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. You would assume that if your business is slow, the daily and weekly payments would reflect the revenue of the business. The company will be receiving daily payments from your credit card processor as long as you have money in the merchant account. 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. 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. This legislation was amended to remedy the extreme abuses that were taking place by merchant cash advance companies. 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. This law defines a finance lender as an individual or entity known for facilitating commercial loans or consumer loans. 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. Because merchant cash advances are not deemed loans, they are not subject to any regulations. A factor rate helps to express the interest amount an MCA provider can charge on your advance. Later her company would become CAN Capital. Many companies added language to their contracts similar to the following provision that Advance Me agreed to, to include as part of its settlement of the California class action: Buyer, seller and principals acknowledge and agree that seller going bankrupt or going out of business, in and of itself, does not constitute a breach of the seller contractual covenants. Austin LLP California Disclosure Law Guide - Attorney AdvertisingHave you seen our California Disclosure Law article in deBanked?https://debanked.com/2022/12. 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. . This information is not intended to create, and receipt of viewing does not constitute, an attorney client relationship. Getting a merchant cash advance California from Panthera Financial will not only provide you with the best services but reliability as well. We do not represent consumers. On average, the repayment term for an MCA ranges from eight to nine months. Only with these things, you are ready to get merchant cash advance loans. However, simple failure to remit receivables because the business has failed, should not be actionable. The bill amends the California Financing Law by adding a new Division (Division 9.5). 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. But is Merchant Cash Advance legal in California? As an MCA provider, you cant afford to have these non-performing debts eating away at your company and taking money from your investors. DISCLAIMER: The information on this website is for general information purposes only. Because merchant cash advances are not deemed loans, they are not subject to any regulations. 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. 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. Grant Phillips Law focuses exclusively on Merchant Cash Advance law protecting merchants and borrowers. Leslie H. Tayne, Esq. This can be a debt-trap for many small business owners. 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. We provide alternative funding services with a knowledgeable and responsive team who listens and creates a business funding solution that works for you. You have put in time, money, equity, experience and knowledge into building your business. 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. Merchant Cash Advance Attorney in California. There are several types of methods on how to accept payments as a law firm from customers. Merchant Cash Advance Attorneys. Since MCAs come unsecured, you will not have to give collateral to access them. Your payback amount will always be determined by the factor rate set by the MCA provider. 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. The DBO encourages small businesses to review the terms of their existing financing products to determine whether they may be entitled to relief and report finance companies that fail to honor contractual terms that provide relief. It is not uncommon for merchants to default on their payments because of their previous poor line of credit. 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. Certain considerations have been used in recent cases examining whether merchant cash advance agreements are sales or loans, determining whether the transaction provides for absolute or dependent payback. The process to receive the advance is a fairly quick process and it is not a credit driven approval. Call us today to review your businesss hardship or pending lawsuit. Merchant cash advances are now said to generate $5 billion to $10 billion in loans every year. Did you receive a merchant cash advance breach of contract lawsuit? They do not fall under any state usury laws. Along with similar claims and allegations advanced by the FTC, the New York AG contends that defendants disguise each loan as a Purchase and Sale of Future Receivables, but in reality, the transactions are loans.. Did you receive a merchant cash advance breach of contract lawsuit? Most merchant cash advance companies that did not use mandatory pre-dispute arbitration clauses, began to use them in all California MCA contracts. The details filled in this form help the provider to assess your companys level of suitability. 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. However, what may have been characterized by the lender as a factoring relationship was, in fact, an unregulated loan. Get faster access to capital. While considering this option, you may have asked yourself what the difference is between alternative financing and traditional loans or questioned whether it affects credit scores the same way. Contact Us:-GRANT PHILLIPS LAW, PLLC [email protected] 516.670.5165 How Long Has Merchant Cash Advance Been Around? Once you fill it out, the provider will reach out to you asking for further documentation. 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. 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. Are you having merchant cash advance legal issues? The provider expects a portion of sales generated from credit/debit card payments in return. 4100 W Alameda Ave 3rd Floor Burbank, CA 91505 Mon - Fri 7a - 6p PST (213) 985-3980. In particular, the New York AGs complaint related to recharacterization of merchant cash advances as loans provides significant guidance for not only the drafting of the MCA agreement, but also the underwriting and marketing of the MCA. You may need new equipment, additional inventory or maybe you just need to cover payroll. Let us review your MCA contract for illegalities. With over 60 years combined experience we are well prepared to handle your case. Need help with any type of legal issue? Sorry, the comment form is closed at this time. The one type of regulation these companies fall under is from the Uniform Commercial Code. You may be surprised to learn of your extremely high actual interest rate, costs and fees. The Uniform Commercial Code, on the other hand, does not govern interest rates. Other documents you need for the application include business tax returns, voided business check, and a driver's license. The New Jersey State legislature strengthened its Confession of Judgment bill by adding language that grants the Attorney General power to enforce monetary penalties against violators. