You have provided support, knowledge and experience and helped provide and support jobs, all while trying to earn a living for your family. The repayment term varies since the payments are based on the percentage of revenue of your daily credit card sales. Let Us Help You! THE LAW OFFICES OF ALAN ABERGEL, P.C. Initially merchant cash advances were byproducts to selling credit card processing point of sale systems. If youve taken an advance from a merchant cash advance lender and are now struggling to address your situation, you need an experienced merchant cash advance attorney on your side. Interestingly the new California Law refers to commercial financing, meaning the loan or financing is for a corporate / commercial purpose. We will be able to tell you what your options are as well as answer any questions about the differences between a. 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. Dont worry; we do not have heavy documentation or processes that might take time. 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. Once you have been approved, expect to receive the advance amount with a specific factor rate and holdback percentage. As accounts receivable acquisition transaction, such as factoring, asset-based lending, commercial loans, commercial open-end credit plans, or lease financing transactions, is a covered commercial finance transaction. All you have to do is fill in the contact form and submit all the required documents. The law added a new Section to the California Financing Law (CFL). As an example, it would be potentially actionable for the MCA lender to execute on a COJ simply because the small business owner does not remit receivables the merchant cash advance company purchased because the small business owner did not generate receivables. Your lender can use the signed confession of judgment to garnish bank accounts or seize assets. Do you have a merchant cash advance you are struggling to pay? You have put in time, money, equity, experience and knowledge into building your business. A UCC lien is an actual lien on non-real property (e.g., bank accounts, personal property like business equipment, etc.). Even after applying for a conventional loan, you may fail to meet the requirements designed to favor large businesses. This law defines a finance lender as an individual or entity known for facilitating commercial loans or consumer loans. Will it lower payments? 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. When your business records higher credit card sales in a day, the amount collected by the MCA provider will be higher as well. However, what may have been characterized by the lender as a factoring relationship was, in fact, an unregulated loan. Send Grant Phillips Law your Merchant Cash Advance contract for a free legal review and analysis for compliance with California law. Our services include, assisting with the California Finance Lenders License application, legal advice about compliance with the California Finance Lenders law and applicable California and federal financial laws and regulations, drafting of contractual documents and disclosures in compliance with the California Finance Lenders law and applicable state and federal financial laws and regulations, representation before the DFPI in administrative litigation matters, audits, inspections, citations, desist and refrain orders, license suspensions, revocations, and accusations, representation in appeals of administrative decisions, and representation of California merchant cash advance providers in court in defense against lawsuits brought by the DFPI, or other government authorities. In 1998 a company called AdvanceMe (now called CAN Capital) pioneered the splitting of credit cards. Alternative Funding Group offers an MCA in California to a business that needs a lump sum of capital to move ahead. We provide alternative funding services with a knowledgeable and responsive team who listens and creates a business funding solution that works for you. A holdback refers to the amount of money kept in reserve by an MCA provider until you meet various conditions. Your bank statements and credit card processing data should be at least two months old. 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. 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. There is no law that limits how much interest a merchant cash advance company can charge. 1 Merchant Cash Advance Defense Lawyer | Jacovetti Law, P.C. 1. Recent decisions evaluating whether merchant cash advance agreements are sales or loans cite certain factors to determine whether the transaction provides for absolute or contingent repayment. (Merchant Cash Advance) MCA Loan Consolidation. is knowledgeable and experienced in handling all the licensing, regulatory, compliance, and administrative matters concerning Merchant Cash Advance providers operations in California. 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. Did you sign a confession of judgment when you received your advance? Contact Us:-GRANT PHILLIPS LAW, PLLC [email protected] 516.670.5165 Business Debt Relief - Done Right! On September 30, 2018, Governor Brown signed it into law. If merchants do not comply, they become judgment debtors subject to judgment enforcement and the full force of all legal garnishment, levy, and lien structures. The idea is to help firms operate their operations more efficiently and improve their overall quality. We're a national leader providing business financing with a 99% approval rating. Moreover, you have the choice of using the option as your requirements. 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. The problem with most conventional financing options is that they take time and have strict measures. Skip to content. The payments can then be paid back in a specified time frame. This information is not intended to create, and receipt of viewing does not constitute, an attorney client relationship. You may need new equipment, additional inventory or maybe you just need to cover payroll. It may also take your business as short as four months or as long as eighteen months to clear the cash advance depending on your operations. 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. The additional fees may include advance fees or setup fees. Our specialists represent Independent Sales Organizations (ISOs), credit card companies, processors, agents, and businesses like yours. MCA's are not considered a loan and there is no federal oversight of the advances. You put in time, money, equity, experience and knowledge into building your business. If a business owner does not qualify for traditional financing, a Merchant Cash Advance Loan may seem like a reasonable or viable option to help the business. GPL, your California Merchant Cash Advance Attorneys. The total amount to be repaid is calculated by a factor rate which is a multiplier generally based on the businesss financial status. 