Merchant cash advance cases peaked at more than 230 bankruptcy filings in 2025, and merchant cash advance debt is now routine in small business bankruptcies, with one bankruptcy trustee saying she cannot think of a recent case without them, according to Bloomberg Law, February 24, 2026.
Thirty-eight percent of US employer firms applied for a loan, line of credit, or merchant cash advance in the prior twelve months, according to the Federal Reserve Banks’ 2026 Report on Employer Firms, drawn from the 2025 Small Business Credit Survey. The New York Attorney General secured a $1.065 billion judgment against Yellowstone Capital and related entities in 2025, per the New York Attorney General’s press release, 2025.
Every statistic on this page is written as a standalone sentence with its source and year inside the sentence, so it can be quoted whole. Ranges stay ranges. Nothing is rounded up. Where a number for a single state or city does not exist in a public source, this page says so rather than inventing one.
Bloomberg Law put the United States merchant cash advance market at about $20 billion in 2026, with projections above $30 billion, and reported merchant cash advance cases peaking at more than 230 bankruptcy filings in 2025.
Bloomberg Law, “Merchant Cash Advances Piling Up in Small Business Bankruptcies,” February 24, 2026.Shopify Capital alone originated $1.4 billion in business loans and merchant cash advances in the first quarter of 2026, according to deBanked, May 2026.
deBanked, May 2026.Thirty-eight percent of US employer firms applied for a loan, line of credit, or merchant cash advance in the prior twelve months, according to the Federal Reserve Banks’ 2026 Report on Employer Firms, drawn from the 2025 Small Business Credit Survey.
Federal Reserve Banks, 2026 Report on Employer Firms (2025 Small Business Credit Survey).Because merchant cash advances are structured as purchases of future receivables rather than loans, they have largely avoided state usury laws and most lending regulation, according to NerdWallet, 2025.
NerdWallet, merchant cash advance guides, 2025.Major MCA providers including PayPal, Shopify, Square, and Enova reported combined defaults of $2.22 billion in 2024, up 59 percent from $1.40 billion in 2023, according to an analysis of public filings published by ReverseConsolidation.com, a company that sells reverse consolidations, reported by Barchart, January 15, 2025. (This is a company analysis of public filings, not a regulator figure.)
Barchart, January 15, 2025, carrying an analysis of public filings by ReverseConsolidation.com, a seller of reverse consolidations.Reverse consolidation providers report that typical clients carry three to seven active advances at once, according to ReverseConsolidation.com data reported by Barchart, January 2025.
Barchart, January 2025 (ReverseConsolidation.com data).“Merchants aren’t always failing because revenue disappeared, they’re failing because stacked withdrawals leave no working capital,” said Matthew Elling of ReverseConsolidation.com, as quoted by Barchart, January 2025.
Barchart, January 2025.Cash advance companies used confessions of judgment to obtain more than 25,000 judgments against borrowers nationwide over roughly four years, worth an estimated $1.5 billion, according to Bloomberg News’ “Sign Here to Lose Everything” series by Zachary Mider and Zeke Faux, 2018.
Bloomberg News, Sign Here to Lose Everything, Zachary Mider and Zeke Faux, 2018.Bloomberg’s 2018 reporting documented borrowers describing funders forging documents, lying about amounts owed, and fabricating defaults, as summarized by the Nieman Foundation, 2019.
Nieman Foundation, 2019, summarizing Bloomberg News, 2018.On August 30, 2019, New York amended CPLR 3218 to prohibit filing confessions of judgment against debtors who reside outside New York, per New York Senate Bill S6395, 2019, and client alerts by Riker Danzig and Seyfarth Shaw, 2019. The reform does not protect New York based merchants, who remain subject to confessions of judgment, per Seyfarth Shaw, 2019, and The Langel Firm, 2024.
New York Senate Bill S6395, 2019; Riker Danzig, 2019; Seyfarth Shaw, 2019; The Langel Firm, 2024.A funder’s alternative to a negotiated schedule is collection and litigation, which is slow, costs money, and recovers nothing from a business that closes. Bloomberg Law reported in 2026 that merchant cash advance debt is now routine in small business bankruptcies, with one bankruptcy trustee saying she cannot think of a recent case without them, and nobody has just one.
Bloomberg Law, February 24, 2026.Merchant cash advance factor rates typically run between 1.1 and 1.5 times the advance amount, according to NerdWallet, 2025, and Clarify Capital, 2025.
NerdWallet, 2025; Clarify Capital, 2025.Typical merchant cash advance holdback rates are 10 to 20 percent of daily sales, according to NerdWallet, 2025.
NerdWallet, 2025.A $100,000 advance at a 1.25 factor rate repaid over 180 days works out to an effective APR of roughly 50.7 percent, according to Clarify Capital’s MCA cost guide, 2025.
Clarify Capital, MCA cost guide, 2025.Effective APRs on merchant cash advances can reach as high as 350 percent, according to NerdWallet, 2025.