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. Merchant Cash Advance in California is a type of finance that assists businesses financially. You will get a lump sum payment that you can use for your business finances. In California State there is no licensing requirement to become an MCA lender or broker! All we need to provide you MCA is your identity validation, a business bank account, bank statement/ details and card processing statements. 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. Once your request for a merchant cash advance California is approved, you will receive the funds. 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. Merchant Cash Advance Attorneys. Merchant cash advances can be very expensive. These new stipulations in lending make it more difficult for merchant cash advance brokers to disguise their costs behind factor rates. Need a lawyer with Merchant Cash Advance and/or online lending specific knowledge? The money may come quickly, but what small business owners do not realize is that they may be setting themselves up for potential bankruptcy. If merchant cash advance regulation happens in the future, it will likely be to require rate disclosures, rate limitations, and other measures to prevent predatory lending. In Clark v. Advance Me Incorporated., case number 2:08-CV-03540, Advance Me paid $11.5M to settle the allegations and agreed to implement measures to protect merchants when their receivables fell short for legitimate reasons. 10 years of experience fighting, settling and litigating Merchant Cash Advance loans. 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. You will have the initial amount deposited directly into your business bank account. 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. A collection agent may have reached out to you, to demand that you pay the full balance of the alleged debt. How Fast Can I Be Approved for an MCA in California? Global Legal Merchant Cash Advance Collections and Litigation. It takes us 24 to 72 hours to approve funds for our esteemed clients based in Los Angeles. The application process is as follows: MCA providers usually offer potential and existing clients a one or two-page form for MCA applications. Unlike interest rates, which change as your debt reduces, factor rates are only imposed on the original cash advance amount. Do you have a merchant cash advance you are struggling to pay? We have saved our clients millions of dollars. Fraud, for instance, is actionable. The CFL applies to both consumer and commercial lenders, requiring licensing and disclosure as well as interest and fee caps on some loans. region: "na1", A simple consultation can answer all your questions and help you get your cash flow back where it needs to be. MCA providers consider your credit card processing statements and bank statements for your business to determine a factor rate for your MCA. The types of law firm payment processing. With us, you can have a quick merchant cash advance California without much hassle which you would otherwise face with bank loans. Both finance lenders and brokers require licenses to operate in California. In a typical merchant cash advance, lenders and borrowers agree to a daily or weekly payback system and in return, the lender receives a percentage of sales or receipts from the borrowers. This information is then compiled and sold to other MCA funders who will try to get you to stack your advances which will, in most cases, only place your livelihood at greater risk and further in debt. Are you having merchant cash advance legal issues? Global also represents MCA companies related to cash advance agreements regarding future receivable purchases, loans, residual purchases, or other financing agreements. A merchant cash advance provides small business owners quick access to capital for emergencies and all types of business needs. 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. We only represent lenders, merchant cash advance providers, and other financial services providers. The one type of regulation these companies fall under is from the Uniform Commercial Code. MCA providers base their reputation on the type of reviews and feedback they receive. 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. 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. 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. Fighting, Settling and Litigating for Merchants across California and the entire United States. The merchant cash advance industry responded to the California lawsuits in multiple ways. Contact us today with any legal questions regarding alternative finance! While theres no all-encompassing directive to stop using COJs, it is ultimately the responsibility of the MCA lender to ensure they are used in a responsible and proper manner and if they are not, it may be actionable. If most of the reviews are positive, it may symbolize a good reputation. 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. Our firm has seen interest rates greater than 400% per annum. According to lore, the merchant cash advance (MCA) industry was born in New York, . Knowledge of the cost of a merchant cash advance is crucial to your business if you are considering this financing option. 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. The bill adds a new Division (Division 9.5) to the California Financing Law (CFL). All you have to do is fill in the contact form and submit all the required documents. 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. hbspt.forms.create({ These cases are a threat to the MCA sector, and they provide insight into the types of claims that state and federal regulators will file against MCA firms in the future. It is a lump sum of money that you can use toward future sales. It feeds you, supports your family, creates jobs and as such is worth fighting for. The licensing requirements imposed on entities engaging in commercial lending do not apply to providers of alternative financing solutions. 