Results 1 to 25 of 40
Hybrid View
-
07-11-2024, 12:31 PM #1
- Join Date
- Feb 2017
- Posts
- 3,450
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.
-
07-11-2024, 01:08 PM #2
- Join Date
- Mar 2024
- Posts
- 23
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.
-
07-11-2024, 01:46 PM #3
- Join Date
- Feb 2017
- Posts
- 3,450
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.
-
07-11-2024, 02:19 PM #4
- Join Date
- Mar 2024
- Posts
- 23
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
-
07-11-2024, 03:08 PM #5
- Join Date
- Feb 2017
- Posts
- 3,450
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.
-
07-11-2024, 03:13 PM #6
- Join Date
- Jan 2022
- Posts
- 22
-
07-11-2024, 05:24 PM #7
- Join Date
- Mar 2024
- Posts
- 23
I read that article from debanked in which at the end of the article it says, "It may have all been for naught because the parties actually settled the case two weeks prior to the decision, according to the public docket (See Index No: 2021-00877)." Would this mean that the parties settled as the merchant could have possibly been held accountable for the funds received? The point I am making here is that MCA whether considered a loan or not is something that is borrowed and is "expected' to be paid back and parties can still be held accountable. Saying it's not a loan doesn't create less penalties for non-repayment it's just word jargon for legalese. The only difference between the loan and MCA is the lending on the grounds for future receivables but let me ask you a question, would you loan someone some money if you didn't expect some type of future receivable?
-
07-11-2024, 05:59 PM #8
- Join Date
- Feb 2017
- Posts
- 3,450
It means they settled because the lawyers worked it out to some Middle grounds and it was cheaper that way. It doesn't mean that the actual case law would have come out in favor of one side or the other. When you see a settlement, you cannot bring a proof to anything.
With a loan, I don't really care if you profit it or not. Your future receivables don't bother me, I hope you're profitable but I don't care. I just care about the principle and interest. A future receivable is not a fancy jargon term, it is an actual reality, as legalese as that sounds it has been accepted, that future fruit that you produce comes to me at a rate that we are predetermining now. I don't care the market value later. However, if there is no fruit then I obviously don't get it. I'm only getting the next 500 tons of grapes at this price. If there's 500 tons of grapes.
In legal discussion, you always must keep definitions consistent so that you don't confuse what you thought should be the truth with what actually ends up being the truth.
Similar Threads
-
Can't get your deal funded?
By CJO1988 in forum Deal BinReplies: 1Last Post: 01-23-2024, 10:41 PM -
A plus paper with 730 CS looking for monthly w good terms
By viper066 in forum Deal BinReplies: 7Last Post: 09-27-2021, 12:50 PM -
need a home for your deal or you need a deal funded paying 18% commission to all new
By lucrativefundinggroup in forum PromotionsReplies: 9Last Post: 04-12-2017, 12:27 PM -
This Question Can Lead to More Closed Deals...Good Rates/Terms
By Harrymetrix in forum PromotionsReplies: 0Last Post: 09-28-2016, 05:49 PM -
Trying To get better Terms on deal for 80K
By Jstarr in forum Deal BinReplies: 8Last Post: 11-17-2014, 07:55 PM