​Voiding Out Your Illegal MCA Contracts! New Landmark Kapitus Court Ruling Applies To All NYS Merchant Cash Advance Contracts. Opt Out of All Business Usury Loans With RAMVC!!!​

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In a bustling downtown area, Sarah, a small business owner, found herself struggling to keep her cafe afloat after a downturn in sales. Desperate for cash flow, she turned to a Merchant Cash Advance ("MCA") company that promised quick funding in exchange for a percentage of her daily sales. What she didn't realize was that her contract contained potentially illegal terms.​ The MCA contract stipulated fixed daily repayments based on a percentage of her receipts, but there were no provisions for adjusting those payments according to her fluctuating sales. Months passed, and as her business faced continued challenges, Sarah fell behind on her payments. The MCA company swiftly initiated legal proceedings against her for breach of contract, demanding the outstanding balance.

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Meanwhile, a recent court ruling in New York, known as the Kapitus Decision, had begun to circulate among businesses like Sarah’s. The Court denied summary judgment in a case concerning an alleged breach of contract related to MCAs, raising critical questions about the validity of such agreements.

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 The ruling determined that many MCA contracts could be classified as usurious loans rather than legitimate purchase    or sales of future business receivables. This designation would render the majority VOID under brand new NYS case law. 

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As Sarah navigated her legal challenges, she learned about the implications of the Kapitus ruling. It was revealed that:

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• Flat Repay Equals a Usury Loan: Under NYS law, MCAs should NOT impose fixed repayments. If repayments are set as fixed amounts rather than adjusting based on real-time business revenue. They are deemed loans and can be classified as criminal usury!

• Lack of Reconciliation Provisions: Legitimate MCA agreements 'must' include provisions that adjust repayments based on fluctuations in business income. The absence of such terms suggests the contract is an illegal loan!

• Finite Term Render MCA Invalid: True MCA contracts should NOT have fixed repayment terms. Payments should continue as long as the business generates income, with NO specific end date!

• PG Shift Contract To Usury Loan: Including Personal Guarantees ("PG") in MCA contracts shifts the agreement from a 'contingent' purchase of future sales to an 'unconditional' loan, violating the intended structure of MCAs!

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With the Kapitus ruling in her favor, Sarah felt empowered to challenge the MCA company's uncompliant contract. Armed with the knowledge that many MCAs like hers could be deemed void due to illegal terms, she reached out to a professional in regard to MCA contract disputes and remedies. To support her efforts, Sarah discovered our RAMVC solution trueUP, a service dedicated to helping MCA holders like herself navigate the complexities of their agreements. Together, we prepared a demand based on the Court's findings, with plans to leverage the ruling to avoid enforcement of her contract. trueUP offers comprehensive analysis, investigations, and enforcement strategies for illegal and uncompliant MCA contracts, enabling vulnerable businesses to identify 'illegal', 'unenforceable', and 'voidable' contracts while preparing a transparent legal paper trail that exhausts all existing binding remedy deterring any successful chance of lender legal action.

trueUP Provides:

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• Enforcement Support: Assist MCA Holders in exercising 'existing' beneficial contractual rights while carefully preparing 'detail-specific' demands for potential legal actions hopelessly initiated by any funder(s).

• Defense Preparations: Guide MCA Holders through landscape of contracts, providing crucial data formulation of effective real-time reconciliation, refund, and MCA void-out demands for quick 24-hour deployment.

• Remedy Exhaustions: trueUP helps identify and deploy all available contract remedies, drafting very well-prepared demands that challenge unfair practices or requests by MCA companies failing contract compliance.

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As the case progressed, Sarah became a symbol of resilience for many small business owners facing similar predicaments. The Kapitus ruling, combined with resources provided by trueUP, opened the door for her to challenge illegal usury MCA agreements and reclaim control over the business's revenue.​

(The 10/01/2024 Kapitus Ruling and Its Immediate Applicability to 'ALL' NYS Merchant Cash Advances)

The Kapitus ruling has significant implications for all NYS Merchant Cash Advance ("MCA") contracts, potentially rendering many agreements 'VOID' due to various violations of state usury laws.

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Key Points:

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1. Usury Definition in NYS:

   • An MCA is defined as a purchase of 'future business' receivables, NOT a loan.

   • Contracts with flat, fixed repays are considered usurious loans, criminal with 25% Interest!

2. Court Findings on Usury:

   • Contracts 'must' include provisions for adjusting repays based on 'real-time' sales revenue.

   • Lack of 'clear reconciliation' clauses undermines the legitimacy of the MCA agreement.

3. Finite MCA Contract(s):

   • True MCA contracts should NOT have specific end dates or fixed repay schedules.

   • Any finite terms 'violate' the intended structure of an MCA.

4. Personal Guarantee (PG):

   • PG clauses turn MCA contracts into 'unconditional' loans, which are subject to usury laws.

   • Such contracts may be deemed 'unenforceable' if they are classified as usurious.

 

Why This Matters:

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• Protection for Borrowers:

  •  Many MCA companies operate in violation of Usury Laws.  The new landmark Kapitus ruling provides a legal framework for struggling MCA Holders to challenge, contest, control, and legally void-out, 'unenforceable' illegally enforced, framed contracts.

• Encouraging Compliance:

  • The ruling emphasizes the necessity for MCA companies to adhere to strict legal standards involving real-time reconciliation protocol and contract terms.

• Empowering Small Business Owners:

  • The decision serves as a critical opportunity and tool for small business owners like Sarah, enabling them to challenge, contest, control, and legally void-out, 'unenforceable' illegally enforced, framed contracts protecting their rights against predatory lenders!

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Take Action: If you are facing challenges with MCA repayments, in light of the Kapitus ruling trueUP is the most cost-effective solution for MCA Holders to analyze and challenge contractual rights if not help negotiate complete 'void-outs'. 

 

RAMVC is NOT a financial advisor or legal firm offering any advice. We're a business group spearheading MCA compliance measures.
(trueUP performs completely transparent analysis and investigations of MCA holder contracts seeking recoup routes to saving monies)