[bked]

One thing OnDeck will tell you is that they are NOT a merchant cash advance company

Good point, I definitely noticed that, but I also noticed plenty of other MCA lenders that do the absolute reverse and highlight that their products are not "loans" to avoid regulatory scrutiny. That's what got me on this path I'm on now looking into OnDeck. It seems odd because OnDeck's loans are advertised as half of MCAs, but are still way above traditional financing routes.

[Sean Cash]

Good point, I definitely noticed that, but I also noticed plenty of other MCA lenders that do the absolute reverse and highlight that their products are not "loans" to avoid regulatory scrutiny. That's what got me on this path I'm on now looking into OnDeck. It seems odd because OnDeck's loans are advertised as half of MCAs, but are still way above traditional financing routes.

MCA companies don't have to highlight anything to avoid regulatory scrutiny. They buy future revenue streams and along with that, they accept types of risks that a lender would never accept, such as no recourse in the eventuality the business fails. Traditional MCA companies also collect their asset on an unpredictable basis that is entirely dependent on the future performance of a business. There is no predetermined term or deadline. It's not that MCA companies are choosing to call their product by a different name to "avoid" something, but rather they are actually engaged in a unique set of transactions that do not have the characteristics of a loan.

OnDeck's APRs come off high because of the daily amortizing nature of their structure. Listen to Noah Breslow talk about that while sitting next to the head of the Small Business Administration in the video here: http://www.merchantprocessingresourc...se-of-reality/

[bked]

MCA companies don't have to highlight anything to avoid regulatory scrutiny. They buy future revenue streams and along with that, they accept types of risks that a lender would never accept, such as no recourse in the eventuality the business fails. Traditional MCA companies also collect their asset on an unpredictable basis that is entirely dependent on the future performance of a business. There is no predetermined term or deadline. It's not that MCA companies are choosing to call their product by a different name to "avoid" something, but rather they are actually engaged in a unique set of transactions that do not have the characteristics of a loan.

OnDeck's APRs come off high because of the daily amortizing nature of their structure. Listen to Noah Breslow talk about that while sitting next to the head of the Small Business Administration in the video here: http://www.merchantprocessingresourc...se-of-reality/

I understand what you are saying, but from my research it seems AdvanceMe was claiming the same thing essentially and the California courts didn't buy it. I believe the highlighting is more towards the borrower as to not create false impressions that they are receiving a loan as opposed to an advance.

Thanks for the link, will check it out.