Just received docs from a funder and it includes an "Affidavit of Confession of Judgement" . This is for a small $7k advance with approx $10k payback amount over less than estimated 4 months. The Judgement states among other things
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Merchant Defendant hereby confesses judgment and authorizes entry of judgment in favor of Plaintiff and against Defendants in the Federal District Court for the Southern District of New York, Supreme Court of the State of New York, County of New York, Supreme Court of the State of New York, County of xxxxxx, and/or Civil Court of the City of New York, County of New York, in the sum of $xx,xxx.00 less any payments timely made pursuant to the secured Merchant Agreement dated JANUARY 16, 2015, plus legal fees to Plaintiff calculated at
twenty five percent (25%) of the total of the aforesaid sums, costs, expenses and disbursements and interest at the rate of 16% per annum from JANUARY 16, 2015, or the highest amount allowed by law, whichever is greater. Such amount shall be set forth in an affidavit to be executed by Plaintiff or an affirmation by Plaintiff’s attorney, which shall be attached hereto at the time of entry of this Affidavit of Confession of Judgment.

This confession of judgment is for a debt due to Plaintiff arising from Defendants’ failure to pay to Plaintiff, Merchant Defendant’s accounts-receivable, which were purchased by Plaintiff pursuant to the secured Merchant Agreement dated JANUARY 16, 2015, and for Defendants’ breach of the secured Merchant Agreement, plus agreed-upon interest, attorneys’ fees, costs and disbursements, as agreed-upon by Merchant Defendant and myself, under the secured Merchant Agreement, dated JANUARY 16, 2015, of which supporting documents include a Personal Guarantee and a UCC-1 financing statement(s).
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My questions:
1. Is this standard in the industry to ask merchants to sign these?
2. Does this get filed/recorded only if merchant actually defaults?