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

The Merchant Cash Advance (MCA) industry has grown rapidly in recent years, providing small businesses with quick and accessible capital. Unlike traditional loans, MCAs offer businesses a lump sum in exchange for a portion of their future sales, typically processed through credit card transactions. While MCAs can be a lifeline for businesses needing fast cash, the industry has faced criticism for a lack of regulation, sometimes leading to abusive practices. In response to these concerns, the Attorney General and MCA's  has played an increasingly important role in overseeing and regulating this financial product. The Rise of the Merchant Cash Advance Industry Merchant cash advances have emerged as an alternative to traditional financing, especially for small businesses that may not qualify for bank loans due to low credit scores or lack of collateral. In an MCA, a provider gives a business upfront capital in exchange for a percentage of future sales. These payments continue until...

 The New York Truth in Lending/TILA Disclosure Law, shows a clear and unambiguous intent on the part of the New York Legislature. No more predatory loans! Not here. This directive includes its chief protagonist, namely the infamous Merchant Cash Advance. New York has begun to regulate the Merchant Cash Advance industry and together with California, provides fiscal protection to corporations and businesses (Emphasis added). S.B. 5470 goes a long way to right potential corporate lending abuses. https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

 The protocol and format of how lenders will issue, maintain and comply with the new law and the manner by which lenders will be monitored, will be prescribed by The New York Department of Financial Services (DFS). At the time of writing this article, the DFS has yet to issue guidance or provide instruction on Format and Compliance. https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

 In other words “We will reduce your debt by x% but we still reserve the legal right to sue you and come after you for the x% we temporarily forgave at a later time when you have income or assets.” Often such judgments stay in affect for 20 years and lead to wage garnishments, liens and writs of possession. A qualified attorney will make sure that any such settlement releases the debtor from any future deficiency judgments. 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. 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. https://grantphillipslaw.com/tackle-all-your-debt-with-a-debt-relief-attorney/

 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/

 2010 saw a large increase in MCA loan origination. This growth can be attributed to the economic circumstances and fledging economy at that time. It was a perfect combination of circumstance and timing. Small business lending had all but dried up, demand for funding had risen sharply and the resulting turmoil presented both the conditions and timing necessary for the MCA industry to grow exponentially. https://grantphillipslaw.com/merchant-cash-advance-101-explained/

 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/

Running a small business in New York is no easy task. Between the high cost of living, competitive market, and fluctuating economic conditions, business owners are often faced with the challenge of maintaining sufficient cash flow. One of the funding solutions that has gained traction in recent years is the Merchant Cash Advance New york . This alternative financing option has helped many businesses weather short-term financial difficulties and fuel their growth. This article delves into what an MCA is, its advantages and disadvantages, and how it works specifically for businesses in New York. What is a Merchant Cash Advance? A Merchant Cash Advance (MCA) is not a loan in the traditional sense but rather an advance on a business’s future credit card or debit card sales. In simple terms, MCA providers give businesses a lump sum of cash upfront, which they then repay through a percentage of their daily or weekly card sales. This funding option is particularly popular among small busi...

  The intent of S.B 5470 is to provide corporate and small business borrowers with more transparency surrounding their taking of credit, in order to allow for better, more informed decisions, a clearer understanding of how much is being borrowed and under what terms and to provide a corporate borrower with the ability to compare different offers of credit. https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

  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/

  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/

  The CFDL was in fact originally passed in 2020 and later amended to include additional commercial financing instruments such as a Merchant Cash Advance. https://grantphillipslaw.com/new-york-mca-final-disclosure-laws/

  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/

  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/

  The new TILA-like Disclosure requirements were signed into law on December 23rd of 2020 with an original commencement date of June 21, 2021. However, since passing S.B. 5470 the New York Senate has provided additional guidance and updates (In March 2021), and included in this update is a new date for commencement of the law to begin January 1st, 2022. https://grantphillipslaw.com/new-york-enacts-apr-disclosure-laws/

  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/

  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/