are merchant cash advances illegal

There’s been a lot of talk about merchant cash advances, recently. Many people have even questioned whether or not they’re illegal. This question is interesting. It’s suspected that many banks and other lenders question the legality because they just seem too convenient to be legal. This article will explain what merchant cash advances are and whether or not they are indeed, legal.

Most people understand the term “cash advance” from using credit and charge cards. When we are short on cash, we simply go to an ATM or bank and withdraw funds as an instant loan against our credit. The process is simple and beneficial to many people who need cash for an emergency, unexpected expense, or simply just need cash in hand. The fees and interest rates with these advances vary from card to card. Some credit cards offer no fees and low interest rates for the service. Others cards offer interest rates and fees that are higher than what’s charged for a purchase. Customers who are conscious of interest and fees typically avoid using cash advances to save money. This is different than an optional overdraft allowance from a debit card. This is typically a very expensive service as banks are allowed to charge the customer non-sufficient funds fees. This can be quite expensive and most people try to avoid using the service unless absolutely necessary.

Merchant cash advances work in a different manner than these other services. They provide companies with cash flow if sales happen to be in a slump. The funds can be used for a variety of other reasons as well. Business upgrades and covering payroll sometimes make it necessary for business owners to seek out this type of service.

Merchant cash advances are technically not loans. They work by lending on future sales and income. They’re typically provided by credit card processing companies. Due to them not being a loan product, there isn’t much regulation of these products. The draw to them is that they’re able to provide a business owner with cash without having a lengthy underwriting process. Invoice factoring is a similar service that has recently become popular. This service uses outstanding invoices and receivables balances as the basis for the loan. Both services are typically able to be funded on very short notice. Many small business owners who need the cash immediately often will turn to this service due to its quick processing and funding time. Another benefit that small business owners enjoy with merchant cash advances is that the payments are simply deducted from their daily credit sales. The bulk of the loan becomes due at a future date. The daily credit deduction is a small amount that’s also applied to the balance.

Opponents of the services argue that these services should be considered loans. Some even go as far as to challenge the legality of the services. Obviously, at this time merchant cash advances are certainly legal. The opponents claim that the services are priced much higher than any loan product and should be subjected to usury laws. The problem with this is that while the fees may be higher than a typical loan, the services are highly sought out by small business owners. To take away the convenience factor could harm many businesses. Also, the fees and small payment amounts aren’t considered to be harmful to these customers. For this reason, this source of funding is critical to the small business community.

The problem with business owners seeking out other sources of funding is that often they’re often unable to qualify for a traditional loan. Even business lines of credit require a significant and well established business credit record. Many new small business owners wouldn’t be able to meet these requirements. Merchant cash advances offer these businesses the cash they need. Another point to consider is that many small business owners tend to experience unexpected events and emergencies. Getting a loan is simply not an option when an expense needs to be covered almost immediately. In summation, merchant cash advances provide small business owners with a valuable service. They’re able to easily qualify and are able to use the money to cover things that may be critical to the business’s survival. These options should continue to be a product that’s accessible to small business owners.

what does a personal injury lawyer do

Have you recently experienced a serious injury? If so, then you may be entitled to legal compensation. A personal injury is a legal term to describe trauma to the body, mind, or emotional wellbeing. This term is distinguished from damage to personal property. A San Diego personal injury lawyer works to provide legal representation to someone who is suffering from an injury. They tend to practice in tort law; a tort is a civil wrong that causes harm or loss to a victim.

Personal Injury Types

There are different types of negligent acts that could lead to a personal injury case. One of the most common causes is automotive accidents, which covers car collisions, truck accidents, and motorcycle accident. Transportation accidents can also occur from bike accidents, plane accidents, boating accidents, or pedestrian accidents. Some cases are concerned with the liability of a particular premise. A personal injury could also include falls, slips, animal attacks, construction accidents, nursing home abuse, and neglect. Medical malpractice may also be represented in a personal injury case.

If you are unsure about whether a personal injury attorney would cover your case, feel free to ask a legal firm. Personal injury attorneys can explain what types of injuries are able to be represented.

Types of Compensation

Legal compensation typically depends on the individual game and the kind of damages that the victim has suffered. When there is a significant loss or damage, the plaintiffs will likely be entitled to a high claim. A significant amount of damage may include:

  • Loss of income.
  • Medical expenses.
  • Loss of job capability.
  • Pain or suffering.
  • Loss of support.
  • Emotional distress.

What a Personal Injury Lawyer Does

The legal process usually depends on what kind of personal injury case the plaintiff has. Generally speaking, a personal injury lawyer will start by investigating claims and gathering evidence for the case. The lawyer might charge a contingency fee or screen the client for evaluation. The lawyer may decide to not take a case when there isn’t a viable win for that case. In the case of a personal injury, somebody must be legally responsible for the victim’s damages. For example, a doctor or medical practice would be liable if a personal injury occurred to a patient during surgery.

