[bked]

I know that most MCA lenders structure the transaction as a purchase of future receivables, but OnDeck promotes their lending as a traditional loan on their website, despite the high and technically usurious interest rates.

Does anyone know how they do not violate usury laws by doing so? I thought this was one of the big problems that AdvanceMe faced.

Any guidance or help would be appreciated. Doing research for a legal article. Thanks.

[Sean Cash]

I know that most MCA lenders structure the transaction as a purchase of future receivables, but OnDeck promotes their lending as a traditional loan on their website, despite the high and technically usurious interest rates.

Does anyone know how they do not violate usury laws by doing so? I thought this was one of the big problems that AdvanceMe faced.

Any guidance or help would be appreciated. Doing research for a legal article. Thanks.

A company that buys future receivables is not a lender but rather a purchaser.

As for OnDeck, many states do not have usury caps on commercial loans and for ones that do, I suggest you read up on the rate export model to understand how financial institutions can lend in states at rates that exceed state laws.

State-chartered, federally insured banks claim the right to export home state interest rates. They issue the loans and then immediately sell them to the non-bank "lenders" to service.

This is standard operating procedure in the lending world.

[bked]

A company that buys future receivables is not a lender but rather a purchaser.

As for OnDeck, many states do not have usury caps on commercial loans and for ones that do, I suggest you read up on the rate export model to understand how financial institutions can lend in states at rates that exceed state laws.

State-chartered, federally insured banks claim the right to export home state interest rates. They issue the loans and then immediately sell them to the non-bank "lenders" to service.

This is standard operating procedure in the lending world.

Thanks for the info, I understand the rate export, but it seems that even with that the rates are still usurious by the standards I'm seeing for the states they claim to originate loans in (CA and VA). Do you have any sources you can point me towards?

[Chambo]

Thanks for the info, I understand the rate export, but it seems that even with that the rates are still usurious by the standards I'm seeing for the states they claim to originate loans in (CA and VA). Do you have any sources you can point me towards?

They lend the money at standard rates, but then have third party fees that create the total cost to merchant.

[bked]

They lend the money at standard rates, but then have third party fees that create the total cost to merchant.

Chambo,

Thanks for the info. Just so I understand, the rates for the loans are within the limits of the usury laws, but the fees rolled into the loan increase the interest rate above the usury limit? Any additional information is greatly appreciated. I'm doing a research project so any sources or explanations would be very helpful.

Thanks for the info!

BK

[Sean Cash]

Chambo,

Thanks for the info. Just so I understand, the rates for the loans are within the limits of the usury laws, but the fees rolled into the loan increase the interest rate above the usury limit? Any additional information is greatly appreciated. I'm doing a research project so any sources or explanations would be very helpful.

Thanks for the info!

BK

This is the part where you hire a good lawyer with specific subject matter expertise.

[J.Celifarco]

Chambo,

Any additional information is greatly appreciated. I'm doing a research project so any sources or explanations would be very helpful.

Thanks for the info!

BK

When you say research project do you really mean trying to figure out how to make contracts for your new lending company???? Just saying because these are some odd questions for a research project??

[anonymous]

I've wondered about that too, any insight would be great.

nvm, didn't see that it had already been answered.