FACTORING

Overview

Barakat + Bossa is one of the few firms with a dedicated practice focused exclusively on the complex and evolving legal landscape of factoring, including merchant cash advance (MCA) agreements, accounts receivable financing, and structured receivables arrangements. Recognized for our sophisticated counsel and litigation capabilities, we represent clients across a broad range of industries in both the prosecution and defense of high-stakes disputes arising from these financial instruments.

As MCA and factoring arrangements gain traction—especially among small and midsize businesses in search of flexible, non-traditional financing—they have simultaneously become a hotbed for aggressive collection tactics, predatory lending schemes, and fraudulent behavior. Our Factoring Practice draws on Barakat + Bossa’s extensive experience in commercial litigation and fraud investigations to help clients navigate these risks and enforce their rights with strategic precision.

Our attorneys routinely litigate cases involving the enforceability of factoring and MCA agreements, including challenges under state usury laws and claims that such arrangements constitute disguised loans. We handle matters involving breach of contract, fraudulent inducement, and requests for injunctive relief to stop unlawful collection activity. Our team is equally adept at pursuing or defending claims of tortious interference, civil RICO violations, and debtor-creditor disputes involving multi-jurisdictional or cross-border assets. We are also frequently called upon to defend businesses targeted by predatory lawsuits from factoring companies or their affiliates.

Barakat + Bossa’s deep understanding of structured finance allows us to advise commercial borrowers, entrepreneurs, and investors on the legal viability of these agreements, often identifying deceptive terms or hidden provisions that violate public policy or statutory lending laws. Our attorneys are regularly involved in precedent-setting cases at the forefront of factoring law, shaping how courts interpret these increasingly common but often misunderstood financial arrangements.

Key Contact

Jocelyne A. Macelloni

Factoring Practice Leader

Areas of Focus

Compliance and Regulatory Guidance

We provide focused regulatory guidance to businesses engaged in factoring and merchant cash advance (MCA) transactions. As scrutiny from state and federal authorities intensifies, clients rely on us to structure agreements that comply with usury laws, licensing requirements, and evolving disclosure obligations. Our team advises on minimizing enforcement risks by aligning practices with the latest legal standards and regulatory interpretations. With deep experience at the intersection of finance and litigation, we ensure operations remain both aggressive in the market and compliant under the law.

Dispute Resolution in Factoring Transactions

Complex disputes stemming from factoring and merchant cash advance (MCA) transactions often involve intricate claims such as breach of contract, fraud, usury, and unlawful collection practices. Representation spans plaintiffs and defendants alike in state and federal courts, as well as arbitration forums, frequently achieving injunctive relief and favorable resolutions in high-stakes cases. Expertise extends to tortious interference, RICO allegations, and cross-border enforcement of receivables. Employing a strategic, trial-ready approach, clients’ financial interests are vigorously protected while minimizing disruption to their ongoing business operations.

Due Diligence and Risk Assessment

Before entering or acquiring factoring and merchant cash advance (MCA) arrangements, clients rely on us to uncover legal, financial, and regulatory risks. Our team assesses the enforceability of agreements, potential exposure to usury laws, and the presence of deceptive or unfavorable terms. We guide lenders, investors, and business owners through tailored due diligence processes that prioritize compliance and strategic advantage. This risk-focused approach ensures sound decision-making and protects against costly disputes down the line.

Factoring Agreements and Documentation

We assist clients in drafting and negotiating factoring and merchant cash advance (MCA) agreements that are clear, enforceable, and tailored to their specific business needs. Our team ensures all documentation—including purchase agreements, security interests, and guaranties—complies with applicable laws and minimizes potential disputes. By carefully structuring terms and conditions, we help protect our clients’ rights while maintaining commercial flexibility.

Structuring and Negotiation of Factoring Transactions

Structuring and negotiating factoring transactions demands a nuanced understanding of both commercial goals and legal complexities. We collaborate closely with clients to design transaction frameworks that optimize regulatory compliance while maintaining operational flexibility. Our team carefully navigates key issues such as risk allocation, payment structures, and security interests, proactively addressing potential challenges. This strategic approach ensures factoring arrangements are resilient, transparent, and aligned with our clients’ broader business objectives.