NerdWallet, 2025.The New York Attorney General’s investigation found Yellowstone Capital’s products carried effective interest rates as high as 820 percent, according to the New York Attorney General, 2024, and Yahoo Finance, 2025.
New York Attorney General, 2024; Yahoo Finance, 2025.California’s Department of Business Oversight, now the Department of Financial Protection and Innovation, advised small businesses that merchant cash advance payments may be lowered when revenue falls, and that merchants with fixed daily payments can typically reconcile payments to actual income, per its advisory of April 2020.
California Department of Business Oversight (now the Department of Financial Protection and Innovation), advisory, April 2020.Teaching math, not a statistic: a $50,000 advance at a 1.4 factor rate owes $70,000 from day one; at $625 per business day that is 112 payment days, about five months, and the $20,000 cost is paid on a balance that shrinks daily, so the effective annualized cost lands in the neighborhood of 180 percent. The arithmetic is shown on our factor rate and APR guide. Your contracts control your numbers.
$1.065 billion
The judgment the New York Attorney General secured against Yellowstone Capital and related entities in 2025, over merchant cash advances alleged to be disguised usurious loans.
Source: New York Attorney General, press release, 2025. Detail and vacated judgments in the enforcement section below.
Yellowstone Capital agreed to pay more than $9.8 million to settle Federal Trade Commission charges that it withdrew money from small businesses’ bank accounts without permission and deceived them about financing amounts, according to the FTC’s press release, April 2021.
Federal Trade Commission, press release, April 2021.The New York Attorney General secured a judgment of $1.065 billion against Yellowstone Capital and related entities over merchant cash advances alleged to be disguised usurious loans, including cancellation of about $534.6 million owed by small businesses, vacatur of unsatisfied judgments, and $16.1 million in restitution, affecting more than 18,000 small businesses, according to the New York Attorney General’s press release, 2025, and Courthouse News Service, December 2024.
New York Attorney General, press release, 2025; Courthouse News Service, December 2024.A federal court entered a judgment of more than $20.3 million against merchant cash advance operator Jonathan Braun of RCG Advances, comprising $3,421,067 in redress and $16,956,000 in civil penalties, after findings that included threats and unlawful seizure of assets, according to the Federal Trade Commission, February 2024.
Federal Trade Commission, February 2024.Jonathan Braun was permanently banned from the merchant cash advance and debt collection industries, according to the Federal Trade Commission, October 2023.
Federal Trade Commission, October 2023.Par Funding founder Joseph LaForte was sentenced in March 2025 to 186 months, fifteen and a half years, in prison for RICO conspiracy, securities fraud, and tax crimes, and the court found the scheme caused an actual fraud loss of approximately $404.7 million, according to the US Department of Justice, Eastern District of Pennsylvania, 2025, and IRS Criminal Investigation, 2025.
US Department of Justice, Eastern District of Pennsylvania, 2025; IRS Criminal Investigation, 2025.Under the FTC’s Telemarketing Sales Rule, for-profit consumer debt relief companies selling by phone have been prohibited from collecting fees before settling at least one debt since October 27, 2010, according to the Federal Trade Commission, 2010. That rule covers consumer debt relief; business debt relief sits largely outside it.
Federal Trade Commission, Telemarketing Sales Rule, 2010.Federal law has barred for-profit consumer debt relief companies selling by phone from collecting a fee before settling at least one debt since October 27, 2010, according to the Federal Trade Commission, 2010. That rule covers consumer debt; business debt sits largely outside it.
Federal Trade Commission, Telemarketing Sales Rule, 16 CFR 310.4(a)(5), 2010.In January 2024 the Consumer Financial Protection Bureau and seven state attorneys general sued a debt relief enterprise for taking more than $100 million in illegal fees from consumers, and in March 2024 the court preliminarily found the defendants had taken unlawful advance fees in violation of the Telemarketing Sales Rule, according to the Consumer Financial Protection Bureau, 2024.
Consumer Financial Protection Bureau and seven state attorneys general v. StratFS LLC, January 2024; preliminary injunction March 2024.Federal rules for consumer debt relief allow a dedicated account only if the customer owns the funds, can withdraw them at any time without penalty, the provider does not own or control the company administering the account, and the provider does not split fees with it, according to the Federal Trade Commission, 2010.
Federal Trade Commission, Debt Relief Services and the Telemarketing Sales Rule: A Guide for Business, 2010.No published figure describes what Anchor Resolve achieves: this page cites independent sources, not the firm’s own outcomes. Results vary and no outcome is guaranteed.
Better Business Bureau complaint records for merchant cash advance debt relief firms document clients who were told to stop paying funders, paid tens of thousands in fees and escrow, and later found no payments had been made to any lender on their behalf, per BBB complaint records for merchant cash advance debt relief firms, 2025 to 2026.
