Before you sign: the 18 questions
Eighteen questions to answer from the document itself, not from the sales call, before you sign a merchant cash advance. Fill them in here or print the page and write them by hand. Nothing you type leaves your browser.
Any question you cannot answer from the paperwork is itself the answer. It means you are about to sign something whose terms you do not know, and the fix is to ask the provider in writing before signing, not to hope.
Last reviewed against the primary sources cited on this page: 6 August 2026. Enforcement actions, statutes and regulations in this area change quickly. Re-check every source before you rely on it.
Not legal advice, not financial advice
This is a preparation worksheet. It does not review your agreement, does not tell you whether to take the deal, and creates no attorney-client relationship. Question 17 exists because the other seventeen are the material a business-finance attorney needs, not a substitute for one.
How to use this
- Ask the provider, in writing, for every document you will be asked to sign, including guarantees, ACH authorisations, exhibits and any confession of judgment.
- Work questions 1 to 4 with the free cost calculator open.
- Work questions 5 to 16 with the red-flag checker beside you.
- Send questions 5, 6, 9, 10, 11 and 12 to the provider in an email and keep the reply.
- Then question 17. Then, only then, decide.
The 18 questions
1. Exactly how much cash will reach my bank account after every fee?
How to answer it: Not the purchased amount, not the "approved" amount, and not the purchase price on the cover page. Ask for the funding statement showing every deduction, and get it in writing before you sign.
Why it matters: This is the only number your cost should ever be calculated on. Regulators have alleged funding thousands of dollars short of what was promised because of fees that were not disclosed.
2. What is the total amount that will be repaid?
How to answer it: The purchased amount or total repayment, in dollars. Include every fee that is added rather than deducted.
Why it matters: Total repayment minus cash received is the dollar cost. Everything else is presentation.
3. What is the withdrawal, how often does it happen, and on how many days?
How to answer it: The dollar figure, the frequency, and the number of debit days per week. Then multiply it out for a week and a month yourself.
Why it matters: A number that sounds small daily is not small monthly. $575 a day is roughly $12,500 a month.
4. What percentage of my average collected revenue does that consume?
How to answer it: Use collected revenue, not invoiced revenue. Retainage you have not been paid is not collected. Run it through the free calculator.
Why it matters: This is the number that decides whether the business can carry the deal, and it is almost never the number in the sales conversation.
5. Does the payment fall automatically if my revenue falls?
How to answer it: Find the exact clause. "Automatically" means without you asking. If you have to ask, the answer to this question is no.
Why it matters: If it does not fall automatically, then a rained-out fortnight, a failed inspection or a disputed change order costs you the full withdrawal anyway.
6. How do I request reconciliation, and how fast must the provider respond?
How to answer it: The method (writing? a portal? a specific address?), the documents required, the deadline on you, and — critically — the deadline on them. If there is no deadline on the provider, write "none".
Why it matters: A right with no response deadline is not a right. Full withdrawals continuing for three weeks while a request sits unanswered is the difference between a slow month and a missed payroll.
7. Am I personally guaranteeing this, and who else is?
How to answer it: Look for a guarantee of payment or of performance, including in a separate exhibit or a second signature page. Name every guarantor.
Why it matters: It moves the risk from the company to your house and your savings. Marketing that says no personal guarantee has been the subject of FTC allegations where the contract said otherwise.
8. Am I authorising a UCC filing, and against what collateral?
How to answer it: Find the security interest grant and the UCC authorisation. Write down exactly what collateral is described, and what it takes to get the filing terminated after payoff.
Why it matters: A blanket filing on receivables and equipment is public and can sit between you and a bank line, a bond or an equipment loan later.
9. What exactly counts as default?
How to answer it: List every trigger. Non-payment is usually only the first one. Look for bounced debits, changing banks, taking other financing, adverse change, representation breaches, insolvency admissions.
Why it matters: The wider the definition, the more ordinary events in a construction year can accelerate the entire unpaid amount.
10. What happens after a default?
How to answer it: Acceleration of what amount? Confession of judgment? Contact with my customers or processor? Attorney fees and collection costs? Additional debits? Write each remedy down.
Why it matters: This is the part of the contract you will only ever read under pressure. Read it now, when you can still decline.
11. If I pay this off early, do I pay less?
How to answer it: Get the answer in the document, not on a call. A discretionary discount is a no. Ask what the payoff figure would be at 30, 60 and 90 days.
Why it matters: If there is no discount, paying early does not save money — it concentrates the same dollar cost into a shorter period, which makes the annualised cost worse.
