation, we also offer Merchant Cash Advance (MCA) collection and litigation services. A merchant cash advance provides small business owners quick access to capital for emergencies and all types of business needs. Worse, the lender may exercise a Uniform Commercial Code (UCC) Lien against your business to stop other businesses, insurance companies, or individuals from paying you owed cash. It feeds you, supports your family, creates jobs and as such is worth fighting for. For example, let's say you advance a merchant cash loan of $100,000 with a factor rate of 1.3. Did you receive a merchant cash advance breach of contract lawsuit? Certainly, not all funders use COJs. Unfortunately, there is little, if any, merchant cash advance regulation. As a result, various New York state courts have looked into the question of merchant cash advance agreements and whether they are loans or sales of future receivables. Only with these things, you are ready to get merchant cash advance loans. Our primary objective is helping business owners learn about a wide array of financial instruments, such as small business loans, merchant cash advances, lines of credit, SBA loans, term loans, and more. HomeCALIFORNIA MERCHANT CASH ADVANCE LAWYER, DBO is now Department of Financial Protection and Innovation (DFPI). Please note: if you do not see your specific funder listed, it is still very likely that we have negotiated and settled a Merchant Cash Advance loan with them but they are not listed here because this list is only a sampling of Merchant Cash Advance funders we have worked with: If you are a California resident or have a California business and have taken out an MCA position with an MCA funder, whether the funder is based in California or anywhere across the entire United States, contact the law firm of Grant Phillips Law, PLLC. However, the Uniform Commercial Code does not regulate interest rates. The DBO encourages small businesses to review the terms of their existing financing products to determine whether they may be entitled to relief and report finance companies that fail to honor contractual terms that provide relief. A merchant cash advance may be ideal for you (a business owner) if you are not willing to use your assets as collateral when seeking a loan. This method is only one of the tools we have at our disposal, providing you with even more incentive to complete your companys financial demands with us. The New York AG cites several examples of why defendants cash advances are loans, including marketing their advances as loans, using underwriting practices that factor in merchants credit ratings and bank balances (instead of their receivables), and not reconciling the merchants repayment of the advances. whether it has the same impact on credit ratings. Just recently, for instance, Greenbox Capital suspended the use of COJs indefinitely, in response to the heightened industry wide debate over their use. Not only is the interest rate often very high (and difficult to figure out), but there are often hidden fees that can greatly increase the amount that a small business is expected to repay this can eventually lead the business owner into debt or default. Although the new law does not require Merchant Cash Advance providers to be licensed in California, it is still newsworthy because the new law now includes providers & funders of commercial, non-loan financing options like a Merchant Cash Advance loan into the purview of the California Financing Law. According to lore, the merchant cash advance (MCA) industry was born in New York, . Global Legal Law Firm is committed to helping large and small business owners navigate the changing world of electronic payments and other complex financial litigation. Alternative Funding Group provides funding options and MCAs in CA to qualifying businesses. We are the better option for merchant cash advance companies to collect outstanding debts from merchant accounts. How Long Has Merchant Cash Advance Been Around? Additionally, a credit check may be required in order to qualify. This is considered a Merchant Cash Advance. Fighting, Settling and Litigating for Merchants across California and the entire United States. Even after applying for a conventional loan, you may fail to meet the requirements designed to favor large businesses. Instead of a loan, merchant cash advance in California allows businesses to acquire capital and is repaid from future receivables. Unfortunately, many small business owners enter into contractual agreements with one or more MCA lenders with the expectation that the lender will provide short term factoring receivable funding to assist the business owner to meet the financial needs of the business between the intervals of its customer regular pay cycles. There are a number of other funding methods and loans available to business owners that are less risky. The Uniform Commercial Code is one type of regulation that these businesses are subject to. Interest rates are designed to accrue over time while factor rates are not affected by the time taken to repay a merchant cash advance. Unlike interest rates, which change as your debt reduces, factor rates are only imposed on the original cash advance amount. An MCA company may approve your application in 24 hours depending on the information you filled. The California Financing Law (CFL) has historically been guiding licensing procedures for finance brokers and lenders. Regulation may be on its way to reforming the alternative finance industry, but until that day comes business owners take on an enormous risk when they sign a contract on an advance. Call us today to review your businesss hardship or pending lawsuit. What is a reconciliation? The interest rate or effective APR is so excessive and in turn profitable for Merchant Cash Advance funders that large publicly traded companies have also entered the Merchant Cash Advance arena. Some of the cases settled once the plaintiffs were able to show that the documentation for these transactions used loan terminology or that the owners had signed broad repayment guarantees. Simplicity, faster access, and convenience are the three attributes used to describe the value of merchant cash advances. 516.670.5165www.grantphillipslaw.com. Wide Merchant Group offers business owners merchant financing solutions with fixed rates, minimal paperwork, and flexible payables. Call for a free consultation (866) 890-7337. . You may also seek it if you have a limited business history. A merchant cash advance in California is a way for companies to get the funds they need without having to wait for the money to come in from clients. With us, you can have a quick merchant cash advance California without much hassle which you would otherwise face with bank loans. Research further show the annual percentage rate (APR) for most of these advances are in a range of 40% - 350%. Following an initial free consultation, one of our firms attorneys will review your merchant cash advance or business loan agreements and share their findings and initial legal advice with you. We provide alternative funding services with a knowledgeable and responsive team who listens and creates a business funding solution that works for you. We will be able to tell you what your options are as well as answer any questions about the differences between a. Instead, an MCA is an advance on your future