A majority of MCA contracts require New York law as the choice of law for any dispute. Yes, and defaulting on Merchant Cash Advance Loans can be especially detrimental to a business and could result in lawsuits, judgments and liens from the lender as well as negative credit reporting. Once our initial review is complete and you have elected to retain our firm, your assigned litigator will begin to work with your lenders to secure a method and pathway to get you out of the vicious cycle you are presently in and most importantly, help to get you back control of your business and its cash flow. Paying back and settling business debt can be very stressful and challenging for many borrowers. Most lenders have a fixed amount that they recover from businesses whether the business is thriving or not. 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. When your business records higher credit card sales in a day, the amount collected by the MCA provider will be higher as well. Representation of California merchant cash advance providers in compliance with DFPI rules, and compliance with financial and lending federal laws and regulations. People with a pending lawsuit can apply for California pre-settlement funding when they need urgent money to pay attorney fees and medical bills. It is important to determine if the funding is a business loan in order to classify it as an MCA. You will want to know their factor rates, MCA limits, and holdback percentages as discussed below: MCA companies have limits to the amount of money they are willing to give your business as an advance. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. Because merchant cash advances are not deemed loans. 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. We understand this is a confusing and stressful time for you. 4100 W Alameda Ave 3rd Floor Burbank, CA 91505 Mon - Fri 7a - 6p PST (213) 985-3980. They do not fall under any state usury laws. . Merchant Cash Advance Attorney California. Since MCAs come unsecured, you will not have to give collateral to access them. Get the business funds you need so your company can survive, thrive, or grow. 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. Find out more about our merchant financing services in this article. How Long Has Merchant Cash Advance Been Around? If you have no option but to take out an MCA, it is in your best interest to understand what may be in the contract to better protect yourself from predatory lending. With us, you can have a quick merchant cash advance California without much hassle which you would otherwise face with bank loans. You may be required to switch to a new credit card processor if your MCA provider does not work with the previous one. Our firm has seen interest rates greater than 400% per annum. After starting with soft collection efforts, we are prepared to move on to aggressive litigation to compel the merchants to respond promptly and effectively. Call 800-961-8924 Apply Now Merchant Cash Advance in California is a form of financing that helps businesses get financing quickly and conveniently. Get answers to questions about merchant cash advance in California. Do NOT let a predatory loan disguised as a purchase of accounts receivables destroy your revenues and business with daily payments at predatory and abusive interest rates. It is not uncommon for merchants to default on their payments because of their previous poor line of credit. The Business Debt Law Group can help make arrangements with creditors and lenders for our clients to ensure that you make the necessary payments while also keeping your doors open. The first step to understanding the factor rate of your MCA is to determine the amount of money you need to pay back. Overall, this is a financing option that many businesses will take advantage of if they dont have a great credit score to get other types of financing from traditional banks. Advice concerning state and federal financial and lending laws. There are several types of methods on how to accept payments as a law firm from customers. Rapid Finance offers merchant cash advances in amounts up to $500,000 with factor rates starting at 1.22. 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 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. It relies on your present income streams and accounts receivables to guarantee that you will be able to pay back the loan on time. However, other types of businesses may seek them if they are currently not eligible for SBA express loans and need faster funding. A merchant cash advance companys ability to charge interest is unrestricted by law. 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. 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. A covered commercial financing transaction is an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing transaction. How Do You Qualify for a Merchant Cash Advance? Merchant Cash Advance Attorney in California. 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 . If youve received notice from your lender, you may be asking yourself what a. All rights reserved. }). We are here to help you any way we can. The provider will rely on this documentation to verify whether your annual credit card receipts indicate an adequate cash flow. 