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San Antonio-based G-Core Construction, a commercial and residential builder, is suing a merchant cash advance company over about $2.5 million in financing. The construction company says W Funding Group LLC never provided legally required disclosures.<\/p>\n
Ozgur Artug\/Fotolia<\/p>\n
A San Antonio construction company is using a new Texas commercial financing law to challenge a merchant cash advance<\/a> company that provided roughly $2.5 million through a series of financing transactions.<\/p>\n G-Core Construction LLC<\/a> has sued Virginia-based\u00a0W Funding Group LLC<\/a>, alleging the company failed to provide legally required disclosures, including the total financing amount and finance charge, the total repayment amount and payoff terms.<\/p>\n Article continues below this ad<\/p>\n The lawsuit comes less than a year after Gov. Greg Abbott signed legislation<\/a> creating Chapter 398<\/a> of the Texas Finance Code, which regulates merchant cash advances and other \u201csales-based financing\u201d products offered to Texas businesses.<\/p>\n The law requires certain disclosures, mandates registration for merchant cash advance providers and brokers, and grants enforcement authority to the Texas Office of Consumer Credit Commissioner<\/a>.<\/p>\n Merchant cash advance firms have drawn increasing scrutiny from regulators and bankruptcy courts over allegations that some transactions function as high-interest loans disguised as purchases of future receivables.<\/p>\n San Antonio Express News Logo<\/p>\n Make us a Preferred Source on Google to see more of us when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n Former Chief U.S. Bankruptcy Judge Craig Gargotta<\/a>, who recently retired from the bench in San Antonio, has said merchant cash advance firms are known to employ \u201cDraconian terms.\u201d<\/a><\/p>\n Article continues below this ad<\/p>\n READ MORE: Why Texas froze a private San Antonio poker club\u2019s bank account, forcing it into bankruptcy<\/a><\/p>\n<\/p>\n