The Federal Trade Commission (FTC) has recently started investigating the merchant cash advances industry. The decision followed the FTC Commissioner Rohit Chopra’s call on eliminating deceptive small business funding practices. If you want to know more about the topic and discover a unique and exceptional merchant cash advance (MCA), you’re at the right place.
FTC’s MCA Probe
The diversification process taking place in the small business lending industry has resulted in additional disruptions in the space. These include both regulation and security concerns. Of course, the lending platforms available in the online marketplaces can’t be isolated from all these happening changes in the field.
The Federal Trade Commission has recently decided to start an investigation into the deceptive contract terms that MCA providers often offer to small business owners. So, this is already a new situation for small- and medium-sized business (SMB) lending companies. Those who’re “generous” with unfair contract terms, must “tighten their belts.” Others have nothing to worry about.
In fact, the government has never paid such attention to the MCA industry before. Cash advance providers claim lending laws and those that protect individual consumers aren’t typical of their industry. The most recent research available shows that the MCA industry extended $17 billion of credit in 2017.
As you see, such law enforcement initiatives are something unique for the space. The industry lacked enough regulation in the past, thus making regulators classify MCAs as non-loans. That’s why personal loan protections under state and federal law have been unusual for MCA providers.
Fair & Reliable Cash Advances You Need
The New York attorney general has got down to investigating whether MCA lenders are abusing the NY’s court system. In 2018, the office subpoenaed records from the largest user of confessions among MCA companies.
Well, such government attention must be stemming from the fact that MCAs are gaining more and more popularity among small business borrowers. Specifically, an MCA from alternative online lenders is increasingly turning into the go-for option for many business owners. They’re interested in MCAs more as a strategic option than just a last chance.
What about you? Do you know where you can get a safe and affordable MCA? If not, consider working with FirstAmericanMerchant.com, a BBB-accredit alternative online lender and an award-winning payment processor that specializes in the high risk space. First American Merchant (FAM) offers its popular cash advances at the cheapest possible rates and with the most reliable terms in the industry.
Alternative financial institutions are playing a huge role in helping small business borrowers enjoy a faster, digital way to access the necessary working capital. This new reality has made banks develop their own digital funding solutions so to fight the competition in the field.
Overall, the competition in the financial industry is growing rapidly. Regulators are making their watch over data protection stronger. Otherwise, they won’t be able to overcome the growing challenges associated with the increasingly digital lending space.
To sum up, the FTC has started an investigation into dishonest practices applied by MCA providers. The goal is to make the MCA industry more regulated and fair to merchants.