Once enough evidence is gathered go a case, the lawyer will move on to other matters. If insurance is involved, the lawyer will negotiate with the insurance company by sending letters and preparing pleadings for a fair settlement. At the height of a personal injury case, the attorney will represent the plaintiff in court.

The Benefits of a Personal Injury Case

A personal injury lawyer will ensure that all of the necessary steps are taken to follow the legal process in an accurate manner. Not only will the attorney help to walk the plaintiff through the legal process, but the attorney also will provide all the important information needed for the plaintiff to collect the benefits. If a personal injury case is successful in court, the person who has suffered damages will be fairly compensated.

How startups can use reverse mergers to go public?

When you’ve started your own business and are considering taking it public on the stock exchange, there are a variety of methods of doing so that you can select from. One option available to you is to go public via a reverse merger. Although this type of merger comes with its own set of risks, the benefits may be worth it.

What Are Reverse Mergers?

reverse merger is a type of merger that occurs when a private company like yours acquires a company that is already public. Similarly to a standard merger, both companies become a single entity. When acquiring a public business through a reverse merger, your company will also become public. By using this method, you will be able to avoid the many complications that can occur when taking your company public with an IPO.

Although they may not directly concern smaller businesses and startups, there are a couple of other actions that constitute a reverse merger. Any instance of a smaller company acquiring a larger one is referred to as a reverse merger. The same is true when a company that is losing money acquires a company that is making profits. For a startup business, the only type of reverse merger that matters is the first one. Understanding how you can benefit from this merger may help you go public earlier than you had originally thought possible.

How Reverse Mergers Are Useful

When you’re attempting to build your private startup into a larger publicly traded company, there are a variety of ways in which reverse mergers can be useful. For one, you will become a private company without needing to go through the extensive IPO process, getting a hard money loan, which also means that you won’t need to pay as much money in order to be listed on the stock exchange. With standard mergers and acquisitions, there are times when the merger will lead to a substantial reduction on the amount of competition within the market. If the effect is believed to be too negative, it’s likely that the merger will be put on hold. A reverse merger does not cause a negative effect with the market, which means that it won’t be declined for this reason. This merger will also help to reduce your overall taxes.

Before you decide to engage in a reverse merger, keep in mind that running a public company is completely different than running a private one. Although a reverse merger comes with a wide range of benefits, this approach can lead to failure if you or the managers within your company aren’t prepared to run a public business. If you believe that you’re prepared to do so, there are hardly any downsides with this approach as long as you can afford to purchase a public company.

What Is An IPO?

To best understand how beneficial it is to go public via a merger as opposed to an IPO, you should be aware of what an IPO is and what the process entails. IPO stands for initial public offering and refers to the initial sale of stock that you allow for the public. While your startup is private, the shareholders will be comprised entirely of a small set of early investors that might include your friends and family or venture capitalists. When you go public with your startup via an IPO, institutional investors and individual investors will be able to purchase stock whenever they please.

While you’ll have many more responsibilities once you take your business public, doing so allows you to raise more money and possibly expand beyond what you were able to do with the early investments that you received. Even though there are a variety of benefits associated with undergoing the IPO process, there are also many issues with the method when compared to a reverse merger. The expenses are higher and the process is lengthier since you’ll likely need to retain an investment bank for their underwriting services. One of the riskier aspects of the IPO process is that it’s possible that the public won’t accept the price that you’ve set for your IPO, which can be very damaging to your company and its stock price once you’ve been listed on the stock exchange.

How Startups Can Use Reverse Mergers to Go Public

Before you decide whether or not you want to take your company public, you should know that it’s generally advisable that you only do so once you have at least $100 million in total revenue. As touched upon previously, private startups can go public through a reverse merger by purchasing a public company. This company will usually be a shell corporation due to their lack of assets, which makes it easy for you to merge with the dormant company. A reverse merger can take anywhere from 1-4 months to complete. On the other hand, the IPO process can take upwards of a year before it’s finalized.

When you take hold of a business that is already listed on the stock exchange, you will immediately be listed on the stock exchange as well, which allows you to deftly avoid the lengthy IPO process. By utilizing this process for your startup, you won’t need to depend on current market conditions when going public. During the 8-12 months of the IPO process, it’s possible that the market conditions will suddenly and without warning become unfavorable to you, which can put a stop to the process and undo months of work. With a reverse merger, this entire process is avoided. While a reverse merger can take several months to complete, the value it can provide to your company and its shareholders is immense.