These loans are usually short-term, so you have only about 12-18 months to pay back the capital. Every cent received as a cash advance will be deducted from your credit card sales. Call our office 516.412.7622. Save my name, email, and website in this browser for the next time I comment. A merchant cash advance attorney can protect you from the aggressive tactics used by MCA brokers and protect your assets from being seized. 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. Drafting of loan and credit documents for. Consequently, the subject of merchant cash advance agreements and whether they constitute loans or sales of future receivables has been considered by several New York state courts. The statements should portray your business as a venture with a high volume of transactions to stand out as an applicant. 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. If you answered yes to any of these questions, contactGrant PhillipsLaw, PLLC helping California based Merchants. The Uniform Commercial Code, on the other hand, does not govern interest rates. Your business can receive an MCA provided that you share a percentage of your debit card and credit card sales with the MCA provider. As an MCA provider, you cant afford to have these non-performing debts eating away at your company and taking money from your investors. A collection agent may have reached out to you, to demand that you pay the full balance of the alleged debt. Merchant Cash Advance Debt Relief. Only with these things, you are ready to get merchant cash advance loans. You will get a lump sum payment that you can use for your business finances. In California, is Merchant Cash Advance a CA Business Loan? Most merchant cash advance companies that did not use mandatory pre-dispute arbitration clauses, began to use them in all California MCA contracts. is knowledgeable and experienced in handling all the licensing, regulatory, compliance, and administrative matters concerning Merchant Cash Advance providers operations in California. which limit the amount of interest that can be charged on certain loans and credit cards. Since the approval is nonbinding, you may choose to deny or accept the cash advance if it does not seem attractive to your business. Lets settle your Merchant Cash Advance loan with your MCA Funder. Once you fill it out, the provider will reach out to you asking for further documentation. formId: "3d8de059-05d4-4321-8a0a-53170b1a96b3" Our law firm has settled Merchant Cash Advance loans with virtually every funder, big to small, located in California or in a different State, large loan balances to small payoff amounts and everything in between, Grant Phillips law has seen it and settled it. Chances are you may need a short-term loan to cover costs before customers purchase your items. 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. How does it help me? Are you a California resident? Merchant Cash Advance Attorney California. You may also seek it if you have a limited business history. state and federal financial laws and regulations. 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. Merchant Cash Advance providers in California may be subject to many state and federal financial laws and regulations. Our firm has seen interest rates greater than 400% per annum. MCA providers use this information to determine the factor rate needed to compensate for the risk of giving you an advance. Grant Phillips Law PLLC offers MCA attorneys for your grievances. If you have taken an advance from any MCA company, and you need legal assistance or relief contact the Business Debt Law Group today. Instead, an MCA is an advance on your future revenue. THE LAW OFFICES OF ALAN ABERGEL, P.C. After setting up an account with a relevant credit card processor, your business will receive the MCA. You may have come across merchant cash advances as a source of funding in case your company has ever required extra cash to function in the short term or expand. Her story is fascinating. 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. The CFL generally covers both consumer and commercial lenders. The repayment term varies since the payments are based on the percentage of revenue of your daily credit card sales. The application process is as follows: MCA providers usually offer potential and existing clients a one or two-page form for MCA applications. While we specialize in electronic payment litigation, we also offer Merchant Cash Advance (MCA) collection and litigation services. Prior results do not guarantee a similar outcome. 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. The payments can then be paid back in a specified time frame. The code helps regulate business transactions in a uniform way, for businesses that borrow money, lease equipment, and sell goods in multiple 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. We are California Merchant Cash Advance Attorneys with the knowledge and experience to handle all your Merchant Cash Advance positions, even if they originated from another State. Visit us for a free attorney consultation! Businesses of all sizes need enough capital to ensure smooth business operation and provide quality products and services. Did you receive a merchant cash advance breach of contract lawsuit? Your choice depends on the amount your business needs to recover from a particular financial hurdle. 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. According to lore, the merchant cash advance (MCA) industry was born in New York, . A specialized Merchant Cash Advance Law Firm, serving residents of California. However, what may have been characterized by the lender as a factoring relationship was, in fact, an unregulated loan. Merchant cash advances can be very expensive. 10 years of experience fighting, settling and litigating Merchant Cash Advance loans. 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. 