Though it may be time-consuming to make the changes, setting up the account is a prerequisite for accepting a cash advance. Well need to see the last three bank statements too! 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. 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. 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. You may be surprised to learn of your extremely high actual interest rate, costs and fees. We are the better option for merchant cash advance companies to collect outstanding debts from merchant accounts. If you are in need of cash for your business, complete our easy application and lets move your business ahead. Too often this thinking ends up making things worse for your business, with frozen business accounts, debt, liens, lawsuits and judgments. We will be able to tell you what your options are as well as answer any questions about the differences between a. Your choice depends on the amount your business needs to recover from a particular financial hurdle. The life of this loan is also much shorter than a normal remittance which can end up causing problems if the borrower is not prepared to pay back the money during that agreed-upon time. Do you have a merchant cash advance you are struggling to pay? They don't work the same as a traditional loans, which provides a lump-sum disbursement that you pay back in fixed installments over several years. You may also seek it if you have a limited business history. Find out more about our merchant financing services in this article. A merchant cash advance provides small business owners quick access to capital for emergencies and all types of business needs. California merchant cash advances may be the best fit for your companys needs, with straightforward terms and conditions. If approved, the lender will also provide the terms and conditions. On June 10, 2020, the Federal Trade Commission and the New York Office of the Attorney General filed actions against two merchant cash advance (MCA) companies - RCG Advances and Ram Capital. Can Grant Phillips Law help me with my MCA positions? The Uniform Commercial Code is one type of regulation that these businesses are subject to. 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. 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. The California Financing Law (CFL) has historically been guiding licensing procedures for finance brokers and lenders. Some examples include Shopify, Square, PayPal and even American Express. Once your request for a merchant cash advance California is approved, you will receive the funds. 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. 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. 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. Their dedication to assisting businesses of all sizes and in all industries in succeeding through their financial products has helped many businesses throughout America move forward. Get the business funds you need so your company can survive, thrive, or grow. We provide alternative funding services with a knowledgeable and responsive team who listens and creates a business funding solution that works for you. It is easier to obtain a merchant cash advance than applying for a bank loan. 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. New Jerseys COJ bill is similar to the bill advancing through the House of Representatives at the federal level. MCA providers have attractive eligibility standards, which make it easy for most small enterprises to qualify. A collection agent may have reached out to you, to demand that you pay the full balance of the alleged debt. Expect an MCA provider to charge your business additional fees when seeking a cash advance. Does Grant Phillips Law obtain a formal Stipulation of Settlement Agreement documenting the settlement? Advice concerning state and federal financial and lending laws. What is Merchant Cash Advance in California? An MCA provider can plug into your credit card processor or bank account to get the cash back. Rapid Finance offers merchant cash advances in amounts up to $500,000 with factor rates starting at 1.22. 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. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. Merchant cash advances are now said to generate $5 billion to $10 billion in loans every year. Many indebted merchants have turned to the courts for help in the absence of government monitoring or regulation. Your Merchant Cash Advance Attorneys California to preserve your legal rights, enforce those rights and protect you and your business. 322 Encinitas Boulevard, Suite 200 Encinitas, CA 92024. MCAs are not considered a loan and there is no federal oversight of the advances. They do not fall under any state usury laws. 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. The repayment term varies since the payments are based on the percentage of revenue of your daily credit card sales. Grant Phillips Law focuses exclusively on Merchant Cash Advance law protecting merchants and borrowers. When your business records higher credit card sales in a day, the amount collected by the MCA provider will be higher as well. 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. 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. 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. A merchant cash advance is an unconventional finance product where a business is given a near-instant cash advance in exchange for repayment from future sales. 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. 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. 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. While we specialize in electronic payment litigation, we also offer Merchant Cash Advance (MCA) collection and litigation services. There are also major investment banks like Morgan Stanley backing several funders and hedge funds. MCA providers use this information to determine the factor rate needed to compensate for the risk of giving you an advance. Let us take the stress and sleepless nights away and help you get your business back on track. Looking for different sources of financing is an excellent way to help sustain your business, especially in the case of potential downfalls. Both the FTC and the New York AG assert several claims against the defendants related to the marketing, offering, and collecting of MCA. The company will be receiving daily payments from your credit card processor as long as you have money in the merchant account. 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. 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. It feeds you, supports your family, creates jobs and as such is worth fighting for. As a small business, you are constantly buying and selling inventory. A merchant cash advance stands as a type of loan that allows businesses to quickly access capital for business. Home. Interest rates are designed to accrue over time while factor rates are not affected by the time taken to repay a merchant cash advance. 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. 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. Let us review your MCA contract for illegalities. In time, many feel that the CFL will require Merchant Cash Advance funders to be licensed. Merchant Cash Advance Attorney California. You may be surprised to learn of your extremely high actual interest rate, costs and fees. Defaulting on the repayment commitment can cause the borrower to be default in their agreement with the merchant cash advance lender, and ultimately the business could be subject to adverse credit reporting as well as a lawsuit from the cash advance funding company. 