Protecting Maryland Merchants: Grant Phillips Law - Your Merchant Cash Advance Attorney

  As an attorney licensed & practicing in Florida, New York and New Jersey, with a focus on Total Consumer Debt Relief, I am receiving more and more clients, who were once signed into an alleged debt settlement program, hired a non-attorney to address their debt or had already paid exorbitant amounts of money to such companies, and yet, their debt was NOT settled. Many of these practitioners fail to inform the debtor of their limitations, instead often taking loads of upfront money a violation of FTC and State Law, while not performing any service. I have also encountered many companies that promise to eliminate all debt. https://grantphillipslaw.com/tackle-all-your-debt-with-a-debt-relief-attorney/

  Beginning early 2010, after the Great Recession, when the American housing market blew up and the world fell into a financial crisis, conventional banking institutions, for example Chase Bank and Citi, were unwilling to extend credit to small businesses. https://grantphillipslaw.com/merchant-cash-advance-101-explained/

 New York State, by all accounts the haven State for Merchant Cash Advances, ironically is also one of the first States to enact laws that require certain consumer like disclosures even for several commercial loans. This is significant development since New York’s Commercial Finance Disclosure Law (CFDL) went into effect August 1st, 2023 and in the law the CFDL has extended disclosure requirements ordinarily required for consumer lending to commercial financing instruments such as a merchant cash advance. https://grantphillipslaw.com/new-york-mca-final-disclosure-laws/

In the fast-paced world of business, securing the necessary funds to maintain operations and foster growth can be challenging. For many small and medium-sized businesses, traditional loans are not always a viable option due to stringent requirements, long approval times, and the need for collateral. This is where Merchant Cash Advances (MCAs) come into play, offering a more flexible and accessible solution. However, the MCA industry, especially in New York, is complex and often fraught with legal challenges. That's where Grant Phillips Law steps in, providing expert legal guidance and support to navigate this intricate landscape. What is a Merchant Cash Advance? A Merchant Cash Advance (MCA) is not a loan in the traditional sense. Instead, it is an advance on future credit card sales or receivables. Businesses receive a lump sum of cash upfront and repay the advance with a percentage of their daily credit card transactions. This flexibility allows businesses to repay the advance...

  These purported specialists fail to inform the debtor that they can only attempt to address unsecured debt such as credit cards and medical bills. A non-attorney is legally prohibited from giving legal advice & most are not qualified to deal with secured debt like real estate mortgages or car loans https://grantphillipslaw.com/tackle-all-your-debt-with-a-debt-relief-attorney/

  There are a myriad of different laws on the Federal and State level that govern creditors, lenders, credit card issuers and debt collectors and that can be used by a qualified attorney to find a breach of law and used to litigate on behalf of a debtor if necessary. https://grantphillipslaw.com/tackle-all-your-debt-with-a-debt-relief-attorney/

  meaning: a closed-end extension of credit, secured or unsecured, including equipment financing that does not meet the definition of a lease under section 2-A-103 of the uniform commercial code, the proceeds of which the recipient does not intend to use primarily for personal, family, or household purposes. Closed-end financing includes financing with an established principal amount and duration. See N.Y Financial Services § 801(d). https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

  Provided certain disclosures are met pursuant to S.B. 5470 and that risk to changes in receivables are carried and borne entirely by the lender, coupled with several other legal criteria (the specifics of which are not applicable for this article), and it is possible for a bona fide Merchant Cash Advance, (i.e. in compliance with all laws) to exist. https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

  The final rules provide that the finance charge on a transaction should be calculated and disclosed. This means the fees that the Merchant Cash Advance Funder usually charges for underwriting and origination. https://grantphillipslaw.com/new-york-mca-final-disclosure-laws/

  The final rules require any commercial financing that incorporates a Broker that the MCA Funder must inform the Business receiving the MCA in writing of how and by whom the broker will be compensated. https://grantphillipslaw.com/new-york-mca-final-disclosure-laws/

  A traditional loan is repayable absolutely and gives no contingencies to the borrowing company to not pay. On the other hand, a true Merchant Cash Advance is NOT repayable absolutely and thus there are circumstances where the money provided by the Merchant Cash Advance funder is not repayable. https://grantphillipslaw.com/merchant-cash-advance-101-explained/

  With an abundance of new regulation, credit underwriting standards inevitably increased to such an extent, that most small businesses were left out in the cold, unable to obtain working or start-up capital, thus leaving a massive void in the lending to small business space. https://grantphillipslaw.com/merchant-cash-advance-101-explained/

  When a debtor hires a debt expert or company additional problems arise. There is the too common issue of multiple creditors and the inability of the expert or debt settlement company to get ALL of the debtor’s creditors into one all-encompassing settlement https://grantphillipslaw.com/tackle-all-your-debt-with-a-debt-relief-attorney/

  As an attorney licensed & practicing in Florida, New York and New Jersey, with a focus on Total Consumer Debt Relief, I am receiving more and more clients, who were once signed into an alleged debt settlement program, hired a non-attorney to address their debt or had already paid exorbitant amounts of money to such companies, and yet, their debt was NOT settled. https://grantphillipslaw.com/tackle-all-your-debt-with-a-debt-relief-attorney/

  Perhaps. Time will tell. With the advent of financial technology, providers and lenders of corporate finance have become more sophisticated and continually seek to “invent” new and complex lending structures that bad actors can use to engage in predatory and lending abuses. S.B 5470 seeks to govern these creations and inventions by requiring the disclosures delineated in more detail further into this article. https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

  Notwithstanding the lack of DFS guidance thus far, the law is categorical in its underlying intent and drive. New York is looking out for small businesses at home and across the country. S.B 5470 is groundbreaking in so far as it mandates that certain disclosures be provided to corporate borrowers, thereby providing a corporate borrower with protection from lending abuses perpetrated on small businesses and merchants across the United States. https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

  Beginning early 2010, after the Great Recession, when the American housing market blew up and the world fell into a financial crisis, conventional banking institutions, for example Chase Bank and Citi, were unwilling to extend credit to small businesses. https://grantphillipslaw.com/merchant-cash-advance-101-explained/

  New York State, by all accounts the haven State for Merchant Cash Advances, ironically is also one of the first States to enact laws that require certain consumer like disclosures even for several commercial loans. https://grantphillipslaw.com/new-york-mca-final-disclosure-laws/