[MCNetwork]

Sachip,

The liability of a business owner taking out an MCA when they already have a line of credit or any other senior financing in place? It can definitely throw the Company in default as the assets are already pledged.

Best,

Kevin

I don't see this happening because the UCC of the MCA company is subordinated to the bank's UCC. The banks retain first position in case of default.

[Kevin Henry-Seacoast]

I don't see this happening because the UCC of the MCA company is subordinated to the bank's UCC. The banks retain first position in case of default.

MCN-That is if the senior lender knows about the MCA and there is a subordination agreement in place. I have seen dozens of case where the senior lender did not know their client took out the MCA and their was no subordination agreement in place.

[CreditGuy]

MCN-That is if the senior lender knows about the MCA and there is a subordination agreement in place. I have seen dozens of case where the senior lender did not know their client took out the MCA and their was no subordination agreement in place.

If the bank's lien is organically senior, no subordination need be executed.

[Kevin Henry-Seacoast]

If the bank's lien is organically senior, no subordination need be executed.

True, but by taking out the MCA or any other loan without the bank's knowledge that it was done could violate their agreement and throw the Company in default.

[ADiamond]

If the bank's lien is organically senior, no subordination need be executed.

using "organic" as an adjective, very hipster - circa 2009. let me find out you wear skinny jeans.