[Sean Cash]

I very much wish that the Factoring 2014 conference wasn't the same week as the ETA show. Apparently Dan Smith of Fora is going to debate Todd Sherer of Credit Cash over whether or not merchant cash advance transactions are sales.

smithvsherer.jpg

https://www.factoringconference.com/speakers.asp

[MCNetwork]

I believe that purchases of future credit card receivables (in which a holdback on cc is utilized to repay the advance) are definitely sales. They are worded as such in the contracts. ACH loans, however, are straight up simple interest loans.

[Sean Cash]

my guess is that Dan Smith will be arguing in favor of sale? I think the format is a debate so one of those 2 guys will argue it's not a sale.

I disagree with the question itself since merchant cash advance is an ambiguous term.

[MCNetwork]

Well according to Wikipedia:

"A Merchant Cash Advance was originally structured as a lump sum payment to a business in exchange for an agreed upon percentage of future credit card and/or debit card sales. The term is now commonly used to describe small business loans that are repaid in fewer than 18 months."

So the debate will have to clarify if they are lumping ACH loans in with credit card advances.

[Capital Stack]

good question

Well according to Wikipedia:

"A Merchant Cash Advance was originally structured as a lump sum payment to a business in exchange for an agreed upon percentage of future credit card and/or debit card sales. The term is now commonly used to describe small business loans that are repaid in fewer than 18 months."

So the debate will have to clarify if they are lumping ACH loans in with credit card advances.

[MCAVeteran]

Wasn't there just a post that said credit cash invested in fora?

[cashguy]

http://www.businesswire.com/news/home/20130619005379/en/Paramount-Merchant-Funding-Secures-13-Million-Growth

[Ryan Shiroky]

This entire industry is seeing HUGE changes in leaps and bounds when it comes to investors dropping money into funders and their platforms. Everyone wants a piece of the action it seems and I really doubt we have even seen the half of it....

Can't wait to see whats next...

[Sean Cash]

There are videos of that debate in fora financial's youtube channel , but does anyone know if there are higher quality ones out there somewhere?

https://www.youtube.com/channel/UCqh...IAYLKhNyS47RBg

[MCAVeteran]

I went to this show and I can tell you the takeaway was that loans and ach based products are really what that industry wants not so much the mca so the debate really didn't have a purpose IMO at this show

[bdshaw]

If it looks like a duck and quacks like one that will define the transaction. The debtor's lawyer will argue that regardless of the language in the purchase agreement that if upon default the creditor will be in a position to file a lien on other company assets and then have all the debtors assets securing the transaction, it's a loan.
The factoring industry had a similar situation some years ago when several cases resulted in factoring agreements being determined to be secured loans. I can;t see where this product will be any different.

[Chambo]

Isn't this exactly what happened to both REWARDS NETWORK and AMI in California?

I believe the judge in the 2007 Rewards case said "You put a dress on a pig, it's still a pig"