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The Law Offices of Alan Abergel, P.C. (“LOAA”) represents commercial sales-based financing providers, merchant cash advance (MCA) companies, brokers, and financial services businesses in Texas. LOAA advises on licensing, regulatory compliance, transactional documentation, and administrative and civil defense matters related to sales-based financing transactions.
Texas House Bill 700 (HB 700) added a new chapter to the Texas Finance Code regulating commercial sales-based financing transactions, commonly known as merchant cash advances (MCAs).
In a sales-based financing transaction, repayment is made as a percentage of a business’s sales or revenue, and payment amounts fluctuate based on revenue performance.
HB 700 establishes a new regulatory framework administered by the Texas Office of Consumer Credit Commissioner (OCCC) for providers and brokers of commercial sales-based financing.
HB 700 requires non-exempt commercial sales-based financing providers and brokers to register with the OCCC. The OCCC is authorized to:
Set annual registration fees
Suspend or terminate registrations
Enforce compliance with statutory and regulatory requirements
The registration obligation applies broadly and is not limited to transactions under $1 million
For commercial sales-based financing transactions of less than $1 million, HB 700 requires providers to disclose:
Total amount of financing
Amount disbursed to the recipient
Finance charge
Total repayment amount
Payment amounts and estimated payment period
These disclosures are intended to increase transparency in commercial financing transactions and may be enforced by the OCCC.
HB 700 prohibits certain practices in commercial sales-based financing transactions, including:
Confessions of judgment and similar provisions (void and unenforceable)
Automatic debiting of a recipient’s deposit account unless the provider holds a perfected first-priority security interest
Unfair, misleading, or abusive practices as determined by Finance Commission rulemaking
The Finance Commission is authorized to adopt implementing rules but may not set a maximum APR, finance charge, or fee for commercial sales-based financing.
LOAA provides legal services to commercial sales-based financing providers and brokers only (not to consumers), including:
Representation in court litigation defense involving merchant cash advance transactions
Assistance with OCCC licensing and registration compliance
Drafting merchant cash advance agreements and disclosure documentation
Drafting broker agreements for MCA brokers
Regulatory compliance counseling under Texas and federal financial services laws
Representation in OCCC administrative investigations, hearings, and proceedings
Review of business models and legal opinions on HB 700 applicability and compliance requirements
LOAA does not represent consumers in disputes with merchant cash advance providers, brokers, or commercial lenders. The firm represents only providers, brokers, and commercial financing businesses in compliance, transactional, administrative, and civil matters.
“I engaged Alan to help me through the complexities of obtaining my Lenders License. He was very knowledgeable about the process and provided me with a high level of service. I worked quickly getting him all the information needed and he worked at my pace. He was responsive to e-mails and questions and followed up with the DFPI to make sure everything was filed correctly. I had read online that this process could take as long as 6 months however Alan completed the assignment in less than 3 I will be retaining his services in the future to ensure my company remains in compliance."
--Petroleum Realty Group Inc.
"I hired Alan to represent me as a mortgage broker before the California Department of Real Estate. I couldn't be more pleased with Alan's services from start to finish. Alan was clear and concise. Alan's communication throughout the process was professional. I received the results I hoped for. Thank you Alan. I'll definitely recommend you to ALL and use your services again in the future shall I need anything!"
-Anonymous
"Very helpful in assisting in obtaining an OCCC Texas Motor Vehicle Sales Finance License. Very knowledgeable in answering all questions the OCCC asked for on their questionnaire. Highly recommended and would re-hire for any future assistance regarding motor vehicle and finance business. God Bless!"
-Raul
