Whether a merchant cash advance is a sale of future receivables or a loan in disguise decides whether usury law applies, and it shapes every negotiation over a large stack. Courts do not agree on one answer. We read 59 decisions to see how they decide it and what tips the balance.
Key findings
- We read 59 decisions from 2017 to 2026: 27 held an advance was a loan or let a usury claim go forward, 22 held it was a true sale, and 7 left the question for trial.
- The reconciliation clause decided the most cases. Where a court found a real, mandatory reconciliation right, the funder won 16 of 16 times; where the clause was discretionary or illusory, the decision went toward a loan 21 of 21 times.
- No decision that called an advance a true sale found a fixed payment not tied to receipts, a fixed term or recourse if the business fails.
- The forum matters: bankruptcy courts in 2025–2026 went toward a loan 10 times and a sale 2 times, while New York's Appellate Division in 2024–2026 held for a sale 9 times and a loan 2 times.
- Court opinions on CourtListener that mention merchant cash advances rose from 9 in 2019 to 50 in 2025, with 76 so far in 2026. Part of the rise reflects CourtListener adding courts.
Is a merchant cash advance a loan?
It depends on the contract. Courts ask whether the funder really bears the risk that the business's sales fall short. When the agreement lets payments fall with sales through a real reconciliation right, has no fixed end date and does not let the funder collect everything if the business fails, courts call it a sale. When the reconciliation right is missing, discretionary or never honored, the debit is fixed regardless of sales, and the funder can collect the full amount whatever happens, courts are more willing to call it a loan. In our set, 27 decisions went toward a loan and 22 toward a sale. Many of the loan-side rulings only let a usury claim go forward at an early stage; they are not final findings that the advance was a loan.
How the decisions came out
59 decisions, 2017–2026.
Points from the cases that matter in a negotiation
- Ask for reconciliation in writing. In New York's Second Department, merchants who never asked for a reconciliation lost the argument that the clause was illusory (Apollo Funding Co. v. Dave Reilly Construction, 2025; Diesel Funding, LLC v. Build Retail, Inc., 2026). See the reconciliation right most merchants never use.
- Usury is mainly a defense for a company. Under New York law a corporate merchant can raise criminal usury as a defense to the funder's claim, not as its own lawsuit (Paycation Travel, Inc. v. Global Merchant Cash, Inc., 2d Dep't 2021).
- Regulators have won on the loan question. The New York Attorney General's case against Richmond Capital Group was affirmed on liability by the Appellate Division, First Department, in February 2026 (People v. Richmond Capital Group LLC). See our enforcement actions study.
- Bankruptcy courts have been more receptive. In June 2026 the bankruptcy court for the Eastern District of Louisiana treated a debtor's merchant cash advances as disguised loans in the Crosby Tugs proceeding, under New York, Connecticut and Florida law. Bankruptcy is a decision for a bankruptcy attorney; see Subchapter V bankruptcy and merchant cash advance debt and bankruptcy vs. settlement vs. restructuring.
What do courts look at?
The same few contract terms come up again and again. The table counts how often each factor was cited in decisions on each side.
| Factor | Cited in loan decisions | Cited in sale decisions |
|---|---|---|
| Mandatory reconciliation | 0 | 16 |
| Reconciliation discretionary or illusory | 21 | 0 |
| Finite term | 13 | 0 |
| No finite term | 1 | 15 |
| Bankruptcy treated as default | 8 | 1 |
| Recourse if the business fails | 16 | 0 |
| Fixed payment not tied to receipts | 15 | 0 |
| Payments tied to receipts | 0 | 9 |
| Guarantee of performance only | 1 | 6 |
| Guarantee of payment | 13 | 0 |
The decisions
| Case | Court | Year | Stage | Outcome | Holding |
|---|---|---|---|---|---|
| Kapitus Servicing, Inc. v. Southern Source, Inc. 2026 NY Slip Op 05855 | N.Y. Supreme Court, Appellate Division, First Department | 2026 | Appeal from denial of merchant's motion to vacate a default judgment (CPLR 5015(a)(3), (4)) | True sale, not a loan | “Defendants failed to establish that the underlying agreement was a loan, which is a necessary element of a defense sounding in usury” Opinion |
| Weigle v. CFG Merchant Solutions, LLC (In re Squared Up Hospitality, Inc.) Bankr. No. 4:23-bk-03540-BMW; Adv. No. 4:24-ap-00208-BMW, Doc. 139 (Bankr. D. Ariz.) | U.S. Bankruptcy Court, District of Arizona | 2026 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “Based upon the undisputed facts and the totality of the foregoing, it is the determination of this Court that the CFG Agreement is a disguised loan agreement, not a true sale of assets.” Opinion |
| Samson MCA LLC v. Across the Street Holdings, Inc. No. 6:24-CV-06601 EAW, Dkt. 32 (W.D.N.Y.) | U.S. District Court, Western District of New York | 2026 | Merchant/guarantors' motion for summary judgment on criminal-usury defense | Fact question for trial | “Because the Court cannot resolve the questions presented in Defendants' motion in their favor as a matter of law at this juncture, it joins other courts denying summary judgment where similar factual disputes were present.” Opinion |
| Blade Funding, LLC v. Build Retail, Inc. 2026 NY Slip Op 05268 | N.Y. Supreme Court, Appellate Division, Second Department | 2026 | Appeal from denial of merchant's motion to vacate a stipulation of settlement and clerk's judgment ($2.42M) | True sale, not a loan | “Taken together, these factors demonstrated that the transactions at issue were purchases of future receivables and not criminally usurious loans” Opinion |