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. region: "na1", Our law firm has settled Merchant Cash Advance loans with virtually every funder, big to small, located in California or in a different State, large loan balances to small payoff amounts and everything in between, Grant Phillips law has seen it and settled it. Get faster access to capital. Further, in the case of merchant cash advance arrangements where a small business is required to submit a daily fixed amount, the small business typically has a right to reconcile their daily fixed payments to the businesss actual income with the effect that the small businesss daily payments would be reduced if the revenue of the small business has fallen. Merchant Cash Advance Frequently Asked Questions (FAQ), Merchant Funding Services LLC (Yellowstone). Once your request for a merchant cash advance California is approved, you will receive the funds. Merchant Cash Advance in California is a type of finance that assists businesses financially. Finally, the FTC also claims that defendants made threatening calls to consumers related to repayment of the advances. Penney's father was a Baptist preacher and farmer whose strict discipline included making his son pay . Nothing on this site should be taken as legal advice for any individual case or situation. NY Office 26 Broadway 3rd Floor New York, NY 10004 Home; About Us; Attorney Profiles; Contact us now. Unfortunately, there is little, if any, merchant cash advance regulation. Merchant Cash Advance Attorney California . Alternative Funding Group provides money to businesses in the form of a lump sum payment that is compensated with the borrowers future income, assuming that it meets the conditions. Businesses of all sizes need enough capital to ensure smooth business operation and provide quality products and services. The provider may require you to make daily repayment via your merchant account. If most of the reviews are positive, it may symbolize a good reputation. Wide Merchant Group offers business owners merchant financing solutions with fixed rates, minimal paperwork, and flexible payables. It consists of lump-sum payments and is repaid through the businesss future revenue. Call us today for a business loan at 800-630-4214 for a consultation on merchant cash advances or any of our financing programs. Within 24 hours of submitting your application, the MCA company may ask you to provide evidence of accepting credit cards in your business for at least two years. 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. MCAs are not covered under the California Financing Law since they do not qualify as loans. In 1998 a company called AdvanceMe (now called CAN Capital) pioneered the splitting of credit cards. You have put in time, money, equity, experience and knowledge into building your business. 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. Meanwhile, New Yorks legislature had also proposed a near-identical bill, but it did not pass. 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. Many times merchants are forced into a vicious MCA debt trap, having to get advance after advance because they cant afford to pay back the prior MCAs they received. Call our office 516.412.7622. Consider speaking with a representative of the MCA provider to know if there is an additional fee before seeking their financial help. Merchant cash advances are now said to generate $5 billion to $10 billion in loans every year. 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. You may think that you can then pay this loan off with the next job, sale or receivable that comes in, but this is not always a reliable or a realistic solution. The maximum advance amount for an MCA may range from $2500 to $250,000 depending on the financing company. The California Department of Business Oversight (DBO) recently published an Advisory Opinion regarding merchant cash advance contracts that states as follows: The Department of Business Oversight (DBO) expects that small businesses may struggle to make payments under existing loans or other financing products as a result of government- issued stay-at-home orders. 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. In California, is Merchant Cash Advance a CA Business Loan? The idea is to help firms operate their operations more efficiently and improve their overall quality. Global also represents MCA companies related to cash advance agreements regarding future receivable purchases, loans, residual purchases, or other financing agreements. The details filled in this form help the provider to assess your companys level of suitability. If you are experiencing merchant cash advance legal issues, if youve had a merchant cash advance breach of contract or if you need an MCA restructure to help with your cash flow call us today. Can Grant Phillips Law help me with my MCA positions? J. C. Penney was born on September 16, 1875, on a farm outside of Hamilton, Caldwell County, Missouri. Interestingly the new California Law refers to commercial financing, meaning the loan or financing is for a corporate / commercial purpose. In this article we will look at the current state of merchant cash advance regulation and recent trends in many states towards rectifying issues with advances. 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. This is called a holdback and it will continue until the advance is paid in full. Our firm has seen interest rates greater than 400% per annum. The provider expects a portion of sales generated from credit/debit card payments in return. Though MCA providers do not require a CFL license, they are mandated by the California Disclosure Law to make detailed and specific disclosures about their products. GPL, your California Merchant Cash Advance Attorneys. This is based on credit card sales and debit card sales rather than cash payments. If you need a Merchant Cash Advance Attorney California, contact our law firm. Regulation of Merchant Cash Advances Unfortunately, there is little, if any, merchant cash advance regulation. 