California’s new commercial financing disclosure regulations became effective on December 9, 2022. The new rules, proposed by the Department of Financial Protection and Innovation (DFPI), extend consumer-like protections to small businesses seeking commercial financing. Let’s look at the new disclosure requirements and how they impact merchant cash advance (MCA) providers.  Commercial Transactions Impacted By California’s […]

Business owners often need quick access to working capital to cover payroll, expand their businesses, or pay unexpected expenses. Merchant cash advances may be a solution to cash flow shortages, but there are risks, not the least of which is defaulting. A merchant cash advance (MCA) is a financing agreement in which a percentage of […]

Running a franchise can be lucrative if you have steady sales and access to working capital. While a merchant cash advance can help your franchise make payroll, acquire inventory, and cover expenses, expected and unexpected, there are risks. Let’s discuss whether or not your franchise should take a merchant cash advance (MCA). How MCAs Help […]

Back in February, we reported DoorDash was set to offer merchant cash advances (here). Not to be outdone, Amazon recently announced it was getting into the merchant cash advance (MCA) market. These developments indicate the MCA business is swiftly moving online.  Whether lawmakers and regulators will be able to keep pace remains to be seen. […]

A merchant cash advance (MCA) is not a loan but the purchase and sale of future receivables in exchange for an upfront, lump-sum cash advance. Federal and state consumer laws do not strictly regulate these alternative funding products. These laws only cover natural persons and loans for personal or household purposes, such as credit cards […]

In October, a US District Court judge ruled that merchant cash advance (MCA) agreements barring small businesses from participating in class-action lawsuits may violate New York’s lending laws. This case highlights the increased scrutiny of merchant cash advances by federal regulators, state lawmakers, and the courts. The Backdrop In February, several businesses filed a racketeering […]

Long-term loans such as bank loans may not be the best option for medical practices. Today, more and more medical professionals are considering short-term funding options, such as lines of credit, invoice factoring, and merchant cash advances. Let’s look at the benefits and risks of each funding option. Business Lines of Credit Lines of credit […]

In August, a federal grand jury indicted 6 Louisiana men on charges of conspiring to commit wire fraud and money laundering by creating shell companies to defraud a merchant cash advance (MCA) provider.  The Backdrop Federal prosecutors said in the indictments the defendants conspired to use several shell Louisiana companies with no assets to defraud […]

A recent report indicates the global merchant cash advance (MCA) market will grow at a compound annual growth rate (CAGR) of approximately 6 percent from 2022 to 2032. This report highlights the strength of the MCA market but skirts around the risks of merchant cash advances and the consequences of defaulting on an MCA agreement.  […]

Having cash on hand is critical for small businesses, especially during this time of high inflation and rising interest rates. Securing funding is more challenging, however, as lenders have tightened their credit criteria in response to recent moves by the Federal Reserve.  Most recently, the Fed raised a key lending rate by 75 basis points […]