Structuring Merchant Cash Advances: Alternative Financing for Emerging Companies, Lessons From Recent Cases
Documenting True Sale and Contingent Payments; Avoiding Loan Categorization; UCC, Licensing and Usury Considerations
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will equip finance counsel to structure and document merchant cash advance transactions. The panel will discuss recent cases that distinguish merchant cash advances (MCAs) from conventional loans, and outline best practices for avoiding loan categorization, perfecting a UCC security interest, and complying with state licensing and usury statutes.
Outline
- Merchant cash advances distinguished from conventional loans
- Sale of assets (accounts), not a loan secured by assets
- Payments contingent on receipts as opposed to a payment of agreed interest rate
- Not subject to usury statutes
- Not subject to licensing requirements placed on financial institutions
- Structuring and documenting MCAs
- UCC and bankruptcy treatment of MCAs
- Recent case law and lessons learned
Benefits
The panel will review these and other key issues:
- Why is a “true sale” important in structuring an MCA?
- How do payment structures differ between an MCA and a traditional loan?
- What does recent case law suggest about structuring MCAs?
- How are MCAs treated in bankruptcy?
Faculty
Catherine M. Brennan
Partner
Hudson Cook
Ms. Brennan assists national and state banks, investment banks, commercial finance companies, savings associations,... | Read More
Ms. Brennan assists national and state banks, investment banks, commercial finance companies, savings associations, mortgage bankers and other licensed lenders in the development and maintenance of nationwide consumer mortgage and motor vehicle finance programs. She engages in consumer credit due diligence on behalf of investors of mortgage loan companies, mortgage loan servicers, Internet lenders, consumer finance companies, title loan companies and payday lenders.
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Stefan Savic
Partner
Shipkevich
Mr. Savic represents clients in all stages of litigation and alternative dispute resolution proceedings. His litigation... | Read More
Mr. Savic represents clients in all stages of litigation and alternative dispute resolution proceedings. His litigation practice focuses on commercial litigation in federal and state courts in various subject matters ranging from civil RICO claims to misappropriation of trade secrets, unfair competition, and breaches of fiduciary duties. He also assists businesses in avoiding costly litigation by assuring that clients have safeguards in place at all stages of business management. He works with clients on formation, employment, shareholders, and licensing agreements.
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Mark T. Dabertin
Special Counsel
Pepper Hamilton
Mr. Dabertin has over 25 years of broad-based experience in financial services law and consumer and regulatory... | Read More
Mr. Dabertin has over 25 years of broad-based experience in financial services law and consumer and regulatory compliance. His career includes extensive experience in consumer lending, safety and soundness, and anti-money laundering. His work in consumer and regulatory compliance at large financial institutions has been marked by innovations that resulted in fundamental structural changes to existing firm-wide compliance activities, including with respect to regulatory change management, risk assessments, and vendor management. Bank examinations that he either managed or co-managed while working in consumer and regulatory compliance positions included exams focused on fair lending, data privacy, and add on products. For most of these examinations, he authored the bank’s written responses to any legal or regulatory issues cited in supervisory letters.
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