[TheUnderwritingProdigy]

https://debanked.com/2020/02/marylan...cash-advances/

Thoughts?

[harvey]

seems like a bit of a stretch but just more active legislation against the business is never a good thing

[SFC]

https://debanked.com/2020/02/marylan...cash-advances/

Thoughts?

They probably will pass it, and it will probably get struck down at some court level.

It's pretty difficult for States to regulate B2B commerce, especially interstate commerce (which belongs to the federal government to regulate). I'm not sure how they can constitutionally tell a business that they can't sell something that legally belongs to/or will belong to them.

It's interesting that they aren't trying to argue that an MCA is a Loan and thus usurious. I guess they're conceding the point proven over and over in NY that an MCA is NOT a loan so they're just saying well we don't like it so you can't do it. Not sure how that holds up.

[TheUnderwritingProdigy]

seems like a bit of a stretch but just more active legislation against the business is never a good thing

Yeah, my biggest concern is that the conversation is now being actively had and if it passes in Maryland, then who knows what other states will follow.

[WestCoastFunding]

This is a great way increase the total business failures in the state.

Listen, if a person is smart enough to get a business to the point where they have the revenue to qualify for a MCA, you have to figure they know better about what they need than some grandstanding legislator.

[SFC]

This is a great way increase the total business failures in the state.

Listen, if a person is smart enough to get a business to the point where they have the revenue to qualify for a MCA, you have to figure they know better about what they need than some grandstanding legislator.

Yup. Alternatively, if a person is about to go out of business because they can't make rent, payroll, etc. their state is basically saying F U go out of business. I'm sure that'll be great for jobs in Maryland.

[Chambo]

Yup. Alternatively, if a person is about to go out of business because they can't make rent, payroll, etc. their state is basically saying F U go out of business. I'm sure that'll be great for jobs in Maryland.

Slow your roll....

How much business is actually generate din the State of Maryland? How many of those business have multiple employees?

If the merchant cannot make rent and payroll, then should they even be in business? How is a 60-75 daily ACH pull going to help them get out of that hole exactly?

[ridextreme]

So when a MD business is struggling and about to close it's doors and put people out of work, and/or the owners into foreclosure on their primary residence, if the bill got passed, I hope the law makers over there (who think all the MCA funders are just business rapists) know where to direct those high risk businesses to get funds, or even a business who needs 100K to make 500K and doesn't mind spending 50K for the money.

How is a 60-75 daily ACH pull going to help them get out of that hole exactly?

It's not the pull that's gonna help them it's the initial funds they rec'v.

[SFC]

Slow your roll....

How much business is actually generate din the State of Maryland? How many of those business have multiple employees?

If the merchant cannot make rent and payroll, then should they even be in business? How is a 60-75 daily ACH pull going to help them get out of that hole exactly?

I hear you. But as @TheUnderwritingProdigy said, once one state does it, others may follow.

As for the daily pulls, it's pretty simple. If you need to make payroll, cover rent, whatever, and someone is giving you 15-50k within a few hours, I mean you now have 60-75 days to figure out how to get out of the hole. The alternative is you are out of business.

That's 3-5 more months of paying your landlord, providing services, paying your employees which in turn supports their family. I mean these are lifelines sometimes. Removing them from people isn't helping anyone is it?

[WestCoastFunding]

I just don’t how this would hold up under the courts. To me, the only way these could be banned would be if done nationally using the commerce clause. And I doubt the current makeup of SCOTUS would allow it.

Then there’s unintended consequences of the state banning B2B transactions. Would this make factoring illegal?

[SFC]

I just don’t how this would hold up under the courts. To me, the only way these could be banned would be if done nationally using the commerce clause. And I doubt the current makeup of SCOTUS would allow it.

Then there’s unintended consequences of the state banning B2B transactions. Would this make factoring illegal?

Yup, EXACTLY, thank you!

They will probably pass it. It will probably be overturned.

[BB_Cooper]

Oddly, the statutory definition proposed in Maryland only prohibits split transactions?? Has any of the FinTech/Alternative Finance Industry Trade groups commented on this proposal?

“MERCHANT CASH ADVANCE TRANSACTION” MEANS
2 AN ARRANGEMENT BETWEEN A BUYER AND A SELLER IN WHICH THE BUYER AGREES
3 TO PURCHASE AN AGREED–ON PERCENTAGE OF FUTURE CREDIT CARD REVENUES
4 OR DEBIT CARD REVENUES THAT ARE DUE TO A SELLER FOR A PREDETERMINED
5 PURCHASE PRICE.

[mcaguru]

Rapid is based in MD. I have full faith they will be able to demonstrate the full spectrum of when and why a business owner would need short term finance. Comparing short term capital to the Prohibition years of alcohol when heads of families were destroying their kids and spouses physically and mentally and by the havoc alcohol was bringing upon the nation! -- the comparison is shameful at best.