MERCHANT CASH ADVANCE ATTORNEY -FLORIDA
- Do the majority of your Florida business revenues go towards daily ACH payments?
- Did you personally guarantee your Florida Merchant Cash Advance loan?
- Did your funder make you sign a COJ / Confession of Judgment or an Agreed Judgment?
- Is there a UCC filed against your Florida business?
- Are you paying a fixed amount on your MCA loan despite a decrease in revenues?
- Are funders, their attorneys or collection agencies calling, texting and harassing you?
- Does your Florida based Credit Card Terminal have a lock box?
- Do you need to change your MCA repayment schedule to monthly payments from daily?
- Are your Florida business or individual bank accounts frozen, attached or levied?
- Have your clients or vendors been contacted by your Merchant Cash Advance funder?
- Did you attempt to restructure payments to your Merchant Cash Advance funder due to a fluctuation in sales and revenues? Was it granted?
- Were you asked to put up any personal collateral like your residential home?
If you answered yes to any of these questions, contact Grant Phillips Law, PLLC helping Florida Merchants. A law firm focusing on settling Merchant Cash Advance loans for clients across all 50 States. Florida MCA Attorneys. Grant Phillips Law, your Merchant Cash Advance Attorneys in Florida. Let us review your Merchant Cash Advance Contract for illegalities. Settle your Florida Merchant Cash Advance loan with your Florida Merchant Cash Advance Funder.
Florida Merchant Cash Advance Law
In Florida, Merchant Cash Advance law governs both Merchant Cash Advance Funders and Merchant Cash Advance Merchants.
Under Florida Merchant Cash Advance law, one of the most important factors in distinguishing a traditional loan (Usury applies) from a Merchant Cash Advance in Florida is whether the Florida Merchant must repay his Merchant Cash Advance loan unconditionally (i.e. No matter what happens). When Merchant repayment is unconditional and absolute, no matter circumstance, the Florida Merchant Cash Advance Funder is committing criminal usury because the Courts will likely rule such facts to be a loan and not an MCA.
Remember under Florida Merchant Cash Advance law a merchant is selling its future receivables but only if receivables are in fact generated by the business. If the business does not generate sufficient receipts due to adverse business conditions, beyond the control of the merchant, the the losses and changes to receivables must be borne by the Funder, i.e. the FUNDER must carry the loss if revenues decrease.
A Florida merchant’s legal duty is to deliver future account receivables to the MCA Funder, but only if the business is a going concern and actually generating receivables.
In other words; Unconditional re-payment of a Merchant Cash Advance, is illegal in Florida.
One of the most essential components of a bona fide Florida Merchant Cash Advance rather than a traditional loan, is that the Merchant does not have to unconditionally repay the loan(s).
A Merchant is selling its future receivables, but only to the extent that receivables are generated by the business.
Legally in Florida, if the Florida Merchant does not generate sufficient receipts due to adverse business conditions, natural disasters or other incidences beyond the control of the Merchant, the Merchant Cash Advance Funder must suffer the loss.
In turn, the Merchant, agrees not to engage in fraud or other practices that intentionally denies the Merchant Cash Advance Funder its purchased receivables. In other words, at loan inception, the Florida business owner Merchant guarantees that its business will not breach any clause in the Merchant Cash Advance contract.
If the Merchant’s obligation to deliver the Funder future receivables is conditioned strictly upon the continuance of the merchant’s business and in turn the generating of actual receivables, the cash advance transaction will not be considered a loan and not subject to commercial usury laws or state licensing laws that apply to traditional loan transactions.
If one reviews the Common Law, one will find that for a Florida “Merchant Cash Advance” to be found to be a Loan, and subject to a state usury laws as well as licensing requirements, the advance must be repayable by a Merchant to the Funder no matter what happens and without exception.
On the other hand, Florida MCA Law holds that if the obligation to repay is conditional with exceptions to repayment, the transaction generally will not be a Florida loan. This Common Law rule applies to Florida as well as all 50 States.
COURTS VIEW ON A LOAN VERSUS A MERCHANT CASH ADVANCE IN FLORIDA
The archetypal description of whether a transaction is a sale of future receivables or a loan, the U.S. Second Circuit Court of Appeals described the distinction as follows:
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