News

May 1, 2019

Does your merchant cash advance company pass the scrutiny test? Catherine Brennan comments for deBanked

Does your merchant cash advance company pass the scrutiny test? Catherine Brennan comments for deBanked

deBanked magazine interviewed Partner Catherine Brennan for a comprehensive article on how the merchant cash advance business has come under repeated fire of late from regulators, legislators and customers. The article offers pointers to help merchant cash advance companies succeed despite ongoing challenges from a legal, regulatory, business and public relations perspective.

Confessions of Judgement (COJs), in particular, are under intense scrutiny. Experts say it is incumbent upon funders to ensure they are used in a responsible and proper manner, especially amid political and regulatory uncertainty.

According to Catherine, it would be irresponsible and potentially actionable to execute on a COJ simply because the merchant doesn't remit receivables the merchant cash advance company purchased because he didn't generate receivables. To be lawful, the COJ has to be based on a breach of performance under the agreement. Fraud, for instance, is actionable. But simple failure to remit receivables because the business has failed is not.

Catherine primarily assists investors in the consumer financial services and alternative business funding sectors. She engages in credit due diligence on behalf of investors in fintech firms, bank partnership platforms, small business lenders, merchant cash advance companies, consumer finance companies, title loan companies and payday lenders.

Click here to read the deBanked article.


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