man receiving MCA

Does the CFPB Have Merchant Cash Advances on its Radar?

The Consumer Finance Protection Bureau (CFPB)  intends to prioritize enforcement of federal lending laws protecting small business owners from unfair and discriminatory practices by banks, non-banks, and potentially alternative finance companies.  The Dodd-Frank Act of 2010, which established the CFPB, included a provision that amended the Equal Credit Opportunity Act (ECOA) to mandate reporting requirements […]

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MCAs

What You Need to Know About MCAs and Personal Guarantees

A merchant cash advance (MCA) provides a cash-strapped small business with quick access to working capital. These alternative funding products carry more lenient credit criteria than traditional business loans and are often pitched with “no collateral required.”  In reality, MCA agreements often include onerous provisions such as a Confession of Judgment and a personal guarantee […]

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signed business contract

New Disclosure Requirements Coming for MCA Providers in New York

In December 2020, New York Governor Andrew Cuomo signed legislation amending the New York Financial Services Law by requiring non-banks, including merchant cash advance companies, to provide small businesses with disclosures similar to those required under the Truth-in-Lending Act (TILA).  The new disclosure requirement, which becomes effective on June, 21 2021, is an indication that […]

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merchant cash advance

Looking for Merchant Cash Advance Regulation

Unlike consumer loans (e.g. auto loans, mortgages) that are regulated by state and federal laws, merchant cash advances are generally unregulated funding products. With limited legal protection to fall back on, a small business can quickly find itself in jeopardy for defaulting on a cash advance repayment.  If you are struggling under the terms of […]

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woman calculating her business expenses

What’s The Difference Between a Merchant Cash Advance and a Business Loan?

Today, many small businesses that do not qualify for traditional business loans are turning to alternative sources of funding, such as merchant cash advances. There are significant differences between these funding products, however, and understanding them is crucial to choosing the right option for your business.  If your business is already struggling under the terms […]

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man reviewing confession of judgment

In Focus: Confession of Judgments

Over the past few years, it has become increasingly common for merchant cash advance providers and other high-risk business lenders to include a clause in commercial financing products called a Confession of Judgment (COJ). By utilizing a COJ, a funder can avoid a lengthy legal process and quickly move to seize the business’s assets in […]

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restaurant

How To Get Out of Merchant Cash Advance Debt

For new businesses that do not have a credit history and access to traditional sources of funding, one alternative is a merchant cash advance. Given that MCA providers take a significant portion of a company’s daily profit to recoup the advance, businesses often face cash flow shortfalls and are unable to continue operating. If your […]

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couple receiving merchant cash advance

The Pros and Cons of Merchant Cash Advances

Small businesses often need quick access to working capital for purchasing new equipment, meeting payroll, or making repairs. For those that do not have access to traditional sources of funding, one attractive option is a merchant cash advance (MCA). This article is a brief discussion of the pros and cons of a merchant cash advance. […]

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