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. 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. Both finance lenders and brokers require licenses to operate in California. Founder & Managing Partner - Grant Phillips Law, PLLC - MERCHANT CASH ADVANCE SETTLEMENT ATTORNEY Long Beach, New York, United States 653 followers 500+ connections California Merchant Cash Advance is not considered a business loan. Information about your business becomes public record after a lien has been placed against you. Copyright 2022 | Created by Klever Media|All Rights Reserved|Berkovitch & Bouskila, PLLC, you may have wondered what the difference is between alternative financing. On average, the repayment term for an MCA ranges from eight to nine months. Skip to content. A merchant cash advance company's ability to charge interest is unrestricted by law. Are you having merchant cash advance legal issues? A higher holdback percentage translates to a higher payback amount. Simplicity, faster access, and convenience are the three attributes used to describe the value of merchant cash advances. It could put you out of business. The public has until April 26th to submit any comments on the amended portions of the proposed rules. However, there are some extra strings attached when you go with a merchant cash advance. The money is usually a percentage of your debit card or credit card sales withheld by an MCA provider to settle a cash advance. Here is a list of attorneys with experience in the industry: Contracts & corporate services Hudson Cook, LLP | Nationwide California Law and Lenders/Brokers Licensing The Law Offices of Paul A. Rianda | California Collections Counsel and General Counsel services There are several types of methods on how to accept payments as a law firm from customers. Contact the Attorneys atGrant PhillipsLaw, PLLC. Merchants sign an agreement that outlines the advance amount, payback amount, holdback and the term of the advance. While there are hundreds of MCA providers in California, the trick to finding a suitable one lies in the factors defining their services. 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. 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. Global will tailor its services, collection, lawsuit, enforcement, and liquidation to your needs. For example a borrower from California takes out an MCA from a New York based MCA funder, that funder cannot issue the California based borrowing merchant a Confession of Judgment / COJ. Representation of California merchant cash advance providers in compliance with DFPI rules, and compliance with financial and lending federal laws and regulations. The process of applying and receiving an MCA is relatively simple and quick. Merchant Cash Advance Attorney California Here for you and your business. You will also have to pay a fee for the service. 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. 1. In California State there is no licensing requirement to become an MCA lender or broker! Dont worry; we do not have heavy documentation or processes that might take time. In the absence of government oversight or regulation, many debtor merchants have looked to the courts for relief. There is never a cost to speak with us and all attorney consultations are always complimentary. Have you been striving to leverage the benefit of a short-term opportunity but falling short of finances? Our firm has seen interest rates greater than 400% per annum. 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. 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 providers cost disclosure must specify the amount financed, the total dollar cost, the term or estimated term, the method, frequency, and amount of payments, a description of prepayment policies, and the total cost of the financing expressed as an annualized rate. Lenders typically refuse to release that lien until the debt is fully paid. }). Merchant cash advances are suitable for businesses looking for short-term financing but have cyclical or seasonal revenues. A holdback percentage determines the amount of money an MCA company will subtract from your daily credit card sales. A law firm focusing on settling Merchant Cash Advance loans for clientsacross all 50 States. Before you have any bank accounts frozen or garnished, UCC liens filed against merchant processors/vendors, or you have a lengthy lawsuit filed against you that you would have to spend countless hours and money on, call us today for a complimentary consultation with an experienced business debt attorney. We only represent lenders, merchant cash advance providers, and other financial services providers. 10 years of experience fighting, settling and litigating Merchant Cash Advance loans. We offer quick assistance to you. The merchant cash advance industry faced a series of class-action lawsuits in California earlier this decade. Consider speaking with a representative of the MCA provider to know if there is an additional fee before seeking their financial help. You deserve to know what options you have. 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. Our service is designed for businesses needing quick capital. Depending on the type of MCA you are seeking, the cash advance may take a toll on your cash flow. 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. The payments and interest may become too high for you to handle on your own. 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. Twenty Three (23) year ago information about Merchant Cash Advance loans became available and publicly accessible. This allows these MCA providers a great deal of leeway to operate in some less than ethical ways to circumvent regulations and laws that traditional lenders must follow. How Do You Qualify for a Merchant Cash Advance? This can be any amount from a thousand dollars to hundreds of thousands of dollars. THE LAW OFFICES OF ALAN ABERGEL, P.C. If you have a stable cash flow, it may take you a shorter time to pay back the cash advance. Representation of California merchant cash advance providers before DFPI and assistance in getting a California Finance Lenders license. In this case, reputation stems from issuing clients with attractive merchant cash advance options. 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. All rights reserved. This legislation was amended to remedy the extreme abuses that were taking place by merchant cash advance companies. An MCA could be an ideal solution to financing problems experienced by your business if you have a low credit score or little/no collateral. 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. While the repayment term of merchant cash advances varies, you may expect to pay your MCA in a maximum term or 12 or 24 months. We have an easy and quick process of providing MCA to our clients. Global Legal Law Firm doesnt just talk a big game, we actually deliver. Getting a merchant cash advance California from Panthera Financial will not only provide you with the best services but reliability as well. 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. The CFL applies to both consumer and commercial lenders, requiring licensing and disclosure as well as interest and fee caps on some loans. Every cent received as a cash advance will be deducted from your credit card sales. 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