Our prior article discussed the predictability of litigating usury disputes involving merchant cash advance (MCA) agreements with New York choice-of-law clauses in New York—although we posited things were going to get (a little) wilder. But New York is not the only forum in which MCA customers (referred to as “merchants”) assert usury claims.

Despite New York choice-of-law and venue provisions, MCA funders are often forced to defend the lawfulness of their New York MCA agreements when domesticating judgments or sued by merchants in sister states, or when making claims in bankruptcy courts where merchant debtors are located. Sometimes these proceedings do not go well for funders, but they provide teachable lessons for fixing MCA contracts.