| Culp v. Silverline Services, Inc. 2026 NY Slip Op 05077 | N.Y. Supreme Court, Appellate Division, Second Department | 2026 | Appeal from order granting merchant a preliminary injunction against enforcement | True sale, not a loan | “the plaintiff failed to establish a likelihood of success on the merits of his claim for usury, as the agreement contained a reconciliation provision and had no fixed term and bankruptcy did not constitute a default under the agreement” Opinion |
| Togut v. eProdigy Financial, LLC (In re Kossoff PLLC) Bankr. No. 21-10699 (DSJ); Adv. Pro. No. 23-01109 (DSJ), Doc. 103 (Bankr. S.D.N.Y.); cited by later courts as 2026 WL 2168916 | U.S. Bankruptcy Court, Southern District of New York | 2026 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “For the reasons that follow, the Court concludes that the transactions at issue are disguised loans.” Opinion |
| EBF Holdings, LLC v. Defiant Arms, L.L.C. 251 A.D.3d 1448; 2026 NY Slip Op 04563 | N.Y. Supreme Court, Appellate Division, Fourth Department | 2026 | Appeal from judgment on funder's summary judgment motion | True sale, not a loan | “Defendants contend that the agreement is void because it is not a revenue purchase agreement but rather a usurious loan and that the court therefore erred in granting plaintiff's motion and denying their cross-motion. We reject that content…” Opinion |
| Black Pearl Vision, LLC v. G and G Funding Group, LLC Bankr. No. 24-30948; Adv. Proc. No. 25-03143, Doc. 15 (Bankr. W.D.N.C.) | U.S. Bankruptcy Court, Western District of North Carolina | 2026 | Bankruptcy adversary proceeding | Decided on other grounds | “Accordingly, the Court declines at this stage to determine whether the Agreement is properly characterized as a loan or a sale and instead confines its analysis to whether Plaintiff has plausibly stated a claim under § 548(a)(1)(B).” Opinion |
| Crosby Tugs, L.L.C. v. Meged Funding Group (Aqua MCA Agreement) (In re Crosby Marine Transportation, LLC) Bankr. No. 26-10678; Adv. Case 26-01018, Doc. 324 (Bankr. E.D. La.) | U.S. Bankruptcy Court, Eastern District of Louisiana | 2026 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “The Court thus concludes that the unambiguous terms of the Aqua MCA Agreement substantively reveal the Debtors' complete exposure to the direct risk of non-payment of Crosby Accounts Receivables, making those agreements disguised loans unde…” Opinion |
| Crosby Tugs, L.L.C. v. Meged Funding Group (Reliance MCA Agreement) (In re Crosby Marine Transportation, LLC) Bankr. No. 26-10678; Adv. Case 26-01018, Doc. 323 (Bankr. E.D. La.) | U.S. Bankruptcy Court, Eastern District of Louisiana | 2026 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “The Court thus concludes that the unambiguous terms of the Reliance MCA Agreement substantively reveal the Debtors' complete exposure to the direct risk of non-payment of Crosby Accounts Receivables, making the agreement a disguised loan un…” Opinion |
| Diesel Funding, LLC v. Build Retail, Inc. 2026 NY Slip Op 02629 | N.Y. Supreme Court, Appellate Division, Second Department | 2026 | Appeal from denial of merchant's motion to vacate judgment and stipulation of settlement | True sale, not a loan | “Here, the defendants failed to establish that the transaction set forth in the agreement was a usurious loan.” Opinion |
| Spin Capital, LLC v. Bridgelink Engineering, LLC 2026 NY Slip Op 02296 | N.Y. Supreme Court, Appellate Division, Second Department | 2026 | Appeal from $8.23M judgment after summary judgment for funder and dismissal of RICO/criminal-usury counterclai | True sale, not a loan | “Taken together, these factors satisfied the plaintiff's prima facie burden of demonstrating that the transaction at issue was a purchase of future receivables and not a criminally usurious loan” Opinion |
| Kurtz v. BMT Capital Group, Inc. Adv. No. 25-06035-NGH, Doc. 31 (Bankr. D. Idaho) | U.S. Bankruptcy Court, District of Idaho | 2026 | Bankruptcy adversary proceeding | Fact question for trial | “By limiting its analysis to the three LG Funding factors, BMT has failed to satisfy its burden here.” Opinion |
| People v. Yellowstone Capital LLC 2026 NY Slip Op 30767(U) | N.Y. Supreme Court, New York County | 2026 | Attorney General's Executive Law 63(12) proceeding | Loan, or loan claim survives | “It is undisputed that the MCA agreements here include daily payments suggesting that they are loans with fixed finite terms.” Opinion |
| Kapitus Servicing, Inc. v. Suburban Waste Services, Inc. 246 A.D.3d 661; 2026 NY Slip Op 01127 | N.Y. Supreme Court, Appellate Division, First Department | 2026 | Appeal from denial of cross-motions for summary judgment | Fact question for trial | “We disagree that the agreements are loans as a matter of law, and find instead that the record presents issues of fact as to whether the agreements are loans or a sale and purchase of receivables” Opinion |
| Greenwich Retail Group LLC v. Moby Capital, LLC (In re Greenwich Retail Group LLC) Adv. Proc. No. 25-01106 (MEW), Doc. 50 (Bankr. S.D.N.Y.) (for publication; cited by later courts as 677 B.R.) | U.S. Bankruptcy Court, Southern District of New York | 2026 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “That allegation is sufficient to support a claim that the transaction is really a disguised loan.” Opinion |
| People v. Richmond Capital Group LLC 2026 NY Slip Op 00990 | N.Y. Supreme Court, Appellate Division, First Department | 2026 | Appeal from summary determination for the Attorney General in an Executive Law 63(12) special proceeding | Loan, or loan claim survives | “The subject agreements, although styled as MCAs, are properly characterized as loans subject to restrictions on usury” Opinion |
| Merchant Advance, LLC v. Conceptos Cuisine, LLC 2026 TSPR 15; 217 DPR ___ (No. CC-2025-0109) | Supreme Court of Puerto Rico | 2026 | Certiorari review in a collection action on a New York-law 'Agreement for the Purchase and Sale of Future Rece | True sale, not a loan | “En vista de lo anterior, nos parece apropiado concluir que el Contrato objeto de este caso fue estructurado como una compraventa de ingresos futuros y no como un préstamo.” Opinion |