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 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. Read the reviews other people have made regarding the company you want to approach for a cash advance. Your task as a business owner is to determine whether an MCA can add value to your business. The public has until April 26th to submit any comments on the amended portions of the proposed rules. 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. 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. With the various types of merchant cash advances, an MCA provider will give you a large sum of money. While an MCA can quickly inject capital into a business struggling with cash flow, the consequences far outweigh the benefits. A merchant cash advance provider purchases receipts from a merchant's projected future sales . Get answers to questions about merchant cash advance in California. Small business owners occasionally require additional operating capital to effectively run their businesses. Dont worry; we do not have heavy documentation or processes that might take time. They can be five percent of the cash advance or more. 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. 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 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. What is a Non-Managing Member in a Commercial Litigation. The law added a new Section to the California Financing Law (CFL). Are you having merchant cash advance legal issues? Merchant Cash Advance Regulation. 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. 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. These new stipulations in lending make it more difficult for merchant cash advance brokers to disguise their costs behind factor rates. Merchant cash advances are now said to generate $5 billion to $10 billion in loans every year. The maximum advance amount for an MCA may range from $2500 to $250,000 depending on the financing company. This is where Global comes in. Let us take the burden off of your shoulders. 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. 1. 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. A confession of judgment takes away your right to defend yourself before a judge if you default or stop paying your merchant cash advance. hbspt.forms.create({ It consists of lump-sum payments and is repaid through the businesss future revenue. 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. The provider expects a portion of sales generated from credit/debit card payments in return. Representation in investigations, inspections, and audits by. Unfortunately, there is little, if any, merchant cash advance regulation. The bulk of MCA contracts stipulates that any disagreement must be resolved under New York law. With over 60 years combined experience we are well prepared to handle your case. Need a lawyer with Merchant Cash Advance and/or online lending specific knowledge? Representation of California merchant cash advance providers before DFPI and assistance in getting a California Finance Lenders license. Merchants sign an agreement that outlines the advance amount, payback amount, holdback and the term of the advance. Get faster access to capital. There are several types of methods on how to accept payments as a law firm from customers. Fear not, Grant Phillips Law will use all our resources to protect you and the business. Call us today for a business loan at 800-630-4214 for a consultation on merchant cash advances or any of our financing programs. 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. whether it has the same impact on credit ratings. Our firm has seen interest rates greater than 400% per annum. The money may come quickly, but what small business owners do not realize is that they may be setting themselves up for potential bankruptcy. You need a lawyer to help you regain control of your cash flow in order that you can best run your business as it should be run. Merchant Cash Advance Attorney California. Merchant Cash Advances came about during the 2008 lending crisis when banks were refusing to lend to most small businesses. 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. The 52-page document is the result [] If you signed a Confession of Judgment with your MCA Contract, reach out to your California Merchant Cash Advance Attorney for help and advice. There is no law that limits how much interest a merchant cash advance company can charge. Get the business funds you need so your company can survive, thrive, or grow. }). 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. 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. However, simple failure to remit receivables because the business has failed, should not be actionable. It takes us 24 to 72 hours to approve funds for our esteemed clients based in Los Angeles. If your business has ever needed additional cash to operate in the short term or to expand, you may have encountered merchant cash advances as a method of financing. HomeCALIFORNIA MERCHANT CASH ADVANCE LAWYER, DBO is now Department of Financial Protection and Innovation (DFPI). 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. A type of financing, this is generally available to businesses with a constant portion of credit card sales. So don't delay; secure your working capital today. We provide business funding solutions, whether you need to increase cash flow to cover expenses, obtain working capital for equipment, or alternative business funding to expand quickly. Which MCA funders has your Law Firm settled a Merchant Cash Advance loan with? While there are hundreds of MCA providers in California, the trick to finding a suitable one lies in the factors defining their services. California merchant cash advance has been a lifesaver for businesses since its first public use in the 1990s, when the financial crisis hit. On August 31, 2018,the California Senate and Assembly passed SB 1235. 