The Legal Ground You’re Standing On
South Carolina 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 South Carolina law. A firm that can’t speak to them isn’t the best firm for a South Carolina file.
1Usury limits & the recharacterization question
South Carolina has no usury cap on business credit at all: the 8.75% "legal rate" in S.C. Code § 34-31-20(A) is only a default where no rate was agreed, and the state repealed its general usury penalty statute in 1982. Rate regulation survives only in the Consumer Protection Code for consumer credit — a regime that does not reach business-purpose MCA financing. Practical effect: even if a South Carolina court recharacterized an MCA as a loan, there is no business-credit ceiling to violate, so recharacterization arguments here matter mainly for bankruptcy treatment and contract defenses rather than usury. A South Carolina merchant's protection is in the contract terms and the procedural rules — nowhere else.
Sources: S.C. Code § 34-31-20 (legal rate; official text) · FindLaw — SC usury penalties repealed 1982
2Confessions of judgment in South Carolina
Enforceable if statutory requirements are met South Carolina permits judgment by confession without action (S.C. Code §§ 15-35-350 to -380): the debtor signs a written statement, verified by oath, stating the amount, authorizing entry, and concisely stating the facts showing the sum is justly due — filed with the clerk, it becomes the judgment, and execution issues like any other. A compliant confession is enforceable in South Carolina; one that skips the sworn-statement requirements is vulnerable to challenge. Combined with the absence of any usury ceiling, this puts South Carolina toward the funder-friendly end of the spectrum — an SC merchant should know exactly what confession language is in the agreement before signing.
Sources: S.C. Code §§ 15-35-350 to -380 (confession of judgment)
3Commercial financing disclosure: where South Carolina stands
South Carolina has not enacted a commercial financing disclosure law — but one is pending: S. 347, the Commercial Financing Disclosure Act (introduced February 2025), would require written cost disclosures for commercial financing including accounts-receivable purchase transactions (MCAs) by providers doing more than five transactions a year, with exemptions above $500,000. Until it passes, South Carolina merchants hold no statutory disclosure rights, and with no usury backstop either, the agreement's actual terms are everything.
Sources: S.C. S. 347 (2025–26) — Commercial Financing Disclosure Act · Venable — State Commercial Financing Disclosure Laws (Mar. 2026)
How funders actually enforce here: Funders that obtain sister-state judgments domesticate them under South Carolina's UEFJA (S.C. Code §§ 15-35-900 to -960): the judgment is filed and docketed like a South Carolina judgment, the creditor must promptly serve notice, and the debtor has 30 days from receipt to seek relief before execution proceeds — a real window to act. A statute-compliant confession of judgment can also be entered and executed on directly. Funders routinely perfect UCC-1 liens against receivables, searchable through the Secretary of State's UCC Online system. No published MCA decision from any South Carolina court could be verified — merchants here are working with national doctrine, not local precedent. S.C. Code §§ 15-35-900 to -960 (UEFJA; 30-day window) · SC Secretary of State — UCC File and Search Online