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%. Call 800-961-8924 Apply Now 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 businesses. Home; Consequences of Defaulting; . Your MCA provider will take payments for the cash advance directly from the merchant credit account belonging to your business. The CFL generally covers both consumer and commercial lenders, imposing licensing and disclosure requirements and interest and fee limitations on certain loans. The problem with most conventional financing options is that they take time and have strict measures. }). Nevertheless the law does require a funder offering a form of commercial financing, of $500,000 or less to a merchant / borrower, must now provide the Merchant with a Cost Disclosure Statementbeforecompleting the transaction. However, other types of businesses may seek them if they are currently not eligible for SBA express loans and need faster funding. Skip to content. Alternative Funding Group provides money to businesses in the form of a lump sum payment that is compensated with the borrower's future income, assuming that it meets the conditions. Call us today for a business loan at 800-630-4214 for a consultation on merchant cash advances or any of our financing programs. 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. Lets settle your Merchant Cash Advance loan with your MCA Funder. Business Debt Relief - Done Right! So don't delay; secure your working capital today. In 1998 a company called AdvanceMe (now called CAN Capital) pioneered the splitting of credit cards. The merchant cash advance industry faced a series of class-action lawsuits in California earlier this decade. Unlike a traditional loan, you can pay back an MCA as you begin to make sales. Generally, you will pay back the MCA by remitting a percentage of your total sales from your business bank account. 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. Representation in investigations, inspections, and audits by. If you are operating as a lender and a business owner cant repay their MCA on time, that is when you may want to seek legal action. 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. Twenty Three (23) year ago information about Merchant Cash Advance loans became available and publicly accessible. 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. Additionally, your company needs minimal revenue of $90,000 annually or $7,500 for the last three months. 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. Merchant Cash Advance Attorney California Here for you and your business. 516.670.5165www.grantphillipslaw.com. Your business can receive an MCA provided that you share a percentage of your debit card and credit card sales with the MCA provider. A holdback refers to the amount of money kept in reserve by an MCA provider until you meet various conditions. There are a number of other funding methods and loans available to business owners that are less risky. These alternative solutions include merchant cash advances and factoring. We will be able to tell you what your options are as well as answer any questions about the differences between a MCA consolidation vs MCA attorney. Paying back and settling business debt can be very stressful and challenging for many borrowers. 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 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. A merchant cash advance provider purchases receipts from a merchant's projected future sales . It will also remain the same whether you choose to pay the MCA back in two months or a year. Too often this thinking ends up making things worse for your business, with frozen business accounts, debt, liens, lawsuits and judgments. However, the Uniform Commercial Code does not regulate interest rates. Prior results do not guarantee a similar outcome. Right before the financial crisis when the split-finding patent was invalidated, companies began to focus solely on funding advances. We help business owners find solutions. While contemplating this option, you may have wondered what the difference is between alternative financing and regular loans or whether it has the same impact on credit ratings. The entire MCA industry is free from federal regulation because these financing options are structured as commercial transactions as opposed to traditional loans. Contact us now. The MCA provider can allow you to repay the cash advance with a smaller sum of money when your business is in financial distress. (CFL). Rapid Finance. Simply fill out the form below and we'll be in touch shortly. Do you have more than one merchant cash advance? Every cent received as a cash advance will be deducted from your credit card sales. 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. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. Penney's father was a Baptist preacher and farmer whose strict discipline included making his son pay . Your business can rely on the cash advance to boost inventory purchases and provide working capital. Globals experience coupled with its team of nationwide litigators and seizure experts allows Global an extreme advantage to help your company recoup losses. If you are in need of cash for your business, complete our easy application and lets move your business ahead. 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. A UCC lien is an actual lien on non-real property (e.g., bank accounts, personal property like business equipment, etc.). Grant Phillips Law, your Merchant Cash Advance Attorneys California. Merchant cash advances are suitable for businesses looking for short-term financing but have cyclical or seasonal revenues. If you repay the advance agreed upon in twelve months, your APR would likely be closer to 30%. Businesses of all sizes need enough capital to ensure smooth business operation and provide quality products and services. Our firm has seen interest rates greater than 400% per annum. 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. A merchant cash advance (MCA) is a business financing option where you typically get a lump sum of money in exchange for a percentage of your future debit or credit card sales or income. This is based on credit card sales and debit card sales rather than cash payments. The California Financing Law (CFL) has historically been guiding licensing procedures for finance brokers and lenders. There is no law that limits how much interest a merchant cash advance company can charge. Let us take the burden off of your shoulders. 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. 10 years and counting. Thus, it has been a popular choice for business owners seeking to assist or expand their businesses. Grant Phillips Law PLLC offers MCA attorneys for your grievances. Her Patented technology allowingfor the splitting of credit card sales was a major step in the birth and growth of the MCA world.
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