| Sommers v. Global Merchant Cash, Inc. (In re Anadrill Directional Services Inc.) Bankr. No. 23-31199; Adv. No. 25-3039, Doc. 27 (Bankr. S.D. Tex.) | U.S. Bankruptcy Court, Southern District of Texas | 2026 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “Thus, GMC has not shown that the right to repayment is not absolute, and the Trustee has plausibly pled that the Agreement is a loan, not a sale.” Opinion |
| Kurtz v. Kalamata Capital Group, LLC Adv. No. 25-06027-NGH, Doc. 28 (Bankr. D. Idaho) | U.S. Bankruptcy Court, District of Idaho | 2026 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “Construing the Complaint in a light most favorable to Trustee and accepting all factual allegations as true, the Complaint adequately pleads that the Agreement may in actuality function as a loan, not a sale.” Opinion |
| Heritage Collegiate Apparel, Inc. v. Elemental Capital, Inc. Bankr. No. 24-47922; Adv. No. 25-4146, Doc. 50 (Bankr. E.D. Mich.) | U.S. Bankruptcy Court, Eastern District of Michigan | 2026 | Bankruptcy adversary proceeding | Decided on other grounds | “Alternatively, if the transactions were not loans, or if they did not require the payment of interest, then the Plaintiff has no usury claim under Michigan law to begin with. Either way, Plaintiff's usury claim under Count VIII fails.” Opinion |
| Black Pearl Vision, LLC v. Pearl Delta Funding, LLC Bankr. No. 24-30928; AP No. 25-03111, Doc. 18 (Bankr. W.D.N.C.) | U.S. Bankruptcy Court, Western District of North Carolina | 2025 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “As a preliminary matter at this stage in the case, the Court finds that the Plaintiff has adequately pled facts that plausibly support that the Agreement is a loan.” Opinion |
| JLK Construction, LLC v. Alva Advance, LLC Bankr. No. 23-50034; Adv. No. 23-4030, Doc. 93 (Bankr. W.D. Mo.) | U.S. Bankruptcy Court, Western District of Missouri | 2025 | Bankruptcy adversary proceeding | True sale, not a loan | “JLK, however, again fails to plead sufficient facts to enable the court to draw a reasonable inference that the transactions were for disguised loans.” Opinion |
| Kapitus Servicing, Inc. v. Ragtime Gourmet Corp. 242 A.D.3d 638; 2025 NY Slip Op 05921 | N.Y. Supreme Court, Appellate Division, First Department | 2025 | Appeal from denial of funder's summary judgment motion | Fact question for trial | “there are issues of fact as to whether the cash advance agreement constitutes a loan that may be criminally usurious, rather than an enforceable agreement for the sale and purchase of receivables” Opinion |
| Apollo Funding Co. v. Dave Reilly Construction, LLC 241 A.D.3d 1508; 2025 NY Slip Op 05055 | N.Y. Supreme Court, Appellate Division, Second Department | 2025 | Appeal from denial of funder's summary judgment motion | True sale, not a loan | “Here, the plaintiff established that the transaction set forth in the agreement was not a loan.” Opinion |
| Bridge Funding Cap LLC v. SimonExpress Pizza, LLC 2025 NY Slip Op 04306; cited by later courts as 240 A.D.3d 1186 | N.Y. Supreme Court, Appellate Division, Fourth Department | 2025 | Appeal from amended judgment on funder's summary judgment motion | True sale, not a loan | “Here, contrary to defendants' contention, plaintiff established as a matter of law that the agreement was a revenue purchase agreement rather than a loan” Opinion |
| Butler Trucking LLC v. CashFloit, LLC Bankr. No. 24-32443; Adv. Pro. No. 25-03004, Doc. 14 (Bankr. N.D. Ohio) | U.S. Bankruptcy Court, Northern District of Ohio | 2025 | Bankruptcy adversary proceeding | Fact question for trial | “the ultimate issue of whether the substance of the transaction was Plaintiff “selling” unidentified future receipts to Defendant is a fact-intensive issue that cannot likely be resolved without the presentation of evidence at a hearing.” Opinion |
| True Business Funding, LLC v. Guerrero A Construction Corp. 239 A.D.3d 787; 2025 NY Slip Op 03598 | N.Y. Supreme Court, Appellate Division, Second Department | 2025 | Appeal from judgment entered on summary judgment for funder | True sale, not a loan | “Since bankruptcy relieved the LLC of the obligation of repayment, the plaintiff's entitlement to repayment was not absolute” Opinion |
| O'Toole v. Radium2 Capital, LLC (In re J.P.R. Mechanical Inc.) Bankr. No. 19-23480 (DSJ); Adv. Pro. Nos. 21-07079 and 21-07082 (DSJ), Doc. 46 (Bankr. S.D.N.Y.) (not for publication) | U.S. Bankruptcy Court, Southern District of New York | 2025 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “These economic features, most fundamentally the reality that the Debtor bears the risk of non-collection of receivables with Radium2 bearing little if any of that risk, powerfully show the Agreements to be loans.” Opinion |
| Williams Land Clearing, Grading, and Timber Logger, LLC v. Apex Funding Source LLC Bankr. No. 22-02094-5-PWM; Adv. No. 23-00024-5-PWM, Doc. 119 (Bankr. E.D.N.C.) | U.S. Bankruptcy Court, Eastern District of North Carolina | 2025 | Bankruptcy adversary proceeding | Loan, or loan claim survives | “the court finds that Apex's many sources of recourse and other indicia of its lack of risk lead to only one conclusion: that the MCA Agreement is a loan, and not a sale, as a matter of law.” Opinion |
| Guttman v. EBF Holdings, LLC (In re Global Energy Services, LLC) Bankr. No. 21-17305-NVA; Adv. No. 23-00188, Doc. 42 (Bankr. D. Md.); cited by later courts as 2025 WL 1012721 | U.S. Bankruptcy Court, District of Maryland | 2025 | Bankruptcy adversary proceeding | True sale, not a loan | “In light of the foregoing, the Court concludes that the Funding Agreement constitutes a sale of future receipts, not a loan, and that the Trustee has not stated a cognizable claim based on a usury theory.” Opinion |
