[JustInCase]

[fundinggrasshopper]

sick signature justin - why be on this forum with those credentials? I would be knee deep in business, with no time for daily funder shenanigans if i offered all those products.

[JustInCase]

[JustInCase]

[Olderguy]

Great as far as I'm concerned...should be national...

[JustInCase]

[JustInCase]

[mca2150]

Is my assumption that every lender in NYS due to courts jurisdiction now who does not offer reconciliation in MCA agreements is funding as usurious loans and not purchase of future receivables? Because it seems that way according to wording in this October 2023 NYS decision.



Then, in October, the Appellate Division of the Supreme Court of New York, Second Department (which also oversees Rockland County) reviewed the Merchant Cash Advance Agreement used by Crystal Springs Capital (a Nassau County-based lender) and found that the “agreement constituted a criminally usurious loan.” In support, the court cited that the amounts withdrawn each day were not based on sales but on a fixed amount, which the lender had no obligation to reconcile or adjust to daily sales, and that the repayment obligation was absolute, making the scheme a usurious loan and not a legitimate “purchase of future receivables.”

This decision, along with Attorney General’s recent victory over predatory lenders, is sure to be relied on by defendants here in Rockland County and elsewhere in the Second Department. The decision opens the door once and for all for a usury defense.

Interest rates become usurious in New York when they exceed 16 percent. They become criminal when the interest rate exceeds 25 percent. Loans made in excess of 16 percent are typically modified or voided by the courts when such cases are litigated. Loans made with interest in excess of 25 percent can be referred for criminal prosecution. Source: https://rcbizjournal.com/2023/12/06/...rts-to-decide/

Every reputable funder has a reconciliation clause in their contract. The daily/weekly payment is an estimate of their future receivables and the specified percentage attributed towards that estimate. It's well established law at this point.

[MCAColllector]

The decision you're referencing is based on an old agreement from 2020 which stated that bankruptcy was an event of default and that the daily debit amount may be adjusted at the funder's "sole and absolute discretion." In other words, the agreement at issue in this case was not in compliance with the case law that sets forth the factors courts will consider when weighing whether it is a loan or receivables purchase. It sucks, but is in no way a "major decision" for funders that have been on top of updating their agreements to remain in compliance with the latest case law.

[abfunders]

The decision you're referencing is based on an old agreement from 2020 which stated that bankruptcy was an event of default and that the daily debit amount may be adjusted at the funder's "sole and absolute discretion." In other words, the agreement at issue in this case was not in compliance with the case law that sets forth the factors courts will consider when weighing whether it is a loan or receivables purchase. It sucks, but is in no way a "major decision" for funders that have been on top of updating their agreements to remain in compliance with the latest case law.

Add that to the fact that Jon himself enforced it like a loan and would never "reconcile" and instead threaten bodily harm with profanity, gaslighting the merchant, and you're definitely a usurious loan (and רבית דאורייתא)

[MCAColllector]

Ick. He is such a stain on this industry. I had a couple of run ins with him during the early days of my career and he is truly a despicable human being.