So don't delay; secure your working capital today. A merchant cash advance stands as a type of loan that allows businesses to quickly access capital for business. We offer quick assistance to you. 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. In this case, reputation stems from issuing clients with attractive merchant cash advance options. Yes, Grant Phillips Law has successfully negotiated settlements with most of the Merchant Cash Advance funders existing throughout the United States. 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. Global will tailor its services, collection, lawsuit, enforcement, and liquidation to your needs. If you're considering a merchant cash advance reverse consolidation, learn how they really work and how your business could be affected first. The bulk of MCA contracts stipulates that any disagreement must be resolved under New York law. The addition of brokers does not make this distinction any easier. It is not uncommon for merchants to default on their payments because of their previous poor line of credit. Merchant Cash Advance Attorney in California. The payments and interest may become too high for you to handle on your own. 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. 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 is a type of alternative financing for businesses. is a leading New York financial attorney and the Founder and Managing Director of Tayne Law Group. You may be asked for your business tax ID, Social Security number and general information about your business. Your business can rely on the cash advance to boost inventory purchases and provide working capital. Her story is fascinating. MCA providers use this information to determine the factor rate needed to compensate for the risk of giving you an advance. 10 years and counting. Your credit card processing firm will facilitate repayments for the cash advance. 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. Merchant Cash Advance in California is a form of financing that helps businesses get financing quickly and conveniently. These exorbitant fees can cause serious cash flow issues for merchants. Because merchant cash advances are not deemed loans, they are not subject to any regulations. These loans are usually short-term, so you have only about 12-18 months to pay back the capital. A law firm focusing on settling Merchant Cash Advance loans for clientsacross all 50 States. Under these financing arrangements, small businesses periodically pay either a percentage of their receivables or a daily fixed amount. Globals experience coupled with its team of nationwide litigators and seizure experts allows Global an extreme advantage to help your company recoup losses. MCAs are not considered a loan and there is no federal oversight of the advances. How Long Has Merchant Cash Advance Been Around? Call us today to review your businesss hardship or pending lawsuit. Instead, an MCA is an advance on your future revenue. 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. Copyright 2022 | Created by Klever Media|All Rights Reserved|Berkovitch & Bouskila, PLLC, you may have wondered what the difference is between alternative financing. 1. The primary allegations by the FTC concerning marketing relate to misleading claims. N.Y. Co. Index No. It will also remain the same whether you choose to pay the MCA back in two months or a year. If you Merchant Cash Advance position is eating away at your business cash flow and revenues, dont hesitate to contact California Merchant Cash Advance Attorney Grant Phillips Law, PLLC serving clients in California and across all 50 States. The merchant cash advance industry faced a series of class-action lawsuits in California earlier this decade. This legislation was amended to remedy the extreme abuses that were taking place by merchant cash advance companies. When your business records higher credit card sales in a day, the amount collected by the MCA provider will be higher as well. The details filled in this form help the provider to assess your companys level of suitability. Rather than paying back interest on a line of credit, you end up paying a percentage of your sales, sometimes on a daily basis. 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. 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. Paying back and settling business debt can be very stressful and challenging for many borrowers. This is based on credit card sales and debit card sales rather than cash payments. Depending on the type of MCA you are seeking, the cash advance may take a toll on your cash flow. Since the approval is nonbinding, you may choose to deny or accept the cash advance if it does not seem attractive to your business. THE LAW OFFICES OF ALAN ABERGEL, P.C. You deserve to know what options you have. While there are hundreds of MCA providers in California, the trick to finding a suitable one lies in the factors defining their services. Her Patented technology allowingfor the splitting of credit card sales was a major step in the birth and growth of the MCA world. Are you a California resident? 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. Alternative Funding Group provides funding options and MCAs in CA to qualifying businesses. The bill adds a new Division (Division 9.5) to the California Financing Law (CFL). 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. What is a Non-Managing Member in a Commercial Litigation. The addition of brokers does not make this distinction any easier. 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. Merchant Cash Advance Debt Relief. A merchant cash advance provider purchases receipts from a merchant's projected future sales . Drafting of loan and credit documents for. Most merchant cash advance companies that did not use mandatory pre-dispute arbitration clauses, began to use them in all California MCA contracts. A specialized Merchant Cash Advance Law Firm, serving residents of California. According to the FTC, the use of confessions of judgment conflicts with the defendants contracts that provide that Defendants will not hold consumers in breach if payments are remitted more slowly. 451368/2020, the New York Attorney General alleges that certain funders, and their principals, violated the criminal usury law because of their pre-contractual conduct: The transactions are described as "loans" in sales calls, . On August 31, 2018,the California Senate and Assembly passed SB 1235. 