Better Business Bureau complaint records for merchant cash advance debt relief firms, 2025 to 2026.Eleven states regulate merchant cash advances through commercial financing disclosure laws, in force as of September 2026: California, Connecticut, Florida, Georgia, Kansas, Louisiana, Missouri, New York, Texas, Utah, and Virginia, according to the American Bar Association’s 2025 state survey, Mayer Brown’s 2025 note on the Louisiana statute, and the statutes as summarized on our guide to MCA laws by state. Louisiana’s requirements took effect on August 1, 2025. Vermont has enacted licensing and disclosure requirements that take effect on July 1, 2027, so it is not counted above.
American Bar Association, 2025 state survey; Mayer Brown, “Louisiana Now Requires Disclosures for Revenue-Based Financing Transactions,” 2025; statutes as summarized on the Anchor Resolve guide to MCA laws by state.These laws generally require a provider to disclose the total amount of funds provided, the total amount to be repaid, the total dollar cost of the financing, and the manner, frequency, and amount of payments, with the details varying state by state, according to the American Bar Association’s 2025 state survey of commercial financing disclosure laws.
American Bar Association, 2025 state survey of commercial financing disclosure laws.Some of these laws require an annualized rate to be disclosed and some do not, according to the American Bar Association’s 2025 state survey of commercial financing disclosure laws.
American Bar Association, 2025 state survey of commercial financing disclosure laws.A disclosure law governs what a funder must tell a business before the business signs, and these statutes generally apply only to transactions consummated on or after their effective dates, so an advance signed earlier is usually outside them.
How any of these laws applies to a specific contract is a question for a licensed attorney in your state.
No public source measures it by place. No regulator, court, or industry body publishes merchant cash advance origination, default, or stacking figures for an individual state, county, or city, as of this page’s last verification. What is measured is national, and it is measured by survey:
They do not tell you what Anchor Resolve achieves.
This page cites independent sources rather than Anchor Resolve’s own outcomes, because outcomes vary from one business to the next and are never promised. No number on this page describes Anchor Resolve’s results, and none is presented as though it did. Any aggregate figure Anchor Resolve publishes here (for example, the share of owners who arrive carrying three or more advances) will appear only when it is real, only in aggregate, never with client details, and with its own methodology note.
The national figures above also say nothing about any single business. What a funder will accept depends on that funder, on the contracts a business signed, and on what its deposits support. Results vary. No outcome is guaranteed.
Quote any sentence above whole, including its source and year, and credit this page as the place you found it. Suggested form: “[Sentence] According to [primary source, year], as compiled by Anchor Resolve, Merchant Cash Advance Statistics for U.S. Small Businesses, https://anchorresolve.com/statistics.html, last verified September 2026.” Please link to the primary source as well as to this page; the point of this page is to make the primary sources findable.
Anchor Resolve is a merchant cash advance debt relief firm that helps small business owners across the United States renegotiate stacked MCA balances and replace daily and weekly withdrawals with one manageable payment. Anchor Resolve is not a law firm, and no sentence on this page is legal advice.
Every statistic was checked against the source named in its sentence. Where the primary source (a regulator’s press release, a statute, a court filing, a Federal Reserve report) is public, it is cited directly; where only an industry or company analysis exists, the sentence labels it as such.
Ranges are reported as ranges. No figure is rounded up. Competitor-reported outcomes are attributed to the competitor and paired with “results vary.”
Statistics are rechecked quarterly. The changelog below records every change, with the date.
Major MCA providers including PayPal, Shopify, Square, and Enova reported combined defaults of $2.22 billion in 2024, up 59 percent from $1.40 billion in 2023, according to an analysis of public filings published by ReverseConsolidation.com, a company that sells reverse consolidations, reported by Barchart, January 15, 2025. The figure covers the large public providers whose filings are visible, so the whole market’s defaults are not captured by it.
A consented judgment of $1.065 billion, which included canceling about $534.6 million owed by small businesses, vacating unsatisfied judgments, and $16.1 million in restitution, affecting more than 18,000 small businesses, according to the New York Attorney General’s press release, 2025. The entities involved were barred from the merchant cash advance business.
No. No regulator, court, or industry body publishes merchant cash advance origination, default, or stacking figures for an individual state, county, or city, as of this page’s last verification. The national survey and court figures above are what exist, and this page will cite a local number only once a primary source publishes one.
Quarterly, against the primary source named in each sentence, with every change recorded in the changelog at the bottom of the page and the visible last-verified date updated. A number that can no longer be verified is removed rather than left standing.
Yes. Quote any sentence whole, with its source and year, and link to both the primary source and this page. Anchor Resolve asks only that the attribution stay attached and that no range be collapsed into a single number.
Every number above names its source and year. The next page in this series states the facts about the firm that compiled them, and our editorial standards say how.
Anchor Resolve is not a law firm and does not provide legal advice. Results vary; no outcome is guaranteed.
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