In one paragraph
New York is where MCA law is made. Nearly every advance contract in the country selects New York law and courts. New York requires APR-style cost disclosure on commercial financing offers, and since 2019 its courts will not enter confessions of judgment against out-of-state debtors. New York businesses, however, can still be hit with a COJ, and a New York judgment reaches your bank through a restraining notice within days.
Disclosure
New York’s Commercial Finance Disclosure Law requires providers of commercial financing under a size threshold to disclose total cost, an APR or equivalent, payment amounts and prepayment terms at the time of an offer. If a funder’s term sheet shows only a factor rate, that is a compliance question worth raising, and worth noting in any later negotiation.
Confessions of judgment
In 2019 New York amended CPLR 3218 so that its county clerks will not enter a COJ against a debtor who resides outside New York. For New York businesses the tool still works: a signed affidavit lets the funder obtain a judgment without suit or notice. Check your agreement and any separate affidavit signed at funding.
Enforcement
With a judgment, the funder’s attorney serves a restraining notice under CPLR 5222 on your bank, freezing up to twice the judgment amount. Because you are in-state, no domestication step is needed. Vacating a judgment for defective COJ entry or service is possible and common; speed matters.
Personal guarantees and liens
Guarantees in MCA agreements are typically performance guarantees, triggered by breach such as changing bank accounts or blocking debits rather than by revenue shortfall. UCC-1 liens are routine; confirm termination after payoff.
What to do first in New York
Pull your agreement and any COJ affidavit today. If you are a New York business with a COJ, treat the first missed payment as urgent and get counsel or a relief firm engaged before the funder files.
General legal information as of September 2026, not legal advice, and no attorney-client relationship is created. Statutes and case law change; confirm with a New York-licensed attorney before acting. Zogby shares ownership with Delancey Street, a debt relief company it rates.