| Mazzoni Center v. LCF Group, Inc. No. 2:24-cv-05921-KSM, Doc. 20 (E.D. Pa.) | U.S. District Court, Eastern District of Pennsylvania | 2024 | Motion for TRO and preliminary injunction (RICO and declaratory claims under New York law) | True sale, not a loan | “This suggests repayment under the LCF Agreement is contingent, not mandatory, and that the agreement is not a loan subject to New York's usury laws.” Opinion |
| Division 5, LLC v. Fora Financial Advance, LLC No. 24-CV-6870 (JPO), ECF 31 (S.D.N.Y.) | U.S. District Court, Southern District of New York | 2024 | Opinion explaining preliminary injunction (granted Oct. 11, 2024) barring funder from collecting | Loan, or loan claim survives | “Finally, looking beyond the three factors, there are other indicia that the agreement operates as a loan.” Opinion |
| Lateral Recovery LLC v. Funderz.net, LLC No. 22-cv-2170 (LJL), Dkt. 169 (S.D.N.Y.) | U.S. District Court, Southern District of New York | 2024 | Cross-motions for summary judgment on RICO collection-of-unlawful-debt claim | Loan, or loan claim survives | “summary judgment on the issue of whether the transaction is a usurious loan is granted for Defendants as to the Third HOP Agreement, for Plaintiffs as to the First and Second HOP and BMF Agreements” Opinion |
| Oakshire Properties, LLC v. Argus Capital Funding, LLC 229 A.D.3d 1199; 2024 NY Slip Op 03943 | N.Y. Supreme Court, Appellate Division, Fourth Department | 2024 | Appeal from partial denial of funder's motion to dismiss plenary action to vacate a confessed judgment | Loan, or loan claim survives | “We therefore conclude that the amended complaint sufficiently alleges that the transaction is a loan subject to usury laws” Opinion |
| Lateral Recovery LLC v. Funderz.net, LLC No. 1:22-cv-02170 (JLR), ECF 140 (S.D.N.Y.) | U.S. District Court, Southern District of New York | 2024 | Defendants' motions for judgment on the pleadings (Rule 12(c)) | Loan, or loan claim survives | “the Court finds that Plaintiffs have adequately alleged that the Agreements were loans rather than purchases of receivables.” Opinion |
| Kapitus Servicing, Inc. v. Point Blank Construction, Inc. 221 A.D.3d 532; 2023 NY Slip Op 06087 | N.Y. Supreme Court, Appellate Division, First Department | 2023 | Appeal from denial of merchant's motion to dismiss | Fact question for trial | “Although some parts of the record suggest that the transaction was a loan, other parts of the record suggest that the transaction was instead a sale and purchase of receivables.” Opinion |
| Crystal Springs Capital, Inc. v. Big Thicket Coin, LLC 220 A.D.3d 745; 2023 NY Slip Op 05121 | N.Y. Supreme Court, Appellate Division, Second Department | 2023 | Appeal from denial of merchant's motion to vacate default judgment and dismiss | Loan, or loan claim survives | “Here, the defendants established that the agreement constituted a criminally usurious loan.” Opinion |
| US Information Group LLC v. EBF Holdings, LLC No. 1:22-cv-06661-PKC, ECF 76 (S.D.N.Y.); cited by later courts as 2023 WL 6198803 | U.S. District Court, Southern District of New York | 2023 | Motion to dismiss RICO (collection of unlawful debt) complaint | True sale, not a loan | “it does not plausibly allege that Everest loaned money to US Info, and the Complaint will be dismissed.” Opinion |
| People v. Richmond Capital Group LLC 2023 NY Slip Op 50975(U) | N.Y. Supreme Court, New York County | 2023 | Attorney General's Executive Law 63(12) special proceeding | Loan, or loan claim survives | “As discussed above, all factors lead to the inescapable conclusion that the MCAs were loans.” Opinion |
| Samson MCA LLC v. Joseph A. Russo M.D. P.C./IV Therapeutics PLLC (appeal No. 2) 219 A.D.3d 1126; 2023 NY Slip Op 04271 | N.Y. Supreme Court, Appellate Division, Fourth Department | 2023 | Appeal from money judgment after summary judgment for funder | True sale, not a loan | “Contrary to Beatrice's contention, plaintiff established as a matter of law that the agreements were revenue purchase agreements rather than loans” Opinion |
| Lateral Recovery, LLC v. Capital Merchant Services, LLC 632 F. Supp. 3d 402 (S.D.N.Y. 2022) (No. 21-cv-9336 (LJL), Dkt. 49) | U.S. District Court, Southern District of New York | 2022 | Motions to dismiss RICO complaint | Loan, or loan claim survives | “the Court concludes that the Form Two agreements are loans on their face, the Form Three agreements are not loans, and it is ambiguous whether the Form One agreements are loans” Opinion |
| The New Y-Capp, Inc. v. Arch Capital Funding, LLC No. 18-cv-3223 (ALC), ECF 208 (S.D.N.Y.); cited by later courts as 2022 WL 4813962 | U.S. District Court, Southern District of New York | 2022 | Motion to dismiss third amended RICO complaint | Loan, or loan claim survives | “the Court is persuaded that the plaintiff has sufficiently pleaded that the agreements at issue constitute usury under New York law and satisfy the RICO statute unlawful debt provision.” Opinion |
| Lateral Recovery, LLC v. Queen Funding, LLC No. 1:21-cv-09607-LGS, ECF 36 (S.D.N.Y.) | U.S. District Court, Southern District of New York | 2022 | Motion to dismiss RICO (collection of unlawful debt) claims | Loan, or loan claim survives | “On balance, the Complaint pleads sufficient facts to show that the transactions reflected in the Merchant Agreements are loans subject to usury laws.” Opinion |
| Haymount Urgent Care PC v. GoFund Advance, LLC 609 F. Supp. 3d 237 (S.D.N.Y. 2022) (No. 1:22-cv-01245-JSR, ECF 86) | U.S. District Court, Southern District of New York | 2022 | Motion to dismiss putative class RICO (collection of unlawful debt) complaint | Loan, or loan claim survives | “the Court concludes that the Complaint has adequately pled that the MCA agreements at issue here function as loans.” Opinion |
| Slate Advance v. Saygan Global Steel, Ltd. 206 A.D.3d 782; 2022 NY Slip Op 03761 | N.Y. Supreme Court, Appellate Division, Second Department | 2022 | Appeal from order denying funder a default judgment and letting merchant answer late | Loan, or loan claim survives | “the Supreme Court providently exercised its discretion denying the plaintiff's motion and in granting the defendants' cross motion in the interest of justice based on their proposed affirmative defense that the agreement constituted a crimi…” Opinion |