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. Many people think that the aftermath of the financial crisis in 2008 is when merchant cash advances came to rise, but that is incorrect. However, the law does not require a funder to confirm the funds were in fact used for an actual commercial purpose. A merchant cash advance attorney will look at the structure of your agreement to determine if the advance was, in fact, an actual advance against future receivables or rather, an illegal usurious loan. Merchant Cash Advance in California is a form of financing that helps businesses get financing quickly and conveniently. Call us today for a business loan at 800-630-4214 for a consultation on merchant cash advances or any of our financing programs. 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. Additionally, a credit check may be required in order to qualify. However, the Uniform Commercial Code does not regulate interest rates. Unfortunately, very few protections, if any, exist for people who take out one of these advances, though there have been some recently proposed legislation on the state and federal level that may soon change this lack. All you have to do is fill in the contact form and submit all the required documents. Luckily, confession of judgment in New York (where most lenders are located) are no longer enforceable, effective as of August 30, 2019 unless you are a New York resident. 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 CFL generally covers both consumer and commercial lenders. 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. Additionally, your company needs minimal revenue of $90,000 annually or $7,500 for the last three months. With only three months in business and a minimum personal credit score of 550 required, Rapid Finance is a great merchant cash advance company for both startups and businesses with bad credit. . Hiring merchant cash advance attorneys before your debt problems grow worse will ultimately save you from a potential future bankruptcy. A company that specializes in debt reduction or restructuring may be able to aid a business that is having trouble making MCA payments. 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. In the absence of government oversight or regulation, many debtor merchants have looked to the courts for relief. Your payback amount will always be determined by the factor rate set by the MCA provider. The payments and interest may become too high for you to handle on your own. There are also major investment banks like Morgan Stanley backing several funders and hedge funds. The most common methods include credit and debit card processing, electronic funds transfer (EFT), and automated clearing house (ACH) transactions. By negotiating new terms with the creditors, our company might be able to assist the company in creating a strategy to manage its debt. There is never a cost to speak with us and all attorney consultations are always complimentary. 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. When you record lower credit card sales, the amount collected will be smaller. Small business owners occasionally require additional operating capital to effectively run their businesses. Lenders typically refuse to release that lien until the debt is fully paid. Require a merchant cash advance attorney in California? Looking for different sources of financing is an excellent way to help sustain your business, especially in the case of potential downfalls. Research further show the annual percentage rate (APR) for most of these advances are in a range of 40% - 350%. 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. Leslie H. Tayne, Esq. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. Business Debt Relief - Done Right! The payments can then be paid back in a specified time frame. Just recently, for instance, Greenbox Capital suspended the use of COJs indefinitely, in response to the heightened industry wide debate over their use. (CFL). This legislation was amended to remedy the extreme abuses that were taking place by merchant cash advance companies. MCA's are not considered a loan and there is no federal oversight of the advances. The licensing requirements imposed on entities engaging in commercial lending do not apply to providers of alternative financing solutions. Return home. Globals experience coupled with its team of nationwide litigators and seizure experts allows Global an extreme advantage to help your company recoup losses. Unfortunately, this is not how the system works. Fraud, for instance, is actionable. A quick and easy way for small business to obtain funds, merchant cash advances have shown to have high interest rates and unsustainable repayment schedules. regulation that these businesses are subject to. A law firm focusing on settling Merchant Cash Advance loans for clientsacross all 50 States. Our attorneys are here to help you. If you have a stable cash flow, it may take you a shorter time to pay back the cash advance. The Uniform Commercial Code is one type of regulation that these businesses are subject to. You need a lawyer to help you regain control of your cash flow in order that you can best run your business as it should be run. 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. Specifically,an individual by the name of Barbara S. Johnson is listed as the officialinventor of split-funding, a system that allows for automatic loan repayment to the funders from a single credit card processor shared with the Merchant. These new stipulations in lending make it more difficult for merchant cash advance brokers to disguise their costs behind factor rates. DISCLAIMER: The information on this website is for general information purposes only. MCA lenders are quick to bring lawsuits against borrowers who default on payments, so it is important to seek legal counsel immediately if you have defaulted or believe you will default on a payment. 