A Merchant Cash Advance (“MCA”) allows an MCA provider (“buyer) to purchase future credit or debit card sales from the merchant (“seller”). The payback amount depends on the merchant’s sale volume. Merchant Cash Advances differ from loans because the buyer of the future receivables takes on the risk of non-payment. When a Merchant Cash Advance is constructed correctly, it will not be considered a loan and will not be subject to state usury laws. However, while the original intent was to provide small businesses with an alternative to traditional loans, predatory lenders have disguised their usurious loans as MCA’s to circumvent state usury laws and charge interest rates that exceed the maximum allowed.
Irrespective of the size of your business, companies should have an employee handbook or manual. Employee handbooks can provide certainty and structure to your operations as well as place your employees on notice as to what you expect from them. Employee handbooks do not have to manage every aspect of your business. In fact, companies should avoid including within a handbook details regarding its operations that are subject to frequent change or policies and procedures the company will not enforce. At the same time, companies should not attempt to use form handbooks; one size does not always fit all.
An innovative idea or untapped market niche does not automatically translate into commercial success. If you are forming your own business, it must be built upon a proper foundation. The choice of entity and the structuring of ownership agreements are critical elements that are often overlooked or set up improperly. This is how a business litigation or business planning lawyer can help.