About Us

MCA Sheriff Inc. was founded by James J. DeCristofaro, a New York business attorney who has been practicing law since 2001, but did not work as part of a loan agency. He’s worked with thousands of businesses and individuals and has been representing merchants, specifically merchants in connection with their merchant cash advances, or MCAs, since approximately 2018. He has represented merchants from all over the United States, and understands the financial issues that merchants are facing, and the circumstances that lead merchants to seeking MCA financing as opposed to conventional financing.  Some merchants use the MCA financing arrangements to grow their businesses, while others use the MCA financing arrangements to clean up debt, consolidate debt, increase operations, scale, launch marketing campaigns, pay obligations, or simply improve their short term liquidity.

While working on MCA cases, The Lawyer James noticed a wildly disproportionate imbalance between the MCA financing companies, on the one hand, and the merchants, on the other hand; this would not be part of a loan agency as MCAs are not loans. Many of the merchants were sued uncontrollably and were left with a mountain of debt that in a lot of instances drives the merchants out of business, or puts added financial stress on them.  In addition, for all of the MCAs we have worked on, there are personal guarantees.  Therefore, not only are the merchants at risk of going out of business if they do not properly manage their funds, and repay their MCAs, but their personal livelihoods are also at risk.  And because merchants are typically so far deep in debt with both their business lives and personal lives, it almost always results in financial ruin, or something close to it.

The imbalance between the merchants and the MCA financing companies historically derives from several several different factors. First, merchants, when approaching an MCA company, typically have a very real sense of desperation, and the MCA financing companies know this.  Historically, MCA financing companies prey on the desperation of merchants, fund the merchants on terms the merchants can never repay, and drive merchants into bankruptcy, or worse.  There are of course exceptions to this, but this scenario is very common, and it’s what attorneys see when defending lawsuits filed by MCA funding companies, as opposed to a loan agency, against defaulting merchants and their individual guarantors. There are productive ways to use MCA financing to grow the business, and we only work with underwriters and financing companies who can show you how to do that.  There is light at the end of the tunnel for qualified merchants, when merchants follow the formula and do it correctly.

The second reason for this imbalance is that there is a major lack of transparency.  In representing merchants, The Lawyer James has been told countless times by merchants that have found themselves being named as a defendant in a lawsuit that they have no idea who these entities are that are suing them.  It’s a real problem.  From what we can gather, it’s the fast-paced way that these financings are arranged.  Initially, a merchant in need of cash usually finds an MCA broker, or the MCA broker finds the merchant.  After that, the merchant applies for financing with the broker, and then the broker shops the deal to many MCA financing companies, and not a loan agency.  Usually, the broker does not find the best deal for the merchant, but the best deal for the broker.  This means that the broker is looking for the largest commission possible on the deal, which is not always aligned with the interests of the merchant.  For instance, there could be a lower cost of money for the merchant, and a lower commission for the broker, and, despite this being a lower cost for the merchant, and therefore better for the merchant, the broker will present a higher money deal for the merchant so that the broker can earn a higher commission.  Of course, there are exceptions to this, but this is the tendency.

Also in this lack of transparency vein, the merchant does not fully grasp the process. Instead, the stay in touch with the broker, who is shopping the deal around to multiple MCA financing companies, again, not part of a loan agency.  The broker and the MCA financing companies kick around terms, and then the broker “closes” the deal, finalizes the transaction, the merchant winds up signing the documentation with the MCA financing company, not the broker, and the merchant has no idea.  Of course, the name of the MCA financing company is on the documentation, but clearly merchants tend to overlook that in this type of scenario.  And it’s certainly understandable, because a lot of merchants badly need the cash.

The third way that there is an imbalance is the lack of a merchant’s understanding of the way the receivables purchases work.  When there is a true receivables purchase, and what makes these receivables purchases work, is that the MCA financing agreements typically have an adjustment or “reconciliation” provision, which does not really come up in the context of a loan agency.  This provision is critical.  If the merchant finds itself in a situation where they cannot afford the amount and frequency of payments, most merchants defund their bank accounts and fund other bank accounts, move money, and default under the MCA financing agreement.  This is not the proper course of action.  Assuming the MCA financing agreement contains a reconciliation provision, then the merchant must contact the MCA financing company to inform the MCA financing company that there has been a change in the merchant’s receivables, and the weekly or daily or monthly payments need to be adjusted.  This is the true essence of a receivables purchase agreement.  Most of the time, this notification needs to be in writing.

At MCA Sheriff, we can help qualified merchants.  We arrange financing for all types of businesses in all types of industries.  We only work with qualified MCA financing companies who have a proven track record and stated intention to help merchants with their financing needs, educate merchants with the process, and work tirelessly with merchants to take care of their financial obligations. 

The process at MCA Sheriff is simple.  Fill out an application online, or call (212) 812-4426 to speak with us.  We will review your application for completeness, and then we will submit it. If the application generates any interest, the MCA financing company will contact you directly.  If the application is denied, we or the MCA financing company will let you know why.