Category Archives: Sale vs. Loan

MCA Funder Fails to Defend Usury Counterclaim, Court Voids Agreement and Awards Damages to Defendants

An Florida MCA funder filed a breach of contract action against a business. The funder alleged that the business had failed to remit payments required by the merchant agreement. The funder sought to recover the amounts owed from the business … Continue reading

Posted in Criminal Usury, Florida, Merchant Cash Advance, Sale vs. Loan, State Court, Usury Cap | Comments Off on MCA Funder Fails to Defend Usury Counterclaim, Court Voids Agreement and Awards Damages to Defendants

New York Court Recharacterizes Merchant Agreement as Loan, Vacates Confessed Judgment and Voids Transaction

A business received financing from an alternative small business funder. The parties’ agreement stated that in exchange for the financing provided, the funder would receive 11.02% of the business’ daily receipts which the funder would take by debiting $331.82 from the … Continue reading

Posted in Criminal Usury, Merchant Cash Advance, New York, Recharacterization, Sale vs. Loan, State Court | Comments Off on New York Court Recharacterizes Merchant Agreement as Loan, Vacates Confessed Judgment and Voids Transaction

U.S. District Court Holds that Purchase of Future Settlement Proceeds Violates Kansas Usury Law

A litigation finance firm advanced funds to an individual that was pursuing a personal injury case against a gas can manufacturer. After receiving a series of cash advances, the individual filed suit against the financing firm in U.S. District Court alleging that the … Continue reading

Posted in Civil Usury, Federal Court, Kansas, Sale vs. Loan, Usury Cap, Usury Exceptions | Comments Off on U.S. District Court Holds that Purchase of Future Settlement Proceeds Violates Kansas Usury Law

Citing Growing Body of Case Law, New York Court Finds Sale of Future Receivables is Not Subject to Usury Laws

A small business funder entered into an agreement with a business to purchase a portion of the business’ future receivables for an upfront lump sum. In exchange for the lump sum payment, the funder was to receive a portion of the … Continue reading

Posted in Civil Usury, Criminal Usury, Merchant Cash Advance, New York, Sale vs. Loan, State Court | Comments Off on Citing Growing Body of Case Law, New York Court Finds Sale of Future Receivables is Not Subject to Usury Laws

Another New York Court Upholds Bar on Corporate Usury Defense

A welding company sold a portion of its future business receivables to an MCA provider for a lump sum purchase price. When the welding company failed to remit the purchased sale proceeds as required by the parties’ agreement, the MCA provider filed … Continue reading

Posted in Merchant Cash Advance, New York, Sale vs. Loan, State Court | Comments Off on Another New York Court Upholds Bar on Corporate Usury Defense

Court Finds Contract to Be Sale of Property Not Loan of Money, Usury Claim Rejected

A buyer purchased an apartment from a seller. The contract for deed required the buyer to make a down payment and 180 equal monthly payments of amortized principal and interest.  Following the last payment, title to the apartment would pass from … Continue reading

Posted in Civil Usury, Sale vs. Loan, State Court, Texas | Comments Off on Court Finds Contract to Be Sale of Property Not Loan of Money, Usury Claim Rejected

Sale of Membership Interest Not a Loan

Rahmani v. Banet, 2015 Tex. App. LEXIS 4676 (Tex. App. Fort Worth May 7, 2015) A business ownership transfer gone bad.  The plaintiff seller alleged that he had agreed to sell his 50% membership interest in the business to the … Continue reading

Posted in Sale vs. Loan, Texas | Comments Off on Sale of Membership Interest Not a Loan