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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 118322
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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Our company has a merchant cash advance with a PA company.

Customer Question

Customer: ***** *****. Our company has a merchant cash advance with a PA company. Two questions. What is the maximum interest rate they are allowed to charge on the merchant cash advance? Also, can they have a judgement placed on our account to freeze it when they are not in a first UCC position. For instance, we borrowed 150,000 to repay 217,500 in 7.5 months which equates to a 72% interest rate.
JA: Thanks. Can you give me any more details about your issue?
Customer: We were working with this lender to hold off on daily payments due to issues with our payer source and had to stop payments on their payments. Need to know if they can get a court order when they are not our senior lender to freeze our bank accounts and is 72% interest rate excessive in PA.
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Submitted: 1 year ago.
Category: Legal
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Commercial loans or cash advances are not governed under the state usury laws, they are based on a matter of contract between the parties. So if this is not a personal loan and it is a commercial one, I am afraid there is no maximum interest rates in PA law.
The lender can sue you for breach of contract and seek a judgment against you which they could try to enforce against your accounts or property, but they could not enforce those rights before any more senior lenders. However, if the senior lenders are not claiming default and are being paid, then this lender can seek to enforce the judgment against your property and accounts. This would mean that all of your senior lenders would have to seek to file suit against you and get judgments to exercise their priority lien rights.