MCA Agreement Template

MCA AGREEMENT

This Merchant Cash Advance Agreement ("Agreement") is made and entered into as of Date: by and between Purchaser Name: (the "Purchaser"), with principal place of business at , and Merchant Name: (the "Merchant"), with principal place of business at .

RECITALS

WHEREAS, Merchant operates a business under the name DBA: , and desires immediate working capital in exchange for a contractual purchase of a portion of future receivables;

WHEREAS, Purchaser is willing to provide funds to Merchant in the amount of Advance Amount: $ subject to the terms set forth herein;

WHEREAS, Merchant agrees to sell and deliver to Purchaser, and Purchaser agrees to purchase from Merchant, a portion of Merchant's future credit card receivables and other qualifying receivables in accordance with the purchase terms below.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms have the following meanings:

"Advance" means the funds delivered by Purchaser to Merchant in the amount set forth above. "Purchase Amount" means the aggregate dollar amount of receivables purchased by Purchaser as specified in Section 2. "Factor Rate" means the multiplier applied to the Advance to determine the Purchase Price: . "Holdback" means the portion or method by which Purchaser collects remittances from Merchant's receivables as described in Section 4.

2. PURCHASE AND SALE

Subject to the terms and conditions of this Agreement, Merchant hereby irrevocably sells, assigns, transfers and conveys to Purchaser a fixed, non-recourse purchase of Merchant's future receivables in an amount equal to the Purchase Price. The Purchase Price equals the Advance multiplied by the Factor Rate. The Purchase Price is: $ .

Merchant acknowledges and agrees that the transaction contemplated herein is a sale of a contractual right to receive a portion of Merchant's future receivables and not a loan; Merchant's obligations hereunder are payable from the specified receivables only as provided in this Agreement.

3. FUNDING

Purchaser shall fund the Advance to Merchant by wired transfer or other agreed method to Merchant's designated account on Funding Date: , subject to satisfaction of the conditions precedent set forth herein.

4. COLLECTION, HOLDBACK AND REMITTANCE

Merchant authorizes Purchaser (or Purchaser's designee) to collect funds due to Merchant from Merchant's credit card processor, acquirer or other payment processor by debit, ACH, lockbox, or other remittance mechanism. Merchant agrees that Purchaser will take a holdback equal to: of gross card receipts or a fixed percentage per transaction as set forth in the remittance schedule. Merchant shall not delay, divert, or otherwise alter remittances applicable to Purchaser's purchased receivables.

If remittances are insufficient to satisfy Purchaser's collection of the Purchase Price in accordance with this Agreement, Merchant shall promptly remit additional funds upon demand to cover any shortfall.

5. REPRESENTATIONS AND WARRANTIES

Merchant represents and warrants to Purchaser that: (a) Merchant is duly organized and validly existing under the laws of the jurisdiction shown in its organizational documents; (b) Merchant has full power and authority to execute and perform this Agreement and to sell the receivables described herein; (c) Merchant's execution, delivery and performance of this Agreement will not violate any agreement or law binding on Merchant; (d) all receivables sold to Purchaser are bona fide and arise from the ordinary course of Merchant's business; and (e) no financing statement, lien, or security interest has been filed against the receivables sold to Purchaser except as disclosed in writing to Purchaser.

Purchaser represents and warrants that it has full power and authority to enter into and perform its obligations under this Agreement and that the funds used to make the Advance are not derived from illegal activity.

6. COVENANTS

Merchant covenants that, during the term of this Agreement, Merchant shall (a) operate its business in the ordinary course and in compliance with applicable law; (b) maintain Merchant's processing accounts and not allow any change that would adversely affect Purchaser's ability to collect receivables; (c) promptly notify Purchaser of any dispute, anticipated insolvency, bankruptcy filing, or change in ownership or control; and (d) provide access to books and records relating to receivables upon Purchaser's reasonable request.

7. FEES AND CHARGES

In addition to the Purchase Price, Merchant shall pay (if applicable) non-refundable fees as follows: Origination Fee $ ; Processing Fee $ . Any returned payment or reversal shall be subject to a returned item fee of $ .

All fees and amounts payable to Purchaser under this Agreement are non-refundable and shall be due on demand or set off against remittances permitted under this Agreement.

8. SECURITY INTEREST AND FURTHER ASSURANCES

To secure Merchant's obligations and to effect the sale of receivables, Merchant grants Purchaser a security interest in Merchant's accounts, receivables, proceeds, and all related rights. Merchant authorizes Purchaser to file financing statements, control agreements or other instruments necessary to perfect and maintain Purchaser's interest. Merchant agrees to cooperate and execute such further documents as Purchaser may reasonably request.

9. EVENT OF DEFAULT; REMEDIES

Events of default include, without limitation: Merchant's breach of any representation, warranty or covenant; insolvency, appointment of a receiver, or commencement of any bankruptcy proceeding by or against Merchant; failure to remit funds as required herein; or any act that materially impairs Purchaser's rights. Upon an event of default, Purchaser may exercise all remedies available at law or equity, including immediate setoff, collection directly from Merchant's processors, enforcement of security interests, and seeking injunctive relief. Purchaser's remedies are cumulative.

10. TAXES AND REPORTING

Merchant shall be solely responsible for any taxes, assessments, fees or other governmental charges imposed on Merchant in connection with its business or the receivables. Purchaser shall not be responsible for withholding or paying any employment-related taxes on behalf of Merchant.

11. NOTICES

All notices, requests, consents and other communications required or permitted hereunder shall be in writing and delivered to the parties at the addresses set forth below or to such other address as either party designates in writing.

12. ASSIGNMENT

Purchaser may assign or transfer any of its rights or obligations under this Agreement without Merchant's consent. Merchant shall not assign its rights or delegate its obligations without Purchaser's prior written consent, which consent shall not be unreasonably withheld.

13. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflicts of law principles.

14. ENTIRE AGREEMENT; SEVERABILITY; AMENDMENT; WAIVER; COUNTERPARTS

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings. If any provision of this Agreement is held invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions, which shall remain in full force and effect. This Agreement may be amended only by a written instrument signed by both parties. No waiver shall be effective unless in writing and signed by the party granting the waiver. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

15. MISCELLANEOUS

Merchant authorizes Purchaser to verify Merchant's credit history and to obtain such information as Purchaser deems necessary to administer and enforce this Agreement. Merchant consents to electronic delivery of notices and agreements unless prohibited by law.

ADDITIONAL DETAILS

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