Oh and back to the legalities. If the first lender can prove the merchant intentionally devalued the receivables which were sold, changed the way their business is structured in order to avoid detection by them OR detection that their deal exists to the second lender, they can pursue the individual if the business should fail.

The problem is, the only good this does the first lender is if the business fails, with a large amount due and if they believe they can actually collect the funds anyways. This is why you rarely see judgements from MCA providers on credit reports.