The Legal Ground You’re Standing On
Washington 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 Washington law. A firm that can’t speak to them isn’t the best firm for a Washington file.
1Usury limits & the recharacterization question
Washington's usury statute (RCW 19.52.020) caps interest at the higher of 12% or four points above the 26-week Treasury yield — but RCW 19.52.080 bars borrowers from even pleading usury when the transaction was "primarily for agricultural, commercial, investment, or business purposes." That means a Washington business may be unable to raise the state usury defense even if a court recharacterizes its MCA as a loan. Recharacterization arguments for Washington merchants therefore tend to run through the contract's chosen law (usually New York's, with its 25% criminal usury line) or through bankruptcy-court analysis — as in the Shoot the Moon case, where a restaurant group operating in Washington saw its funder's MCAs recharacterized as usurious loans.
Sources: RCW 19.52.020 — highest permissible rate · RCW 19.52.080 — usury defense barred for business-purpose transactions
2Confessions of judgment in Washington
Permitted, with statutory safeguards Washington still permits judgment by confession under chapter 4.60 RCW, but with safeguards: RCW 4.60.060 requires a written statement signed and verified by the defendant's oath, authorizing judgment for a specified sum and concisely stating the facts out of which the indebtedness arose. A bare pre-dispute COJ form of the kind historically embedded in MCA contracts may fail those verification and factual-recital requirements — but Washington has not banned confessions outright, so a Washington MCA file with a confession clause deserves attorney review rather than assumption.
Sources: RCW ch. 4.60 — judgment by confession · RCW 4.60.060 — written statement requirements
3Commercial financing disclosure: where Washington stands
Washington has not enacted a commercial financing disclosure law — the March 2026 Venable survey lists ten enacted states (California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah, Virginia) with Washington in neither the enacted nor pending column. Washington merchants have no statutory right to pre-signing cost disclosures, so the agreement itself is the only place the true cost appears — and with the business-purpose usury bar, pre-signing review matters more here than in most states.
Sources: Venable — State Commercial Financing Disclosure Laws (Mar. 2026)
How funders actually enforce here: Funders typically obtain judgments in their contract-selected forum and domesticate them under Washington's Uniform Enforcement of Foreign Judgments Act (chapter 6.36 RCW) — a certified foreign judgment filed with an affidavit of the debtor's address enforces like a Washington judgment. Once domesticated, funders garnish bank accounts and receivables under chapter 6.27 RCW and routinely perfect blanket UCC-1 liens filed through the Washington Department of Licensing. New York's 2019 COJ amendment ended new confessed judgments against Washington businesses, but ordinary litigation judgments remain domesticable. RCW ch. 6.36 — Uniform Enforcement of Foreign Judgments Act · RCW ch. 6.27 — garnishment · NY CPLR 3218 (2019 residence restriction)