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. Additionally, your company needs minimal revenue of $90,000 annually or $7,500 for the last three months. Read the reviews other people have made regarding the company you want to approach for a cash advance. For example, let's say you advance a merchant cash loan of $100,000 with a factor rate of 1.3. The experienced and compassionate lawyers at Grant Phillips Law can help you evaluate your Merchant Cash Advance contract for strict compliance with the new California Law. 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. The California Senate and Assembly passed SB 1235 on August 31, 2018, and Governor Brown signed it into law on September 30, 2018. If most of the reviews are positive, it may symbolize a good reputation. In California, is Merchant Cash Advance a CA Business Loan? Merchant Cash Advance in California is a type of finance that assists businesses financially. 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. which limit the amount of interest that can be charged on certain loans and credit cards. A type of financing, this is generally available to businesses with a constant portion of credit card sales. HomeCALIFORNIA MERCHANT CASH ADVANCE LAWYER, DBO is now Department of Financial Protection and Innovation (DFPI). The payments and interest may become too high for you to handle on your own. Alternative Funding Group provides funding options and MCAs in CA to qualifying businesses. They can be five percent of the cash advance or more. 516.670.5165www.grantphillipslaw.com. It comes along with several other benefits as well that go as follows: You dont need to tie any of your assets as collateral for the advance which serves as a major perk for the majority, All rights reserved Copyright Panthera - 2018 | Privacy Policy | Terms & Condition. It will also remain the same whether you choose to pay the MCA back in two months or a year. It consists of lump-sum payments and is repaid through the businesss future revenue. Because California law does not limit interest rates for most loans of $2,500 or more made by a licensed entity, merchant cash advance companies began obtaining California Finance Lenders Law, CFLL, licenses. Let us take the burden off of your shoulders. Your business can receive an MCA provided that you share a percentage of your debit card and credit card sales with the MCA provider. MCA providers base their reputation on the type of reviews and feedback they receive. You have put in countless time, effort and money. Twenty Three (23) year ago information about Merchant Cash Advance loans became available and publicly accessible. Merchant Cash Advance Attorneys. Fighting, Settling and Litigating for Merchants across California and the entire United States. Too often this thinking ends up making things worse for your business, with frozen business accounts, debt, liens, lawsuits and judgments. Also, the FTC alleges that defendants buried fees in the contracts without any language alerting consumers that the fees are withdrawn upfront., The FTC also claims that the defendants provide consumers with less than the total amount promised by withholding various fees ranging from several hundreds to tens of thousands of dollars prior to disbursement.. Merchant cash advance companies do not need to follow state usury laws which limit how much interest companies can charge on certain loans or credit cards. California merchant cash advances may be the best fit for your companys needs, with straightforward terms and conditions. Merchant cash advance companies look at the daily credit card receipts to determine if the business is capable of paying back the funds in a timely manner. Unfortunately, this is not how the system works. Our experts will review your information and contact you for further discussions. It seems pretty clear at this point that some type of government regulation will be required to oversee the online and alternative lending industry. Lenders typically refuse to release that lien until the debt is fully paid. 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. 1.1 Reconcile My MCA: Merchant Cash Agreement Attorney; 1.2 Merchant Cash Advance - The Lane Law Firm; 2 MCA Industry Attorneys | deBanked. Skip to content. If you are having trouble with repayment or an defaulted MCA, rely on our attorneys as the best option to get your money back. The merchant cash advance industry responded to the California lawsuits in multiple ways. Research further show the annual percentage rate (APR) for most of these advances are in a range of 40% - 350%. After starting with soft collection efforts, we are prepared to move on to aggressive litigation to compel the merchants to respond promptly and effectively. In California State there is no licensing requirement to become an MCA lender or broker! 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. The funds are then deposited into the business owners bank account for their use. Simplicity, faster access, and convenience are the three attributes used to describe the value of merchant cash advances. You must have a solid Internet connection for you to submit the required information. 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. We Offer Six Different Options and Access to a Nationwide Attorney Network. Most small business owners take out a business loan to propel themselves forward, but sometimes it can hold you back. 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. 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. All rights reserved. We are the better option for merchant cash advance companies to collect outstanding debts from merchant accounts. MCAs are not covered under the California Financing Law since they do not qualify as loans. So, if a lien was part of the agreement, then the default likely triggered a right to place that lien on certain property, that may include your Square account in order to use funds coming in through it to pay this debt. Some States are beginning to take a look at this, but at present no background checks, licensing, bond requirements or laws exist, to govern the creation of a Merchant Cash Advance funder and or broker. The California Financing Law (CFL) has historically been guiding licensing procedures for finance brokers and lenders. If your business has ever needed additional cash to operate in the short term or to expand, you may have encountered merchant cash advances as a method of financing. 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