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. Merchant Cash advances are typically quick to acquire and do not require a good credit score or collateral. Merchant cash advances are now said to generate $5 billion to $10 billion in loans every year. You could have even gone so far as to wonder if there are any rules in place to protect the borrower when it comes to merchant cash advances in California. whether it has the same impact on credit ratings. 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. If you repay the advance agreed upon in twelve months, your APR would likely be closer to 30%. 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. 1.1 Reconcile My MCA: Merchant Cash Agreement Attorney; 1.2 Merchant Cash Advance - The Lane Law Firm; 2 MCA Industry Attorneys | deBanked. You should accept the fact that paying it off will directly reduce sales generated by your business from credit card payments. SB 1235 was passed by the California Senate and Assembly on 31st August, 2018, and Governor Jerry Brown signed and approved it into law on September 30, 2018. Yes, Grant Phillips Law has successfully negotiated settlements with most of the Merchant Cash Advance funders existing throughout the United States. The 52-page document is the result [] Your first step to getting an MCA is by filling out an application with a relevant provider. 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. The MCA company also looks at how long the merchant has been in business for and what industry they are in. A specialized Merchant Cash Advance Law Firm, serving residents of California. Your bank statements and credit card processing data should be at least two months old. Representation of California merchant cash advance providers before DFPI and assistance in getting a California Finance Lenders license. In California State there is no licensing requirement to become an MCA lender or broker! 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. Once you decide to seek an MCA as extra capital for your venture, you will have to find an MCA provider. 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. A holdback percentage determines the amount of money an MCA company will subtract from your daily credit card sales. As key players in this industry, the Wide Merchant Group offers convenient, simple and quick financing programs for various business purposes in Los Angeles, California. Alternative Funding Group offers an MCA in California to a business that needs a lump sum of capital to move ahead. If you have a merchant cash agreement and the situation with your business profits has changed, contact our attorneys to help negotiate on your behalf! You have worked exceedingly hard to build your business. 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. . portalId: "20208004", 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. On average, the repayment term for an MCA ranges from eight to nine months. There are a number of other funding methods and loans available to business owners that are less risky. For answers to these questions and any other you may have, dont hesitate to contact the Merchant Cash Advance California attorneys at Grant Phillips Law, PLLC. Call us today to review your businesss hardship or pending lawsuit. Even after applying for a conventional loan, you may fail to meet the requirements designed to favor large businesses. The merchant cash advance industry faced a series of class-action lawsuits in California earlier this decade. This is considered a Merchant Cash Advance. California Merchant Cash Advance is not considered a business loan. The primary allegations by the FTC concerning marketing relate to misleading claims. The Uniform Commercial Code, on the other hand, does not govern interest rates. Most business cash-advances require a daily repayment which can become challenging if the business experiences financial distress. Unlike a conventional term loan, you will not incur fines for late payments or be mandated to make payments on time. 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. 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. You may expect to receive more phone calls from brokers trying to get you to take out more 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%. We understand the stressful time you may be going through. The following is asample listof many of the funders Grant Phillips Law have negotiated with successfully. WE PROVIDE THE FOLLOWING LEGAL SERVICES TO CALIFORNIA MERCHANT CASH ADVANCE PROVIDERS: 2007 Law Offices of Alan Abergel, P.C. A confession of judgment takes away your right to defend yourself before a judge if you default or stop paying your merchant cash advance. 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. state and federal financial laws and regulations. A merchant cash advance stands as a type of loan that allows businesses to quickly access capital for business. You may also seek it if you have a limited business history. *Images used are not employees of the law firm*, settle your merchant cash advance loans for less than what you owe. Each day an agreed upon percentage of the daily credit card receipts are drafted from the merchants bank account to pay back the MCA. 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. Instead of lending an amount of money over a period, a Merchant Cash Advance company will purchase your company's future receivables coming into your merchant account. Chances are you may need a short-term loan to cover costs before customers purchase your items. Depending on the type of MCA you are seeking, the cash advance may take a toll on your cash flow.
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