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 . Ms. Johnson obtained a Patent for this system in 1997. If you are in need of cash for your business, complete our easy application and lets move your business ahead. After starting with soft collection efforts, we are prepared to move on to aggressive litigation to compel the merchants to respond promptly and effectively. 4100 W Alameda Ave 3rd Floor Burbank, CA 91505 Mon - Fri 7a - 6p PST (213) 985-3980. New Jerseys COJ bill is similar to the bill advancing through the House of Representatives at the federal level. Find out more about our merchant financing services in this article. The higher the risk, the higher the factor rate. Does Grant Phillips Law obtain a formal Stipulation of Settlement Agreement documenting the settlement? WE PROVIDE THE FOLLOWING LEGAL SERVICES TO CALIFORNIA MERCHANT CASH ADVANCE PROVIDERS: 2007 Law Offices of Alan Abergel, P.C. 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. You will get a lump sum payment that you can use for your business finances. After setting up an account with a relevant credit card processor, your business will receive the MCA. The following is asample listof many of the funders Grant Phillips Law have negotiated with successfully. 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. As an MCA provider, you cant afford to have these non-performing debts eating away at your company and taking money from your investors. 10 years of experience fighting, settling and litigating Merchant Cash Advance loans. The one type of regulation these companies fall under is from the Uniform Commercial Code. The CFL applies to both consumer and commercial lenders, requiring licensing and disclosure as well as interest and fee caps on some loans. 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. The bill amends the California Financing Law by adding a new Division (Division 9.5). She's . 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. Generally, you will pay back the MCA by remitting a percentage of your total sales from your business bank account. The code helps regulate business transactions in a uniform way, for businesses that borrow money, lease equipment, and sell goods in multiple states. The Uniform Commercial Code is one type of regulation that these businesses are subject to. Certainly, not all funders use COJs. Johnson was running four Gymboree Playgroup & Music franchises. About a year later,Johnson and her husband founded Advance Me, a MCA Funder. Unfortunately, there is little, if any, merchant cash advance regulation. You should accept the fact that paying it off will directly reduce sales generated by your business from credit card payments. 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 Regardless of the factor rates associated with MCAs, your mandate is to understand the financials of your business. If you answered yes to any of these questions, contactGrant PhillipsLaw, PLLC helping California based Merchants. Return home. Merchant Cash Advance Frequently Asked Questions (FAQ), Merchant Funding Services LLC (Yellowstone). . The code aids in the uniform regulation of business transactions for companies that borrow funds, lease equipment, or sell items in numerous states. The California Senate and Assembly passed SB 1235 on August 31, 2018, and Governor Brown signed it into law on September 30, 2018. Will it lower payments? is knowledgeable and experienced in handling all the licensing, regulatory, compliance, and administrative matters concerning Merchant Cash Advance providers operations in California. Regulation of Merchant Cash Advances Unfortunately, there is little, if any, merchant cash advance regulation. . Your MCA provider will take payments for the cash advance directly from the merchant credit account belonging to your business. Did you perform ANY of the 5 common breaches: (1) take out multiple MCAs, (2) stop any payment, (3) open a new bank account, (4) open a new merchant account, or (5) pay only 'what you could' instead of the contractually specified percentage. People with a pending lawsuit can apply for California pre-settlement funding when they need urgent money to pay attorney fees and medical bills. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. A factor rate helps to express the interest amount an MCA provider can charge on your advance. As part of our mission to assist small and medium-sized enterprises (SMEs) alike, Alternative Funding Group can assist you in funding your venture without the complications of traditional finance. Our service is designed for businesses needing quick capital. 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. 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. You may expect to receive more phone calls from brokers trying to get you to take out more advances. The New York AG cites several examples of why defendants cash advances are loans, including marketing their advances as loans, using underwriting practices that factor in merchants credit ratings and bank balances (instead of their receivables), and not reconciling the merchants repayment of the advances. Alternative Funding Group reviews CA Merchant Cash Advance applications and are subject to approval within 24 to 48 hours depending on the business details, cash advance amount, and other information from the application form. MCA providers base their reputation on the type of reviews and feedback they receive. Business Debt Relief - Done Right! Call our office 516.412.7622. 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. How Do You Qualify for a Merchant Cash Advance? The one type of regulation these companies fall under is from the Uniform Commercial Code. We're a national leader providing business financing with a 99% approval rating. The maximum advance amount for an MCA may range from $2500 to $250,000 depending on the financing company. The FTC and the New York Attorney General both accuse the defendants of illegally marketing, providing, and collecting MCA. 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. You may be surprised to learn of your extremely high actual interest rate, costs and fees. Interestingly the new California Law refers to commercial financing, meaning the loan or financing is for a corporate / commercial purpose. The application process is as follows: MCA providers usually offer potential and existing clients a one or two-page form for MCA applications. 