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"The FTC is very interested in MCA," Fisher said. "By and and commercial finance; funding and disclosures are un-
large, the industry has good, compliant practices. Stake- derwritten differently and based on different needs.
holders need to implement formal policies and procedures
to demonstrate what they are doing and how they comply "A consumer gets funding to fix a car or address an emer-
with the law." gency," Denis said. "A business owner gets funding to
make money. Even average business owners have pro-
Fisher, also a compliance attorney, advises funders to get duced cash flow, know what they're doing and frankly
involved in government affairs and lobbying efforts. She have better things to do than to read pages of disclosure."
believes that in five to 10 years, the industry will either
self-regulate or the FTC will take action to help merchants Implementing best practices
understand their finance options. State legislators are Darren Schulman, president at 6th Avenue Capital, said
considering MCA regulations, which may lead to broader proactivity is key to implementing best practices. "Don't
oversight. Self-regulating all types of brokers is critical; wait until something happens," he said. "Constantly up-
if one side is regulated and not another, it won't promote date business partners and clients and renegotiate if nec-
uniform best practices, she added. essary. … We advise every merchant of their rights, which
Self-policing are spelled out on the contract. An advance is not a loan
where there's a due date. If revenues are up or down, we
Murray said he's been hearing about self-regulation for adjust payments accordingly."
years but questions the motives. Do funders see competi-
tors touting transparency and don't want to be left out? Do Chad Otar, CEO at Funding Valley, said, "First, I explain if
they want to score points with the media? Improve their it's a loan or not a loan, then pricing and daily or weekly
bottom line? payback. I review fees line by line ‒ wire fee, origination
fee. Then I try to find the customer's comfort zone to create
"If you're a bad actor and the media crucifies you, you can an equitable repayment plan."
still say my bottom line is good," he said. "Ultimately, best
practices should mean more than having a competitive ad- Otar believes in keeping it simple. "If I go to buy a car and
vantage or garnering positive press." the salesperson tells me stuff I don't want to hear, I say, let
me take my time and do my evaluation," he said. "Meet me
Murray also warned against oversimplifying products. in the middle but know when to shut up. Overselling can
Stacking, the practice of layering multiple types of fund- deter me from doing business."
ing on a single merchant, has been a polarizing issue.
Some funders believe anyone who stacks is wrong. Mur- Dale S. Laszig, senior staff writer at The Green Sheet and managing
ray disagrees, saying there are positive ways to stack.
director at DSL Direct LLC, is a payments industry journalist and con-
"Instead of layering three or four identical products, work tent development specialist. She can be reached at dale@dsldirectllc.
in a way that makes sense for the customer, like a five- com and on Twitter at @DSLdirect.
year line of credit, equipment
lease and MCA," Murray ad-
vised. "Lenders win because
customers with different
products are lower risk, and
the broker can still sell mul-
tiple products."
B2B versus B2C
"Simplicity draws SMBs to
SBFA members and their
products," Denis said. "Our
member companies show to-
tal payback and all the dis-
closure regulators like to see."
Denis said the SBFA educates
regulators in different states
about how products work,
spending significant time
on the differences between
consumer-designed products

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