| Fleetwood Services, LLC v. Ram Capital Funding, LLC No. 20-cv-5120 (LJL), Dkt. 87 (S.D.N.Y.); cited by later courts as 2022 WL 1997207 | U.S. District Court, Southern District of New York | 2022 | Merchant's motion for summary judgment (usury-based RICO and contract claims) | Loan, or loan claim survives | “Viewing the Agreement as a whole, the Court concludes that it is a loan and not a contract for the purchase of future receivables.” Opinion |
| Principis Capital, LLC v. I Do, Inc. 201 A.D.3d 752; 160 N.Y.S.3d 325; 2022 NY Slip Op 00203 | N.Y. Supreme Court, Appellate Division, Second Department | 2022 | Appeal from denial of funder's summary judgment motion | True sale, not a loan | “Here, the plaintiff established that the transaction set forth in the agreement was not a loan.” Opinion |
| OriginClear Inc. v. GTR Source, LLC No. 20-CV-7026-FPG, ECF 26 (W.D.N.Y.); cited by later courts as 2021 WL 5907878 | U.S. District Court, Western District of New York | 2021 | Motion to dismiss usury (GOL 5-511/5-513) claims | True sale, not a loan | “Even viewing the facts in the light most favorable to Plaintiffs, the factors which indicate the agreements constitute loans are not present here.” Opinion |
| Strategic Funding Source, Inc. v. Steenbok, Inc. 2021 NY Slip Op 04002 | N.Y. Supreme Court, Appellate Division, First Department | 2021 | Appeal from denial of merchant's summary judgment motion | True sale, not a loan | “Accordingly, the cash advance was not a loan and is thus not a usurious transaction” Opinion |
| Davis v. Richmond Capital Group, LLC 194 A.D.3d 516; 2021 NY Slip Op 03111 | N.Y. Supreme Court, Appellate Division, First Department | 2021 | Appeal from denial of funders' motions to dismiss merchants' complaint (usury, RICO) | Loan, or loan claim survives | “Plaintiffs also allege sufficiently that the subject agreements were loans subject to usury laws, to wit, the discretionary nature of the reconciliation provisions, the allegations that defendants refused to permit reconciliation” Opinion |
| Paycation Travel, Inc. v. Global Merchant Cash, Inc. 2021 NY Slip Op 01782 | N.Y. Supreme Court, Appellate Division, Second Department | 2021 | Appeal from denial of funder's summary judgment motion in merchant's action to vacate a confessed judgment | Decided on other grounds | “General Obligations Law § 5-521 bars a corporation such as the plaintiff from asserting usury in any action, except in the case of criminal usury as defined in Penal Law § 190.40, and then only as a defense” Opinion |
| CapCall, LLC v. Foster (In re Shoot the Moon, LLC) Bankr. No. 2:15-bk-60979-WLH; Adv. No. 2:17-ap-00028-WLH, Doc. 189 (Bankr. D. Mont.) (not for publication) | U.S. Bankruptcy Court, District of Montana | 2020 | Bankruptcy adversary proceeding | Fact question for trial | “Put differently, viewed in the light most favorable to CapCall, there are genuine issues of material fact regarding whether the inclusion of reconciliation provisions and absence of fixed terms are sufficiently indicative of sale transactio…” Opinion |
| LG Funding, LLC v. United Senior Properties of Olathe, LLC 181 A.D.3d 664; 122 N.Y.S.3d 309; 2020 NY Slip Op 01607 | N.Y. Supreme Court, Appellate Division, Second Department | 2020 | Appeal from denial of funder's motion to dismiss merchant's criminal-usury defenses and counterclaim and for s | Loan, or loan claim survives | “These provisions suggest that the plaintiff did not assume the risk that United would have less-than-expected or no revenues.” Opinion |
| Fleetwood Services, LLC v. Complete Business Solutions Group, Inc. (d/b/a Par Funding) 374 F. Supp. 3d 361 (E.D. Pa. 2019) | U.S. District Court, Eastern District of Pennsylvania | 2019 | Motions to dismiss RICO and usury-based claims (case transferred from N.D. Tex.) | Loan, or loan claim survives | “the Court assumes-without deciding and only for purposes of the instant motions to dismiss-the Factoring Agreement was a loan.” Opinion |
| Official Committee of Unsecured Creditors v. LG Funding, LLC (In re Cornerstone Tower Services, Inc.) Bankr. No. BK16-40787; Adv. No. A17-4051, Doc. 23 (Bankr. D. Neb.); cited by later courts as 2018 WL 6199131 | U.S. Bankruptcy Court, District of Nebraska | 2018 | Bankruptcy adversary proceeding (preference) | True sale, not a loan | “Therefore, the court finds that the agreement in this case is properly classified as a sale rather than a loan.” Opinion |
| Gecker v. LG Funding, LLC (In re Hill) 589 B.R. 614 (Bankr. N.D. Ill. 2018) | U.S. Bankruptcy Court, Northern District of Illinois | 2018 | Bankruptcy adversary proceeding | True sale, not a loan | “Since these transactions are not considered loans under New York law, they cannot be criminally usurious.” Opinion |
| Champion Auto Sales, LLC v. Pearl Beta Funding, LLC 159 A.D.3d 507; 2018 NY Slip Op 01645 | N.Y. Supreme Court, Appellate Division, First Department | 2018 | Appeal from order granting funder's motion to dismiss complaint seeking to vacate a judgment by confession | True sale, not a loan | “The evidence demonstrates that the underlying agreement leading to the judgment by confession was not a usurious transaction” Opinion |
| Colonial Funding Network, Inc. v. Epazz, Inc. 252 F. Supp. 3d 274 (S.D.N.Y. 2017) | U.S. District Court, Southern District of New York | 2017 | Funder's motions to dismiss merchant's usury counterclaims and strike usury affirmative defense | True sale, not a loan | “TVT’s right to collect the receipts purchased amounts from Epazz is in fact contingent on Epazz’s continued collection of receipts.” Opinion |
How often courts see merchant cash advance cases
Court opinions mentioning merchant cash advances, by year
Opinions in CourtListener's database containing the phrase "merchant cash advance". 2026 is a partial year.
