Merchant Cash Advance Disputes Are Getting Wilder

Following the tradition, the merchant cash advance (MCA) industry was born in New York, and its law continues to be the law of choice in many MCA agreements. This has led to many disputes because, unlike dozens of other statesNew York has a 25% criminal usury cap for business loans. In many cases, MCA funders argue that MCA agreements are not loans and are therefore exempt; while business customers (referred to as ‘merchants’) seeking to evade their obligations, unsurprisingly, argue that these are in fact loans subject to the cap.

There are now dozens of trial decisions and several appellate decisions on this issue. This well-developed MCA case law has resulted in more careful drafting of MCA agreements in recent years, but some recent decisions suggest that MCA litigation is about to get wilder.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Why am I seeing this?

LexisNexis® and Bloomberg Law are third-party online distributors of ALM’s extensive collection of current and archived versions of legal news publications. LexisNexis® and Bloomberg Law clients may access and use ALM content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal and Corporate Counsel, as well as other sources of legal information.

If you have any questions, call 1-877-256-2472 or contact us at [email protected]

Comments are closed.