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. Once you decide to seek an MCA as extra capital for your venture, you will have to find an MCA provider. Your bank statements and credit card processing data should be at least two months old. Rather than paying back interest on a line of credit, you end up paying a percentage of your sales, sometimes on a daily basis. J. C. Penney was born on September 16, 1875, on a farm outside of Hamilton, Caldwell County, Missouri. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. California Merchant Cash Advance is not considered a business loan. Merchant Cash Advance in California is a form of financing that helps businesses get financing quickly and conveniently. is knowledgeable and experienced in handling all the licensing, regulatory, compliance, and administrative matters concerning Merchant Cash Advance providers operations in California. 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. Alternative Funding Group offers an MCA in California to a business that needs a lump sum of capital to move ahead. We are here to help you any way we can. A majority of MCA contracts require New York law as the choice of law for any dispute. This is called a holdback and it will continue until the advance is paid in full. Our attorneys are here to help you. If you are paying the provider with a higher fixed portion of your credit card sales, you will have a shorter repayment time but tighter cash flow. Wide Merchant Group offers business owners merchant financing solutions with fixed rates, minimal paperwork, and flexible payables. The problem with most conventional financing options is that they take time and have strict measures. CALIFORNIA LENDING & FINANCIAL SERVICES LAW BLOG, DBO is now Department of Financial Protection and Innovation (, California Finance Lenders License application. MCA providers base their reputation on the type of reviews and feedback they receive. It takes us 24 to 72 hours to approve funds for our esteemed clients based in Los Angeles. If youve received notice from your lender, you may be asking yourself what a merchant cash advance lawsuit is and what it entails? The provider may require you to make daily repayment via your merchant account. If you have evaluated the financial sense of merchant cash advance loans for your business, then Panthera Financial is here to your rescue. Most business cash-advances require a daily repayment which can become challenging if the business experiences financial distress. Global Legal Merchant Cash Advance Collections and Litigation. If it takes a week to set up the account, it may also take a week to have funds remitted to you. Grant Phillips Law focuses exclusively on Merchant Cash Advance law protecting merchants and borrowers. Your credit card processing firm will facilitate repayments for the cash advance. Your main goal as a borrower is to avoid filing for bankruptcy and closing your business. Alternative Funding Group provides funding options and MCAs in CA to qualifying businesses. In 1998 a company called AdvanceMe (now called CAN Capital) pioneered the splitting of credit cards. Specifically,an individual by the name of Barbara S. Johnson is listed as the officialinventor of split-funding, a system that allows for automatic loan repayment to the funders from a single credit card processor shared with the Merchant. A higher holdback percentage translates to a higher payback amount. In many cases, debts rise to a level of criminal usury. 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. Merchant cash advance companies are beginning to be examined much more critically by state and federal governments. If you have no option but to take out an MCA, it is in your best interest to understand what may be in the contract to better protect yourself from predatory lending. This can be a debt-trap for many small business owners. Contact the Attorneys atGrant PhillipsLaw, PLLC. The licensing requirements imposed on entities engaging in commercial lending do not apply to providers of alternative financing solutions. Frustratingly, the new California law turns over the duty to provide specific guidance and to create regulationsgoverning the disclosure requirements to the California Commissioner of Business Oversight (known as the DBO). regulation that these businesses are subject to. If you have a merchant cash agreement and the situation with your business profits has changed, contact our attorneys to help negotiate on your behalf! You may be surprised to learn of your extremely high actual interest rate, costs and fees. It is a lump sum of money that you can use toward future sales. Because merchant cash advances are not considered loans, there really is not any regulation associated with them. Established providers tend to offer higher limits to the amounts while less established ones tend to offer lower limits. Unable to get working capital to fund a summer marketing campaign, she wondered whether she could borrow against future credit card sales derived from parents bringing their kids back for fall classes. Merchant Cash Advance Attorney California & All 50 States across the country. Global will tailor its services, collection, lawsuit, enforcement, and liquidation to your needs. We understand the stressful time you may be going through. . These exorbitant fees can cause serious cash flow issues for merchants. Require a merchant cash advance attorney in California? Send Grant Phillips Law your Merchant Cash Advance contract for a free legal review and analysis for compliance with California law. , 2018, the merchant cash advance contract for a free legal and. To find an MCA provided that you can use for your grievances a venture with a relevant credit sales... Defend yourself before a judge if you have a limited business history factor.... 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