What this means for a business that owes $500,000 or more
A credible argument that an advance is really a loan changes the funder's risk in court, and that changes what it will accept in a negotiation. But the argument depends on the exact contract, the state whose law governs it and the court that hears it, and many decisions in our sample went the funder's way. This is work for your own attorney. Our guide to MCA debt over $500,000 explains where it fits among the options.
Method and limits
- Decisions were found through CourtListener's opinion search and through reporting on notable cases. Every outcome was classified from the opinion's own text, and each row quotes it.
- Many decisions are rulings on early motions; a usury claim surviving a motion to dismiss is not a final judgment that the advance was a loan.
- The sample is not every MCA case. Unpublished trial-court rulings, which are most of them, are not all searchable.
- Nothing here is legal advice.
Questions and answers
Is a merchant cash advance a loan?
It depends on the contract and the court. In our review of 59 decisions, 27 held an advance was a loan or let a usury claim proceed and 22 held it was a true sale. Courts mostly look at the reconciliation right, whether there is a fixed term, and whether the funder can collect even if the business fails.
Can I sue a merchant cash advance company for usury?
Some owners have, and some courts have let those claims go forward, but the outcome depends on the specific agreement and the governing state's law. Talk to your own attorney before relying on it.
What is a reconciliation provision?
A clause that lets the business ask the funder to adjust its payments to match actual receipts. Courts treat a real, mandatory reconciliation right as a sign the deal is a sale; one that is missing or left to the funder's discretion points toward a loan.
Sources
- Apollo Funding Co. v. Dave Reilly Construction, LLC, 241 A.D.3d 1508; 2025 NY Slip Op 05055. courtlistener.com/opinion/10677061/apollo-funding-co-v-dave-reilly-con
- Black Pearl Vision, LLC v. G and G Funding Group, LLC, Bankr. No. 24-30948; Adv. Proc. No. 25-03143, Doc. 15 (Bankr. W.D.N.C.). courtlistener.com/opinion/10880639/in-re-black-pearl-vision-llc-v-g-an
- Black Pearl Vision, LLC v. Pearl Delta Funding, LLC, Bankr. No. 24-30928; AP No. 25-03111, Doc. 18 (Bankr. W.D.N.C.). courtlistener.com/opinion/10767772/in-re-black-pearl-vision-llc-v-pear
- Blade Funding, LLC v. Build Retail, Inc., 2026 NY Slip Op 05268. courtlistener.com/opinion/10975407/blade-funding-llc-v-build-retail-in
- Bridge Funding Cap LLC v. SimonExpress Pizza, LLC, 2025 NY Slip Op 04306; cited by later courts as 240 A.D.3d 1186. storage.courtlistener.com/html/2025/07/25/bridge_funding_cap_llc_v._si
- Butler Trucking LLC v. CashFloit, LLC, Bankr. No. 24-32443; Adv. Pro. No. 25-03004, Doc. 14 (Bankr. N.D. Ohio). courtlistener.com/opinion/10632802/butler-trucking-llc-v-cashfloit-llc
- CapCall, LLC v. Foster (In re Shoot the Moon, LLC), Bankr. No. 2:15-bk-60979-WLH; Adv. No. 2:17-ap-00028-WLH, Doc. 189 (Bankr. D. Mont.) (not for publication). courtlistener.com/opinion/9992496/cap-call-llc-v-foster/
- Champion Auto Sales, LLC v. Pearl Beta Funding, LLC, 159 A.D.3d 507; 2018 NY Slip Op 01645. nycourts.gov/reporter/3dseries/2018/2018_01645.htm
- Colonial Funding Network, Inc. v. Epazz, Inc., 252 F. Supp. 3d 274 (S.D.N.Y. 2017). static.case.law/f-supp-3d/252/cases/0274-01.json
- Crosby Tugs, L.L.C. v. Meged Funding Group (Aqua MCA Agreement) (In re Crosby Marine Transportation, LLC), Bankr. No. 26-10678; Adv. Case 26-01018, Doc. 324 (Bankr. E.D. La.). courtlistener.com/opinion/10876706/crosby-tugs-llc-crosby-dredging-llc
- Crosby Tugs, L.L.C. v. Meged Funding Group (Reliance MCA Agreement) (In re Crosby Marine Transportation, LLC), Bankr. No. 26-10678; Adv. Case 26-01018, Doc. 323 (Bankr. E.D. La.). courtlistener.com/opinion/10876701/crosby-tugs-llc-crosby-dredging-llc
- Crystal Springs Capital, Inc. v. Big Thicket Coin, LLC, 220 A.D.3d 745; 2023 NY Slip Op 05121. courtlistener.com/opinion/9432148/crystal-springs-capital-inc-v-big-th
- Culp v. Silverline Services, Inc., 2026 NY Slip Op 05077. courtlistener.com/opinion/10958818/culp-v-silverline-servs-inc/
- Davis v. Richmond Capital Group, LLC, 194 A.D.3d 516; 2021 NY Slip Op 03111. courtlistener.com/opinion/4884094/davis-v-richmond-capital-group-llc/
