Related Headlines
| 01/09/2026 | Factor writes on "killing MCAs" in Texas |
| 06/12/2025 | The battle against MCA in Texas |
| 05/27/2025 | Texas tries to ban MCA ACHs |
| 04/28/2023 | Texas Bankers sue CFPB over Sect 1071 |
| 03/02/2021 | Texas to open 100% |
Related Videos
Ep 38 - Mayor of Miami, Texas Unmasked, Square's a Bank |
Potential Match Found in deBanked UCC Filer list
| Company Name | Phone number | UCC Alias 1 | Alias 2 | Alias 3 | Alias 4 | Alias 5 |
| Merchant Cash Advance of Texas | 713-785-4646 |
Stories
Concerned About The MCA Automatic Debit Law in Texas? This ACH Company Says There’s a Way
March 25, 2026
There may be no need to overcomplicate Merchant Cash Advance compliance in Texas. A key phrase in the MCA prohibition law that went into effect last year specifies that it’s a prohibition on “establishing a mechanism for automatically debiting a recipient’s account” unless a lot of other requirements are met.
One company looked closely at that piece of the language and came up with a simple solution.
“…our approach is to request the payment at each time and capture the authorization at the time of the transaction,” said John Innes, President of the Texas-based and aptly-named ACH Processing Company. “So instead of capturing an authorization at the beginning and embedding that into the documents where you’re going to do a recurring debit transaction to the merchant’s account, you are sending a request saying, ‘Okay, please authorize this payment.’ And so each payment is individually authorized so you don’t need that security interest [component] anymore.”
No automatic recurring debits. Instead there’s a Request For Payment that requires merchants to manually authorize debits on a debit-by-debit basis whether that be daily, weekly, or monthly, depending on whatever the agreed frequency is.
“I think this was maybe the intent of the law,” Innes continued. “It gives the merchant kind of that control over that debit and it fosters communication between the two parties.”
Innes said there’s various ways that this interaction can be conducted to reduce the friction of this process.
Other options proposed across the industry have focused on another piece of the language, that the prohibition is specifically meant for “commercial sales-based financing providers” and the proposed cure for that is to offer a non-sales-based financing product in the state instead. ACH Processing Company’s solution, however, allows an MCA funder to keep its product suite as-is.
“…you don’t have to break all that,” said Innes. “Continue with the same business plan. ”
Since the Texas law went into effect seven months ago, Innes says that numerous funders have still been in a holding pattern trying to figure out how to approach it. It’s their belief that this solution is a simple way to now get Texas turned back on if they’re ready.
No, Texas Did Not Ban Merchant Cash Advances
January 28, 2026
When Texas passed HB 700 last June, deBanked was among the first to point out that its most notable component was a prohibition on automatic debits of a recipient’s deposit account by a commercial sales-based financing provider unless they had a perfected first position. Some observers were quick to tell us that we had it all wrong, that MCAs had effectively been “banned” entirely and that we should have reported it that way. This was premised on a belief that perfecting a true first position on a recipient’s deposit account was a near-insurmountable obstacle (for MCAs that rely on ACHs instead of credit card splits) and thus a nuanced discussion of how to comply with the new law a moot debate.
But if the state legislature had intended to ban sales-based financing outright, it simply could have done so. Instead, it codified a framework for how to legally provide sales-based financing. It provided guidance on registration, disclosure, and oversight. And it even went as far as to say that the Finance Commission of Texas cannot “adopt a maximum annual percentage rate, finance charge, or fee for commercial sales-based financing transactions.” This was an incredible signal: No cost cap on sales-based financing.
The Texas Office of Consumer Credit Commissioner (OCCC) even held an open forum this past November to hear from impacted parties on the best way to craft and enforce the rules going forward. And so while they’re now busy promulgating those precise rules, collective minds have returned back to the original language surrounding that “certain automatic debits” are “prohibited.”
CERTAIN AUTOMATIC DEBITS PROHIBITED.
A provider or commercial sales-based financing broker may not establish a mechanism for automatically debiting a recipient’s deposit account unless the provider or broker holds a validly perfected security interest in the recipient’s account under Chapter 9, Business & Commerce Code, with a first priority against the claims of all other persons.
This language does not say that merchants cannot pay sales-based financing providers entirely. Others agree. deBanked spoke with one company, MCA Pay, which analyzed what the law says and they created a tool for merchants to pay sales-based financing providers in an orderly easy manner so that funders do not in fact have to automatically debit a recipient’s deposit account at all. Though there are some layers to how it’s done, merchants are, on their own volition, setting up a system to initiate payments to whichever funder they choose. They’re in control.
Far from theoretical, this methodology is already being used by merchants in Texas to pay sales-based financing providers, according to MCA Pay.
“We’re comfortable from a regulatory perspective, but I encourage everybody who uses this platform to run this by their counsel,” a representative said. “We’re putting the control back into the merchant’s hands.”
The two main partners at MCA Pay, Gavriel Kalfa and Moshe Klar, do not hail from within the industry, but they worked with experienced operators in the industry while building out the system. MCA Pay is not the payments provider or a law firm, they’re just the platform that loops the pieces together.
“Hopefully we’ve made a product here that’s going to allow MCA to continue in Texas compliantly for everybody,” they said.
Factor Gives Update on “Killing MCAs” in Texas
January 9, 2026Cole Harmonson, CEO of Dare Capital and a board member for the American Factoring Association, posted an update last month on the recent Texas MCA legislation and campaign to “fight the MCA cronies.” It appeared on the Commercial Factor’s magazine website. You can read it here.