revenue. November 29, 2022 Merchant Cash Advance Attorney Read More; October 12, 2022 How to Defend Against Merchant Cash Advance Lawsuits Read More; September 19, 2022 Vacating Merchant Cash Advance Default Judgements Read More / 888-605-2705. What is a Merchant Cash Advance? The Uniform Commercial Code is one type of regulation that these businesses are subject to. Unfortunately the new law does not provide guidance on the disclosures as it related to their definitions, what they should contain from a content perspective, nor does it describe the methods for calculating the items requiring disclosure as well as not describing the manner, time structure and format of the disclosures. Since you will be paying the MCA with your daily credit/debit card sales, the MCA provider will ask you for processing statements showing these sales. You may be surprised to learn of your extremely high actual interest rate, costs and fees. Your business can receive an MCA provided that you share a percentage of your debit card and credit card sales with the MCA provider. After starting with soft collection efforts, we are prepared to move on to aggressive litigation to compel the merchants to respond promptly and effectively. MCA's are not considered a loan and there is no federal oversight of the advances. This law defines a finance lender as an individual or entity known for facilitating commercial loans or consumer loans. Right before the financial crisis when the split-finding patent was invalidated, companies began to focus solely on funding advances. The Cost Disclosure Statement must state clearly the amount financed, the total costs involved, the length of time, the frequency and amount of payments to be made as well as state clearly the method of how payment is made, an explanation of pre-payment consequences, and state the total cost of the financing as an annualized percentage rate. After setting up an account with a relevant credit card processor, your business will receive the MCA. You may need new equipment, additional inventory or maybe you just need to cover payroll. Call us today for a business loan at 800-630-4214 for a consultation on merchant cash advances or any of our financing programs. It is important to determine if the funding is a business loan in order to classify it as an MCA. When your business records higher credit card sales in a day, the amount collected by the MCA provider will be higher as well. Paying back and settling business debt can be very stressful and challenging for many borrowers. What is a Non-Managing Member in a Commercial Litigation. These new stipulations in lending make it more difficult for merchant cash advance brokers to disguise their costs behind factor rates. Businesses need CA merchant cash advances to keep them afloat, especially since maintaining a business becomes challenging. A merchant cash advance is a type of alternative financing for businesses. The additional fees may include advance fees or setup fees. New York (the epicenter of MCA) enacted a law in September 2019 banning New York Funders from issuing a Confession of Judgment to an out of State borrower like a California Resident. Unlike a traditional loan, you can pay back an MCA as you begin to make sales. If you signed a Confession of Judgment with your MCA Contract, reach out to your California Merchant Cash Advance Attorney for help and advice. Find out more about our merchant financing services in this article. Simplicity, faster access, and convenience are the three attributes used to describe the value of merchant cash advances. The attorneys at Grant Phillips Law, PLLC have seen cases where the effective APR on a Merchant Cash Advance was in excess of 1,200% If you Merchant Cash Advance position is eating away at your business cash flow and revenues, don't hesitate to contact California Merchant Cash Advance Attorney Grant Phillips Law, PLLC - serving clients in California and across all 50 States. Small business owners occasionally require additional operating capital to effectively run their businesses. Did you sign a confession of judgment when you received your advance? Grant Phillips Law, Merchant Cash Advance Attorney California. On August 31, 2018,the California Senate and Assembly passed SB 1235. How does it help me? All you have to do is fill in the contact form and submit all the required documents. Let us review your MCA contract for illegalities. You have provided support, knowledge and experience and helped provide and support jobs, all while trying to earn a living for your family. If it takes a week to set up the account, it may also take a week to have funds remitted to you. It consists of lump-sum payments and is repaid through the businesss future revenue. Your connection to Wide Merchant Group is securely encrypted, Wide Merchant Group3580 Wilshire Blvd #160 Los Angeles, CA 90010800-630-4214, Copyright 2018 Wide Merchant Group - All Rights Reserved | Privacy Policy, Multiply the holdback percentage with your monthly credit card sales, Divide the total funding cost by the estimated monthly payment figure to determine how long it will take you to repay. What Is Article 9 Of The Uniform Commercial Code? While most people confuse a merchant cash advance (MCA) with a loan, the truth is that these two financing options are different. Often, business owners may get in over their heads with these types of loans and may require the assistance of a Merchant Cash Advance experienced lawyer to help them in regaining day to day control of their business enterprise. Many indebted merchants have turned to the courts for help in the absence of government monitoring or regulation. Our service is designed for businesses needing quick capital. In this case, reputation stems from issuing clients with attractive merchant cash advance options. If you need a Merchant Cash Advance Attorney California, contact our law firm. Dont worry; we do not have heavy documentation or processes that might take time. Leslie H. Tayne, Esq. MCA providers use this information to determine the factor rate needed to compensate for the risk of giving you an advance. This information is not intended to create, and receipt of viewing does not constitute, an attorney client relationship. What is Merchant Cash Advance in California? Our experts will review your information and contact you for further discussions. Along with similar claims and allegations advanced by the FTC, the New York AG contends that defendants disguise each loan as a Purchase and Sale of Future Receivables, but in reality, the transactions are loans.. These alternative solutions include merchant cash advances and factoring. Unable to get working capital to fund a summer marketing campaign, she wondered whether she could borrow against future credit card sales derived from parents bringing their kids back for fall classes. You have worked exceedingly hard to build your business. The MCA company decides how high the factor rate will be based on reviewing bank statements which will show the number of monthly deposits, how much those deposits were for, how many days they did not receive any deposits and how many other advances the merchant has. Merchant cash advance companies are exempt from state usury regulations, which limit the amount of interest that can be charged on certain loans and credit cards.
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