The Legal Ground You’re Standing On
Florida MCA law: the three facts that shape every option
Every resolution strategy — renegotiation, settlement, defense, refinancing — plays out differently depending on these three pieces of Florida law. A firm that can’t speak to them isn’t the best firm for a Florida file.
1Usury limits & the recharacterization question
Florida's civil usury cap is 18% simple interest per year for loans of $500,000 or less (Fla. Stat. § 687.02). Criminal usury under § 687.071 makes willfully charging over 25% (up to 45%) a second-degree misdemeanor and over 45% a third-degree felony — and credit extended in violation of that section "shall not be an enforceable debt in the courts of this state." Those caps apply only to loans: in Craton Entertainment v. Merchant Capital Group (Fla. 3d DCA 2021), a true MCA purchase of future receivables was held not to be a loan because repayment was contingent on revenue. Recharacterization risk remains where repayment is effectively absolute — though Fla. Stat. § 559.9611 now provides that a provider's characterization of a covered receivables purchase as a purchase "is conclusive" that it is not a loan, a legislative carve-out favoring funders for transactions within that law's scope.
Sources: Fla. Stat. § 687.02 (usurious contracts, 18%) · Fla. Stat. § 687.071 (criminal usury, 25%/45%) · Bradley — Florida court affirms MCA not subject to usury statute (Craton) · Fla. Stat. § 559.9611 (purchase characterization conclusive)
2Confessions of judgment in Florida
Void in Florida Florida has barred confessions of judgment since 1828: Fla. Stat. § 55.05 declares all powers of attorney for confessing judgment "absolutely null and void," whether executed inside or outside the state. MCA funders therefore cannot use Florida courts to enter judgment by confession against a Florida business. Historically they routed COJs through New York instead — until New York closed that door to out-of-state debtors in 2019 — so the COJ threat to Florida merchants is largely historical, not current.
Sources: Fla. Stat. § 55.05 (powers of attorney to confess judgment void)
3Florida Commercial Financing Disclosure Law: what funders must tell you
Florida enacted the Commercial Financing Disclosure Law in 2023 (CS/HB 1353, Ch. 2023-290; Fla. Stat. §§ 559.961–559.9615), applying to commercial financing of $500,000 or less consummated on or after January 1, 2024 — expressly including accounts receivable purchase transactions like MCAs. At or before closing, providers must disclose total funds provided and actually disbursed, total repayment amount, total dollar cost, the payment schedule (or estimated variable-payment methodology), and prepayment costs or discounts. The Florida Attorney General has exclusive enforcement authority (fines up to $500 per violation, escalating after notice); there is no private right of action, violations do not void the transaction, and — unlike New York — no APR disclosure is required.
Sources: CS/HB 1353 (2023) — signed June 23, 2023 · Fla. Stat. § 559.9612 (scope: ≤$500,000, on/after Jan. 1, 2024) · Fla. Stat. § 559.9613 (required disclosures) · Fla. Stat. § 559.9615 (AG enforcement, penalties)
How funders actually enforce here: Because MCA contracts almost always choose New York or another funder-friendly forum, funders typically obtain judgments elsewhere and domesticate them in Florida: under the Florida Enforcement of Foreign Judgments Act (Fla. Stat. § 55.503), a certified out-of-state judgment recorded with a circuit court clerk is enforced exactly like a Florida judgment — liens, garnishment, execution. Funders also file UCC-1 liens against receivables, send notices that can freeze payment processors and bank deposits, and sue directly in Florida courts on the contract. Fla. Stat. § 55.503 (domestication of foreign judgments) · Grant Phillips Law — Florida MCA enforcement practice
