[Sean Cash]

In the eyes of the LAW, is there a difference between stacking a loan vs. a business cash advance? I don't know the law from my elbow but it seems like taking legal action to prohibit a business owner from engaging in a sale may be in violation of that business owners' constitutional rights…

Loans… it makes sense to me… Any experts on this? Sean?

I am not a lawyer but I believe the NAMAA member perspective is that the merchant agrees to terms that require approval from the funder to okay additional debt even if it's unsecured since it could endanger the funder's purchase of future revenues. I get the argument on both sides but this is something the merchant signs off on when getting funded.

At least 1 NAMAA member includes a notice in all UCC filings that roughly says lending to or purchasing future revenues of this business constitutes malicious tortious interference. I can go grab the actual language if anyone wants to see for themselves.

The challenge with that is that an actual unsecured lender is probably not going to do a UCC search. The first time I ever got extended unsecured business credit, the only thing they looked into was my personal credit and banking.

So it would be negligent for a secured lender to plead ignorance but an unsecured creditor, I don't know.

And on a slightly unrelated topic, Robert Cook of the financial services law firm Hudson Cook at Lend360 said that a personal guaranty of performance is still a personal guaranty. Something to chew on about contracts in the MCA industry.