- Diesel Funding, LLC v. Build Retail, Inc., 2026 NY Slip Op 02629. courtlistener.com/opinion/10867093/diesel-funding-llc-v-build-retail-i
- Division 5, LLC v. Fora Financial Advance, LLC, No. 24-CV-6870 (JPO), ECF 31 (S.D.N.Y.). courtlistener.com/opinion/11019373/division-5-llc-v-fora-financial-adv
- EBF Holdings, LLC v. Defiant Arms, L.L.C., 251 A.D.3d 1448; 2026 NY Slip Op 04563. storage.courtlistener.com/html/2026/07/24/ebf_holdings_llc_v._defiant_
- Fleetwood Services, LLC v. Complete Business Solutions Group, Inc. (d/b/a Par Funding), 374 F. Supp. 3d 361 (E.D. Pa. 2019). static.case.law/f-supp-3d/374/cases/0361-01.json
- Fleetwood Services, LLC v. Ram Capital Funding, LLC, No. 20-cv-5120 (LJL), Dkt. 87 (S.D.N.Y.); cited by later courts as 2022 WL 1997207. courtlistener.com/opinion/11017289/fleetwood-services-llc-v-ram-capita
- Gecker v. LG Funding, LLC (In re Hill), 589 B.R. 614 (Bankr. N.D. Ill. 2018). static.case.law/br/589/cases/0614-01.json
- Greenwich Retail Group LLC v. Moby Capital, LLC (In re Greenwich Retail Group LLC), Adv. Proc. No. 25-01106 (MEW), Doc. 50 (Bankr. S.D.N.Y.) (for publication; cited by later courts as 677 B.R.). courtlistener.com/opinion/10797090/in-re-greenwich-retail-group-llc-v-
- Guttman v. EBF Holdings, LLC (In re Global Energy Services, LLC), Bankr. No. 21-17305-NVA; Adv. No. 23-00188, Doc. 42 (Bankr. D. Md.); cited by later courts as 2025 WL 1012721. courtlistener.com/opinion/10369271/guttman-v-ebf-holdings-llc/
- Haymount Urgent Care PC v. GoFund Advance, LLC, 609 F. Supp. 3d 237 (S.D.N.Y. 2022) (No. 1:22-cv-01245-JSR, ECF 86). courtlistener.com/opinion/9875595/haymount-urgent-care-pc-v-gofund-adv
- Heritage Collegiate Apparel, Inc. v. Elemental Capital, Inc., Bankr. No. 24-47922; Adv. No. 25-4146, Doc. 50 (Bankr. E.D. Mich.). courtlistener.com/opinion/10777061/heritage-collegiate-apparel-inc-v-e
- JLK Construction, LLC v. Alva Advance, LLC, Bankr. No. 23-50034; Adv. No. 23-4030, Doc. 93 (Bankr. W.D. Mo.). courtlistener.com/opinion/10761245/jlk-construction-llc-v-alva-advance
- Kapitus Servicing, Inc. v. Point Blank Construction, Inc., 221 A.D.3d 532; 2023 NY Slip Op 06087. courtlistener.com/opinion/9447246/kapitus-servicing-inc-v-point-blank-
- Kapitus Servicing, Inc. v. Ragtime Gourmet Corp., 242 A.D.3d 638; 2025 NY Slip Op 05921. courtlistener.com/opinion/10712706/kapitus-servicing-inc-v-ragtime-gou
- Kapitus Servicing, Inc. v. Southern Source, Inc., 2026 NY Slip Op 05855. courtlistener.com/opinion/11017540/kapitus-servicing-inc-v-southern-so
- Kapitus Servicing, Inc. v. Suburban Waste Services, Inc., 246 A.D.3d 661; 2026 NY Slip Op 01127. storage.courtlistener.com/html/2026/02/26/kapitus_servicing_inc._v._su
- Kurtz v. BMT Capital Group, Inc., Adv. No. 25-06035-NGH, Doc. 31 (Bankr. D. Idaho). courtlistener.com/opinion/10841210/timothy-r-kurtz-v-bmt-capital-group
- Kurtz v. Kalamata Capital Group, LLC, Adv. No. 25-06027-NGH, Doc. 28 (Bankr. D. Idaho). courtlistener.com/opinion/10777700/timothy-r-kurtz-v-kalamata-capital-
- LG Funding, LLC v. United Senior Properties of Olathe, LLC, 181 A.D.3d 664; 122 N.Y.S.3d 309; 2020 NY Slip Op 01607. courtlistener.com/opinion/4734849/lg-funding-llc-v-united-senior-props
- Lateral Recovery LLC v. Funderz.net, LLC, No. 1:22-cv-02170 (JLR), ECF 140 (S.D.N.Y.). courtlistener.com/opinion/9890854/lateral-recovery-llc-v-bmf-advance-l
- Lateral Recovery LLC v. Funderz.net, LLC, No. 22-cv-2170 (LJL), Dkt. 169 (S.D.N.Y.). courtlistener.com/opinion/11019214/lateral-recovery-llc-benchmark-buil
- Lateral Recovery, LLC v. Capital Merchant Services, LLC, 632 F. Supp. 3d 402 (S.D.N.Y. 2022) (No. 21-cv-9336 (LJL), Dkt. 49). courtlistener.com/opinion/11017573/lateral-recovery-llc-et-al-v-capita
- Lateral Recovery, LLC v. Queen Funding, LLC, No. 1:21-cv-09607-LGS, ECF 36 (S.D.N.Y.). courtlistener.com/opinion/9876185/lateral-recovery-llc-v-queen-funding
- Mazzoni Center v. LCF Group, Inc., No. 2:24-cv-05921-KSM, Doc. 20 (E.D. Pa.). courtlistener.com/opinion/10276970/mazzoni-center-v-lcf-group-inc/
- Merchant Advance, LLC v. Conceptos Cuisine, LLC, 2026 TSPR 15; 217 DPR ___ (No. CC-2025-0109). courtlistener.com/opinion/10793909/merchant-advance-llc-v-conceptos-cu
- O'Toole v. Radium2 Capital, LLC (In re J.P.R. Mechanical Inc.), Bankr. No. 19-23480 (DSJ); Adv. Pro. Nos. 21-07079 and 21-07082 (DSJ), Doc. 46 (Bankr. S.D.N.Y.) (not for publication). courtlistener.com/opinion/10595832/otoole-solely-in-her-capacity-chapt
