Reduce the regulatory risk of merchant cash advances and factoring

Law360 (May 17, 2019, 3:58 p.m. EDT) – A growing number of courts and regulators have reached different conclusions on whether factoring and merchant cash advances constitute loans subject to approval government lenders and usury regulations, leaving many factoring companies and their clients without legal certainty as to the nature of the transactions between them.

Businesses engaged in factoring (purchase of unpaid invoices) or merchant cash advance transactions (purchase of a percentage of future invoices and credit card sales) generally consider the purchase of existing or future receivables to be is fundamentally different from the loan.

New York is one of many states that have taken this position, with the courts relying on …

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Reduce the regulatory risk of merchant cash advances and factoring

Stay one step ahead