[Yankeeman07]

I got 5 responses from qualified Loan Officers! Thanks

An MCA is NOT a Loan

[SamuelH]

An MCA is NOT a Loan

Sure it is...... Definition of Loan is a thing that is borrowed, especially a sum of money that is expected to be paid back with interest: AKA MCA

[abfunders]

Sure it is...... Definition of Loan is a thing that is borrowed, especially a sum of money that is expected to be paid back with interest: AKA MCA

An MCA is not a loan, otherwise they would be illegal and usurious.
This has been the case law time and time again in NY.
Don't believe anyone on this board? Believe this lawyer:
https://www.thelangelfirm.com/debt-c...r-from-loans-/

There's no "borrowing" but it's "expected" to be paid back, but it's not technically guaranteed to be paid back. A loan carries with it a guaranteed set payback with real terms, not discount rates etc.

[SamuelH]

An MCA is not a loan, otherwise they would be illegal and usurious.
This has been the case law time and time again in NY.
Don't believe anyone on this board? Believe this lawyer:
https://www.thelangelfirm.com/debt-c...r-from-loans-/

There's no "borrowing" but it's "expected" to be paid back, but it's not technically guaranteed to be paid back. A loan carries with it a guaranteed set payback with real terms, not discount rates etc.

Okay sir, a loan is not guaranteed to be paid back either. Guarantee means a formal pledge to pay another person's debt or to perform another person's obligation in the case of default. You're using the wrong words to prove your point as default applies to MCA Loans as well and if they happen the only thing a lender or funder could do is sue but doesn't guarantee any compensation in return.

[abfunders]

Okay sir, a loan is not guaranteed to be paid back either. Guarantee means a formal pledge to pay another person's debt or to perform another person's obligation in the case of default. You're using the wrong words to prove your point as default applies to MCA Loans as well and if they happen the only thing a lender or funder could do is sue but doesn't guarantee any compensation in return.

You're still fighting case law, the trend on DF, and we can continue the conversation. BTW, there are plenty of people on here as-qualified or better-qualified than I am.
If it wasn't for bankruptcy law, then when someone doesn't pay back a loan, there's NOTHING stopping the lender from jumping into the bank account of the borrower and taking money from him, and garnishing wages.
An MCA default cannot garnish wages. If the business goes bankrupt, there's technically nothing that can be done. They bought the future income, and there turned out to be no future income.
Let's use the stock market as an example:
If I lend money to a farm, then if they don't pay me back, I have a lien on the farm. I don't care if their business does well or not. They could choose not to pay me, there's not "guarantees" in life, but I have tools through the courts to take it out from them.
If I buy futures on their cattle stock, if their cattle does well, I get a portion. If not, I'm out of my money. Nothing to do. No courts, no liens.
In most cases, to not be a loan, an MCA has to mimic a purchase of futures. Otherwise it would be usurious loan.

I dare you. Put my statement through ChatGPT and see if I'm mostly correct. I'm dumbing it down, and there are extra points to consider, but that's the basic gist.

[SamuelH]

You're still fighting case law, the trend on DF, and we can continue the conversation. BTW, there are plenty of people on here as-qualified or better-qualified than I am.
If it wasn't for bankruptcy law, then when someone doesn't pay back a loan, there's NOTHING stopping the lender from jumping into the bank account of the borrower and taking money from him, and garnishing wages.
An MCA default cannot garnish wages. If the business goes bankrupt, there's technically nothing that can be done. They bought the future income, and there turned out to be no future income.
Let's use the stock market as an example:
If I lend money to a farm, then if they don't pay me back, I have a lien on the farm. I don't care if their business does well or not. They could choose not to pay me, there's not "guarantees" in life, but I have tools through the courts to take it out from them.
If I buy futures on their cattle stock, if their cattle does well, I get a portion. If not, I'm out of my money. Nothing to do. No courts, no liens.
In most cases, to not be a loan, an MCA has to mimic a purchase of futures. Otherwise it would be usurious loan.

I dare you. Put my statement through ChatGPT and see if I'm mostly correct. I'm dumbing it down, and there are extra points to consider, but that's the basic gist.

WOW sir, you proved my point bankruptcy filing chapter 11 dissolves Unsecure Loans. Emerge Law considers MCA Loan a unsecure loan that can be dissolved under a chapter 11 filling. Please see source below.

Source
https://www.emerge.law/post/merchant...small-business

[abfunders]

WOW sir, you proved my point bankruptcy filing chapter 11 dissolves Unsecure Loans. Emerge Law considers MCA Loan a unsecure loan that can be dissolved under a chapter 11 filling. Please see source below.

Source
https://www.emerge.law/post/merchant...small-business

Emerge Law considers it, but that's marketing to convince people to come and spend money to try to get their MCAs taken care of.
Did you try putting my answer through ChatGPT? I can find you a lot of MCA companies who will write on their websites that an MCA isn't a loan. Backd, altLine, OnDeck, to name a few on a quick Google search.

Try to quote me actual case law. This has been tried time and time again in NY state to make it a loan and therefore illegal usury, and they keep losing! https://debanked.com/2021/06/new-yor...are-not-loans/

Sometimes MCAs are loans, and that's when the exception is when the guaranteed payment is there, and the funders won't do reconciliation or push it off, etc etc. MCAs are not guaranteed "enough" to pass the muster to make them loans.

Bankruptcy erases loans and MCAs, but that doesn't prove that an MCA is a loan. It just proves that bankruptcy law is a blanket law, and loans and MCAs are a subset that are included. The point is that you don't need to file bankruptcy in order to get out of an MCA. The logical concept at play here is known as commonality vs. identity AKA the shared attribute fallacy. To be simple: Just because two people look similar, play pitcher, are both 6'4", and redheads with beards and have the same name..... doesn't make them the same person, and doesn't make them brothers. Google Brady Feigl.

I would like you to double-check me on ChatGPT.

[Yankeeman07]

Sure it is...... Definition of Loan is a thing that is borrowed, especially a sum of money that is expected to be paid back with interest: AKA MCA

Two items a person learns very fast in the MCA Industry - Never use the words "loan" or "Interest"

A true MCA is the "purchase of future receivables" for upfront cash payment - An MCA has a "factor rate" not interest.

[SamuelH]

Two items a person learns very fast in the MCA Industry - Never use the words "loan" or "Interest"

A true MCA is the "purchase of future receivables" for upfront cash payment - An MCA has a "factor rate" not interest.

This is truth you don't use it, but it doesn't change the fact that's what it is just my take on things you don't have to agree.