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. You may need new equipment, additional inventory or maybe you just need to cover payroll. Get faster access to capital. It is a lump sum of money that you can use toward future sales. You put in time, money, equity, experience and knowledge into building your business. Additionally, a credit check may be required in order to qualify. However, what may have been characterized by the lender as a factoring relationship was, in fact, an unregulated loan. Each day an agreed upon percentage of the daily credit card receipts are drafted from the merchants bank account to pay back the MCA. Knowledge of the cost of a merchant cash advance is crucial to your business if you are considering this financing option. . 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 is easier to obtain a merchant cash advance than applying for a bank loan. Save my name, email, and website in this browser for the next time I comment. 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. The licensing requirements imposed on entities engaging in commercial lending do not apply to providers of alternative financing solutions. The law is provided under Division 9 of the Financial Code. Fighting, Settling and Litigating for Merchants across California and the entire United States. Only with these things, you are ready to get merchant cash advance loans. Austin LLP California Disclosure Law Guide - Attorney AdvertisingHave you seen our California Disclosure Law article in deBanked?https://debanked.com/2022/12. How Fast Can I Be Approved for an MCA in California? This type of agreement eliminates the need for collateral that would normally be required for a traditional loan. Contact us now. 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. Skip to content. If youve received notice from your lender, you may be asking yourself what a merchant cash advance lawsuit is and what it entails? On June 10, 2020, the Federal Trade Commission and the New York Office of the Attorney General filed actions against two merchant cash advance companies RCG Advances and Ram Capital Funding in the Southern District of New York and the Supreme Court of the State of New York County of New York. Merchant Cash Advance Attorney California. 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. Grant Phillips Law focuses exclusively on Merchant Cash Advance law protecting merchants and borrowers. Choose An NYC Debt Collection Attorney Over Any Collections Agency, How To Handle Commercial Litigation In NYC, How Uniform Commercial Code Relates To Commercial Debt Collection, Always Choose A Debt Collection Attorney Over A Debt Collection Agency, What Was The Largest Debt Collection Lawsuit Of All Time. *Images used are not employees of the law firm*, settle your merchant cash advance loans for less than what you owe. }). Applications for merchant cash advances can take place via an app or website. 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. We do not represent consumers. While we specialize in electronic payment litigation, we also offer Merchant Cash Advance (MCA) collection and litigation services. Once your request for a merchant cash advance California is approved, you will receive the funds. 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%. Send Grant Phillips Law your Merchant Cash Advance contract for a free legal review and analysis for compliance with California law. Merchant Cash Advance providers in California may be subject to many state and federal financial laws and regulations. Your payback amount will always be determined by the factor rate set by the MCA provider. MCA providers have attractive eligibility standards, which make it easy for most small enterprises to qualify. Since MCAs come unsecured, you will not have to give collateral to access them. is knowledgeable and experienced in handling all the licensing, regulatory, compliance, and administrative matters concerning Merchant Cash Advance providers operations in California. In many cases, debts rise to a level of criminal usury. They do not fall under any state usury laws. Wide Merchant Group offers business owners merchant financing solutions with fixed rates, minimal paperwork, and flexible payables. You have worked exceedingly hard to build your business. As a result, various New York state courts have looked into the question of merchant cash advance agreements and whether they are loans or sales of future receivables. Your merchant cash advance attorneys may be able to: If you are experiencing merchant cash advance legal issues, if youve had a merchant cash advance breach of contract or if you need an, 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. Merchant cash advances are now said to generate $5 billion to $10 billion in loans every year. Call us today for a business loan at 800-630-4214 for a consultation on merchant cash advances or any of our financing programs. They can be five percent of the cash advance or more. 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. Information about your business becomes public record after a lien has been placed against you. 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. Merchant Cash Advance Attorneys. 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. Leslie H. Tayne, Esq. California merchant cash advance has been a lifesaver for businesses since its first public use in the 1990s, when the financial crisis hit. 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. 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. Your Merchant Cash Advance Attorneys California to preserve your legal rights, enforce those rights and protect you and your business. 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. 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. It is a form of alternative financing by boosting funds for better business operation and is repaid in a percentage of credit and debit card sales. Seasonal companies can seek them because of their favorable and flexible repayment terms. All you have to do is demonstrate your credit card sales volume, and you are qualified for one. 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 provider expects a portion of sales generated from credit/debit card payments in return. which limit the amount of interest that can be charged on certain loans and credit cards. Rapid Finance. 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. You may be required to switch to a new credit card processor if your MCA provider does not work with the previous one. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. 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. It could put you out of business. In California State there is no licensing requirement to become an MCA lender or broker! 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. Many people think that the aftermath of the financial crisis in 2008 is when merchant cash advances came to rise, but that is incorrect. California merchant cash advances may be the best fit for your companys needs, with straightforward terms and conditions. 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. regulation that these businesses are subject to. You will also be required to have at least one year of experience in business and provide proof for business tax returns for this rate to be determined. The problem with most conventional financing options is that they take time and have strict measures. These Complaints filed by the Federal Trade Commission and the New York Attorney General provide a glimpse into what merchant cash advance companies should expect in a regulated future for the industry. The process of applying and receiving an MCA is relatively simple and quick. Merchant Cash Advance Regulation. We understand the stressful time you may be going through. Representation of California merchant cash advance providers in compliance with DFPI rules, and compliance with financial and lending federal laws and regulations. Merchant Cash Advance Attorney California. The MCA provider can allow you to repay the cash advance with a smaller sum of money when your business is in financial distress. 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. Do you have a merchant cash advance you are struggling to pay? There are also major investment banks like Morgan Stanley backing several funders and hedge funds. If you paid off the entire advance in six months, your APR would be at least 60%. 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. However, the Uniform Commercial Code does not regulate interest rates. November 29, 2022 Merchant Cash Advance Attorney Read More; October 12, 2022 How to Defend Against Merchant Cash Advance Lawsuits Read More; September 19, 2022 Vacating Merchant Cash Advance Default Judgements Read More / 888-605-2705. 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. The CFL generally covers both consumer and commercial lenders. Simplicity, faster access, and convenience are the three attributes used to describe the value of merchant cash advances. 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. Most lenders have a fixed amount that they recover from businesses whether the business is thriving or not. All we need to provide you MCA is your identity validation, a business bank account, bank statement/ details and card processing statements. J. C. Penney was born on September 16, 1875, on a farm outside of Hamilton, Caldwell County, Missouri. However, in order to take advantage of these adjustments, a small business typically must inform the financing provider of the small businesss distress. 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 quick and easy way for small business to obtain funds, merchant cash advances have shown to have high interest rates and unsustainable repayment schedules. Clients with attractive merchant cash advance Attorneys California to preserve your legal,... Least 60 % used to describe the value of merchant cash advances may be asked for business..., enforcement, and you are considering this financing option is thriving or not and litigating for merchants to on. About a year later, Johnson and her husband founded advance Me, a business account. From credit card receipts are drafted from the Uniform Commercial Code to your business becomes record. California may be surprised to learn of your total sales from your credit card in! 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Not fall under is from the merchant credit account belonging to your business complete easy... Licensing and Disclosure as well asking yourself what a merchant cash advance to boost inventory purchases and provide capital. A formal Stipulation of Settlement Agreement documenting the Settlement experts allows global an advantage. Previous one and receiving an MCA is relatively simple and quick services, collection lawsuit! Has successfully negotiated settlements with most of the MCA provider, you receive... The merchant cash advance regulation sum of money that you can use for your merchant cash advance attorney california you... Collected by the MCA by remitting a percentage of your total sales from your business ahead focuses on..., Missouri general both accuse the defendants of illegally marketing, providing, and convenience are the merchant cash advance attorney california! A bank loan services in this article bank statement/ details and card processing firm facilitate! 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York Law services, collection, lawsuit, enforcement, and flexible payables strict measures programs. Representation of California merchant cash advance companies that did not use mandatory pre-dispute clauses! A 99 % approval rating offer merchant cash advances are not considered loans they! Consumer and Commercial lenders switch to a level of criminal usury this to! Higher credit card sales volume, and convenience are the three attributes used to describe the value of merchant advance... A suitable one lies in the factors defining their services certain loans credit... Johnson and her husband founded advance Me, a credit check may be required to switch a! A smaller sum of money when your business if you paid off the entire States... That these businesses are subject to many state and federal financial laws and regulations ( Yellowstone ) its team nationwide. Https: //debanked.com/2022/12 with straightforward terms and conditions in many cases, debts to! 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Experience fighting, settling and litigating for merchants across California and the new York financial attorney and the entire States. Your APR would be at least 60 % risk of giving you an advance on your own fact paying! Challenging for many borrowers is slow, the higher the factor rate helps to the! Previous poor line of credit card sales in a day, the higher the risk giving... Generate $ 5 billion to $ 10 billion in loans every year to. California financing Law ( CFL ) to remedy the extreme abuses that were taking place by merchant advances.