[Sean Cash]

I think the big grey area in the legal department is the fact that an MCA is a purchase and sale of credit card receivables and firms like IOU are doing true loans. MCA's don't legally impede loans. Any merchant can go get a loan from a bank with an mca in place. A loan from IOU is no different.

I think this is where people get tripped up. Many MCA contracts that buy future receivables specifically state that the merchant is not allowed to obtain any type of financing at all as part of the terms and conditions. The contract essentially makes applying for a business credit card a breach of contract. It doesn't matter what IOU does or doesn't do. Sellers of future receivables are barred from loans too.