- Oakshire Properties, LLC v. Argus Capital Funding, LLC, 229 A.D.3d 1199; 2024 NY Slip Op 03943. courtlistener.com/opinion/10015571/oakshire-props-llc-v-argus-capital-
- Official Committee of Unsecured Creditors v. LG Funding, LLC (In re Cornerstone Tower Services, Inc.), Bankr. No. BK16-40787; Adv. No. A17-4051, Doc. 23 (Bankr. D. Neb.); cited by later courts as 2018 WL 6199131. courtlistener.com/opinion/9992801/official-committee-of-unsecured-cred
- OriginClear Inc. v. GTR Source, LLC, No. 20-CV-7026-FPG, ECF 26 (W.D.N.Y.); cited by later courts as 2021 WL 5907878. courtlistener.com/opinion/9897855/originclear-inc-v-gtr-source-llc/
- Paycation Travel, Inc. v. Global Merchant Cash, Inc., 2021 NY Slip Op 01782. courtlistener.com/opinion/4867282/paycation-travel-inc-v-global-mercha
- People v. Richmond Capital Group LLC, 2023 NY Slip Op 50975(U). courtlistener.com/opinion/9426876/people-v-richmond-capital-group-llc/
- People v. Richmond Capital Group LLC, 2026 NY Slip Op 00990. courtlistener.com/opinion/10796696/people-v-richmond-capital-group-llc
- People v. Yellowstone Capital LLC, 2026 NY Slip Op 30767(U). courtlistener.com/opinion/10812597/people-v-yellowstone-capital-llc/
- Principis Capital, LLC v. I Do, Inc., 201 A.D.3d 752; 160 N.Y.S.3d 325; 2022 NY Slip Op 00203. nycourts.gov/reporter/3dseries/2022/2022_00203.htm
- Samson MCA LLC v. Across the Street Holdings, Inc., No. 6:24-CV-06601 EAW, Dkt. 32 (W.D.N.Y.). courtlistener.com/opinion/10978770/samson-mca-llc-v-across-the-street-
- Samson MCA LLC v. Joseph A. Russo M.D. P.C./IV Therapeutics PLLC (appeal No. 2), 219 A.D.3d 1126; 2023 NY Slip Op 04271. storage.courtlistener.com/html/2023/08/11/samson_mca_llc_v._joseph_a._
- Slate Advance v. Saygan Global Steel, Ltd., 206 A.D.3d 782; 2022 NY Slip Op 03761. courtlistener.com/opinion/6475922/slate-advance-v-saygan-global-steel-
- Sommers v. Global Merchant Cash, Inc. (In re Anadrill Directional Services Inc.), Bankr. No. 23-31199; Adv. No. 25-3039, Doc. 27 (Bankr. S.D. Tex.). courtlistener.com/opinion/10780987/in-re-anadrill-directional-services
- Spin Capital, LLC v. Bridgelink Engineering, LLC, 2026 NY Slip Op 02296. courtlistener.com/opinion/10849417/spin-capital-llc-v-bridgelink-engg-
- Strategic Funding Source, Inc. v. Steenbok, Inc., 2021 NY Slip Op 04002. courtlistener.com/opinion/4893742/strategic-funding-source-inc-v-steen
- The New Y-Capp, Inc. v. Arch Capital Funding, LLC, No. 18-cv-3223 (ALC), ECF 208 (S.D.N.Y.); cited by later courts as 2022 WL 4813962. courtlistener.com/opinion/9878389/the-new-y-capp-inc-v-arch-capital-fu
- Togut v. eProdigy Financial, LLC (In re Kossoff PLLC), Bankr. No. 21-10699 (DSJ); Adv. Pro. No. 23-01109 (DSJ), Doc. 103 (Bankr. S.D.N.Y.); cited by later courts as 2026 WL 2168916. courtlistener.com/opinion/10942296/in-re-kossoff-pllc-v-eprodigy-finan
- True Business Funding, LLC v. Guerrero A Construction Corp., 239 A.D.3d 787; 2025 NY Slip Op 03598. courtlistener.com/opinion/10624889/true-bus-funding-llc-v-guerrero-a-c
- US Information Group LLC v. EBF Holdings, LLC, No. 1:22-cv-06661-PKC, ECF 76 (S.D.N.Y.); cited by later courts as 2023 WL 6198803. courtlistener.com/opinion/9887931/us-information-group-llc-v-ebf-holdi
- Weigle v. CFG Merchant Solutions, LLC (In re Squared Up Hospitality, Inc.), Bankr. No. 4:23-bk-03540-BMW; Adv. No. 4:24-ap-00208-BMW, Doc. 139 (Bankr. D. Ariz.). courtlistener.com/opinion/11008859/in-re-squared-up-hospitality-inc-v-
- Williams Land Clearing, Grading, and Timber Logger, LLC v. Apex Funding Source LLC, Bankr. No. 22-02094-5-PWM; Adv. No. 23-00024-5-PWM, Doc. 119 (Bankr. E.D.N.C.). courtlistener.com/opinion/10585912/williams-land-clearing-grading-and-
- CourtListener, Free Law Project (search API). courtlistener.com
About this study
Decisions were found through CourtListener's opinion search and through reporting on notable cases, and every outcome was classified from the opinion's own text. The dataset is a reviewed sample, not every MCA case ever decided: many trial-court rulings are never published.
How to cite: Hamilton & Merchant Research, “How Courts Decide Whether a Merchant Cash Advance Is a Loan,” October 9, 2026, https://hamiltonmerchant.com/research/mca-court-decisions/
Download the data (CSV) · Free to reuse with attribution under CC BY 4.0. Found an error? Email [email protected] and we will correct it and date the change.