Harmonson shared his strategy on how to kill MCAs in Texas, which focuses mainly on the DACA component of securing a first position: “If you get the Springing DACA, then the bank will not give anyone else (i.e., an MCA) a DACA, and therefore no MCA can legally sweep your customer’s account, thereby killing the MCAs in Texas,” he wrote.
Harmonson had previously shared that the factoring industry had been responsible for the MCA legislation in Texas and that it served as a “blueprint,” suggesting that a similar legal framework could be attempted in other states.
The LCF Group Partners with Utah Business Loans to Empower Small Businesses — Launching in Texas!
September 5, 2025New Hyde Park, NY — September 5, 2025 — The LCF Group is thrilled to announce a dynamic new partnership with Utah Business Loans, bringing fast, flexible, and transparent small business loans to our customers — starting in Texas and expanding to other states soon!
This collaboration marks a major milestone in our mission to support small businesses with the financial tools they need to grow, adapt, and thrive. With Utah Business Loans’ proven lending model, merchants can now access capital with:
- ✅ Simple, transparent terms
- 📅 Fixed payment schedules
- 💸 Lowest-cost options for short-term funding
- 🔓 No prepayment penalties — pay off early and save all remaining interest!
“We’re excited to kick off this partnership in Texas, where small businesses are the heartbeat of local communities,” said a spokesperson from The LCF Group. “Utah Business Loans shares our commitment to empowering entrepreneurs with fair, fast, and flexible financing — and we can’t wait to bring this opportunity to more states in the near future.”
Whether you’re launching a new venture, expanding operations, or navigating seasonal shifts, this new offering is designed to make funding accessible, affordable, and stress-free.
Stay tuned — more states are coming online soon!
Funders Comply With New Texas MCA Law
September 2, 2025As Texas implements the prohibition on ACH debits made by sales-based financing providers, here’s a working list of how funders are acting to comply:
Bitty: offering fixed-term installment loan. (see announcement)
CFG Merchant Solutions: offering fixed-term installment loan. (see announcement)
Merit Business Funding: Exempt from the law due to being a subsidiary of Meridian Bank. (See announcement)
Spartan Capital: offering fixed-term installment loan. (See announcement)
LCF Group: offering small business loans. (See announcement)
Backd Business Funding: offering term loans through their partnership with FinWise Bank.
If you are a sales-based or revenue-based financing provider that is continuing to fund in Texas and would like to be added here, email sean@debanked.com
CFG Merchant Solutions is excited to announce the launch of a brand-new loan product offering for Texas, with plans to roll out to more states in the near future.
August 24, 2025NEW YORK, NY, 08/25/25 – CFG Merchant Solutions is excited to announce the launch of a brand-new loan product — a significant step in our ongoing mission to provide everyday working capital® for small businesses nationwide.
The rollout will begin in Texas on September 1st, with expansion to additional states planned in the near future.
This new offering will be structured as a fixed-term, installment-based loan. It will uphold the same customer-first approach and streamlined process that clients and partners have come to expect from CFG Merchant Solutions.
Additional product details and operational updates will be shared soon on our website and supporting social media channels.
This launch represents an exciting opportunity for CFG Merchant Solutions, our ISO partners, and the small business owners we serve.
For questions or clarification, please contact our team directly.
https://cfgmerchantsolutions.com/
PRESS CONTACT
Nick DeFeis
Head of Marketing
ndefeis@cfgms.com
Troutman Pepper Locke Podcast Talks Biz Financing and Impact of Legislative Changes in Texas and Louisiana
July 10, 2025Troutman Pepper Locke attorneys Carlin McCrory, Jason Cover, and Caleb Rosenberg talked small business financing, the recent changes in Texas and Louisiana, and what is likely to come next. The discussion took place prior to the Texas bill being signed by the governor there but provides insights on it that still apply.
You can listen to it here:
Idea Financial Hits Milestone, Will Still Fund in Texas
July 9, 2025
Idea Financial, a nationwide small business lender, recently surpassed $1 billion in funding since inception.
“This is a historic milestone,” said Larry Bassuk, president and co-founder of Idea Financial. “Only a few years ago, this company was just a concept with potential. Like many of the small businesses we serve, we started with confidence, grit, and the unyielding belief that we would succeed. Today, I can proudly announce that Idea Financial’s impact on the small business lending community is significant and positive. This moment belongs to our team, past and present, whose dedication has gotten us here.”
Because the company does term loans and lines of credit, it is not impacted by the recently-passed sales-based financing legislation in Texas and will continue to fund there like normal.
For background, Bassuk and Idea Financial CEO Justin Leto, actually started out in the legal profession as attorneys before taking a risk in small business lending. When deBanked first interviewed the duo in 2019, they said, “We’re not from the finance space, we’re not from the alternative lending space either, we came at this opportunity with a different approach.”
At that time, Idea had only funded $50 million since inception. Much of Idea’s growth since then can be attributed to their broker business, which it is still growing.
“Brokers and referral partners are critical to Idea’s success,” the company said. “While our borrowers are our clients, we also consider brokers and referral partners as clients by our team. We value their business and have made it a focus to develop close, mutually beneficial relationships with them.”
“We have been so fortunate to work with such a talented team, all of whom have contributed to the incredible growth of Idea,” said Leto. “We identified a problem with small business funding when we embarked on this journey, and we are so proud to have played a role in providing the solution that has fueled so many Main Street success stories.”
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