September 9, 2019

Partner Kate Fisher comments for Green Sheet on merchant cash advance disclosures

On September 9, Green Sheet published an article outlining the definition and regulatory requirements of nonbank finance vehicles, such as merchant cash advance (MCA). Several industry professionals were interviewed for the story, including Hudson Cook Partner Kate Fisher, whose practice focuses on small business financing and MCAs. Kate noted that small and medium-sized businesses need transparent pricing disclosures to evaluate the total cost of capital and weigh the benefits of different types of available financing.

Kate told Green Sheet that she has seen increased regulatory pressure on MCAs, particularly among brokers who sell MCAs while acting as settlement companies. Some act in bad faith, which created problems for legitimate brokers. "The FTC is very interested in MCA," Kate said. "By and large, the industry has good, compliant practices. Stakeholders need to implement formal policies and procedures to demonstrate what they are doing and how they comply with the law." Kate encourages funders to get involved in government affairs and lobbying efforts.

Kate represents banks, finance companies, private equity and investment bank investors, merchant cash advance companies, and small business lenders establishing new programs and products, and conducts due diligence and compliance reviews of consumer lending and business financing portfolios. She assists clients with compliance with state and federal consumer protection and related laws as they develop and maintain mortgage lending, automobile finance and other credit programs. Kate is a founding member of the Alternative Finance Bar Association, an organization of attorneys who represent merchant cash advance companies and lenders providing financing to small businesses. She has testified before the United States House of Representatives Small Business Subcommittee regarding improving small business capital access and recently appeared several times before the California legislature and New Jersey Senate Committee on Commerce regarding proposed disclosures for business finance transactions.

Click here to read the Green Sheet article.

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