California Department of Business Oversight issues advisory to small businesses with merchant cash advance contracts

State Issues CDBO California Small Business Lending Merchant Cash Advance Covid-19

On April 6, the California Department of Business Oversight (DBO) issued an advisory to small businesses with merchant cash advance contracts. Small businesses are encouraged to review the terms of their existing financing products to determine whether they may be entitled to relief and report finance companies that fail to honor contractual terms that provide relief. The DBO notes that payments under certain financing arrangements are typically adjustable and may be lowered if the small business is closed as a result of government orders.