We have written extensively on what Merchant Cash Advance companies are most likely to sue small business owners. Our team regularly collects the MCA Company data to understand trends, strategy to help our clients, as well as better advise our legal team on the actions of MCA companies. We also track specific data on MCA brokers whose actions hurt MCA companies and the small business owner.
This report provides an overview of who the MCA companies are who are most likely to sue small business owners who take Merchant Cash Advances. Beacon Client Solutions is dedicated to helping small business owners who have been victims of predatory MCA companies and brokers.
By Thomas Tramaglini, Chief Operations Officer
Our Research.
Each week, hundreds of lawsuits are filed in New York, Florida, Texas, and basically any place which favors MCA companies. Beacon Client Solutions is a business consultancy that specializes in helping small business owners who are being sued by predatory MCA lenders.
We believe (because we see it) that small business owners are usually taken to town by MCA companies and brokers causing harm to their businesses, ultimately the small business owner personally.
Several years ago before we rebranded, we began collecting and analyzing these data to inform our work in the industry. Our data include general data on MCA companies, their trends, the attorneys they use, as well as their performance through litigation and other tools that MCA companies commonly use against small business owners.
Data, Data, Data
Little by little, our organization has built the best and largest data warehouse regarding the MCA industry. Using thousands of cases which are held in the public record, we have established a set of tools which we use to inform our clients, small business owners, as well as our legal team.
We also believe that it is beneficial to expose the trends of MCA companies who go mostly unrestricted and unregulated because their Merchant Cash Advances are not considered loans. And while many attorneys have fought to better regulate the industry, they have not been successful because the courts have affirmed that MCAs do not fall under usury laws.
Who are the most litigious Merchant Cash Advance Companies?
In our previous articles we have reported on MCA lawsuits yearly to our clients. This year, we saw a major uptick in cases filed by MCA companies so we are now reporting updates in these data quarterly.
So, who are the MCA companies who file the most lawsuits?
Within our research, we pulled data we collected from every state. Since January 2022, we found over 10,000 lawsuits filed by MCA companies, which we have broken down and analyzed.
For this article, we found and ranked the Top 10 MCA companies who are most likely to sue small business owners. That is, we track who is filing lawsuits, who is not, and what happens.
The table below reflects the 10 MCA companies who file the most lawsuits. We do not have access to how many Merchant Cash Advances each one of these companies hand out, or the overall amount as well. Real lenders are required by law to inform how many loans they provide, as well as the amounts they lend. We also note that we have no idea of any default rates of any of these companies. However, we have seen data from sources such as the Securities and Exchange Commission which suggest that default rates can be as high as 50%. This is not surprising given the novice underwriting work (if it can be called that), unreasonable payback terms, as well as terrible collections schemes which occur.
We also note that since the beginning of 2022, nearly 400 different MCA companies have filed lawsuits against small business owners. The lawsuits filed below are just a fraction of the lawsuits filed.
For the second time in a row, Prosperum (Arsenal) leads the pack with nearly double the number of lawsuits filed compared to the test of the MCA companies. Second was Fenix, followed by CFG and Silverline. Finally, The Smarter Merchant earned the 5th spot by hitting the century mark with 100 lawsuits filed.
Our List of the MCA Predators Who Have Sued Most
Dr. Thomas Tramaglini is the Director of Operations and Negotiation for Beacon Client Solutions, a company that supports small businesses on a host of fronts, especially MCA debt. Thomas has been a small business owner for many years, as well as held leadership positions in several organizations and companies. Thomas holds a B.A. in History, as well as Masters and Doctorates in Organizational Leadership from Rutgers University, The State University of New Jersey.
Disclaimer: Beacon Client Solutions is not an accountancy, or a law firm. We are business consultants. While Beacon works with outstanding attorneys and accountants, we cannot and do not provide legal or tax advice. All of our work is connected to those who are legally certified to give such advice. Beacon does have a longstanding body of work in MCA resolution and understands what small business owners deal with, specific to MCA. Beacon Client Solutions serves clients in all 50 states, Puerto Rico, Mexico and Canada.
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