12. Who is the broker, and what is the broker being paid?
How to answer it: The name of every intermediary and the amount and source of their compensation. Ask whether it comes out of my funding or from the provider.
Why it matters: A commission paid out of your funding is part of your cost. FTC staff has recorded that MCA providers often rely on broker and lead-generator networks paid large commissions.
13. Is any of this money paying off an existing advance?
How to answer it: Look for a payoff, buyout or "consolidation" line in the funding statement, and get the payoff figure.
Why it matters: If most of the new money retires an old balance, the cash reaching your business is small while the cost is calculated on the large number.
14. Is this stacked on top of financing I already have?
How to answer it: List every financing payment already leaving the account: other advances, equipment loans, term loans, card minimums. Add the new one.
Why it matters: The second withdrawal is not additive to a healthy business. It is additive to a business already being drained by the first.
15. Which state’s law governs this agreement?
How to answer it: Find the governing law clause and write the state down.
Why it matters: It changes which rules are argued to apply, including rules on rate limits and on whether the transaction is treated as a loan at all.
16. Where would a dispute have to be brought or defended?
How to answer it: Find the venue or forum selection clause. Write the court, city and state, or the arbitration forum.
Why it matters: For a small contractor, a forum two thousand miles away is functionally the same as having no defence.
17. Has a business-finance attorney read this agreement?
How to answer it: Name, date reviewed. If the answer is no, stop here. This is the question the other seventeen exist to make answerable.
Why it matters: A few hundred dollars of review against a personal guarantee, a blanket UCC filing and a confession of judgment is not a close call.
18. What lower-cost options did I look at, and why did I reject each one?
How to answer it: Write one line per option: bank line, SBA-backed financing, equipment financing, invoice financing, supplier terms, customer deposits where legally permitted, progress billing, cards, owner capital, expense reduction, renegotiated schedules, credit unions, CDFIs. "I did not have time" is an honest answer and it is also the finding.
Why it matters: If the honest answer is that nothing else was tried, the real problem is that the alternatives were not started early enough — and that is fixable for next time even if it is not fixable today.
Sources behind these questions
Each question exists because an official record, a court decision, or a statutory disclosure requirement points at the thing it asks about.
“In connection with other claims they make to consumers, the defendants will be required to clearly and conspicuously disclose any fees that will be paid by consumers for the financing, as well as the actual amount of money that a consumer will receive after the fees are charged.”
Federal Trade Commission press release, "Cash Advance Firm to Pay $9.8M to Settle FTC Complaint It Overcharged Small Businesses", 22 April 2021. https://www.ftc.gov/news-events/news/press-releases/2021/04/cash-advance-firm-pay-98m-settle-ftc-complaint-it-overcharged-small-businesses
Reviewed 6 August 2026. Questions 1 and 2. This is relief the FTC obtained; it is a good description of the two numbers you should insist on knowing.
“(1) The total amount of funds provided. (2) The total dollar cost of the financing. (3) The term or estimated term. (4) The method, frequency, and amount of payments. (5) A description of prepayment policies. (6) The total cost of the financing expressed as an annualized rate.”
California Financial Code section 22802 (commercial financing disclosures; added by SB 1235, Stats. 2018, ch. 1011, amended by SB 33, Stats. 2023, ch. 376), text as published by California Legislative Information. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN§ionNum=22802
Reviewed 6 August 2026. Questions 1, 2, 3 and 11. California Financial Code § 22802 requires covered providers to disclose exactly these items.
“Accordingly, it would be concerning, and potentially unlawful, if MCA providers fail to adjust payment amounts to reflect a decrease in sales.”
Federal Trade Commission, Bureau of Consumer Protection staff, "Strictly Business: An FTC Forum on Small Business Financing" (staff perspective), February 2020. https://www.ftc.gov/system/files/documents/reports/staff-perspective-paper-ftcs-strictly-business-forum/strictly_business_forum_staff_perspective.pdf
Reviewed 6 August 2026. Questions 5 and 6.
“Usually, courts weigh three factors when determining whether repayment is absolute or contingent: (1) whether there is a reconciliation provision in the agreement; (2) whether the agreement has a finite term; and (3) whether there is any recourse should the merchant declare bankruptcy”
LG Funding, LLC v United Senior Props. of Olathe, LLC, 181 AD3d 664, 2020 NY Slip Op 01607 (App Div, 2d Dept), decided 4 March 2020. https://www.nycourts.gov/Reporter/3dseries/2020/2020_01607.htm
Reviewed 6 August 2026. Questions 5, 6, 9 and 10.
“Deceiving consumers about personal guarantees: The defendants’ websites falsely claimed that their cash advances required "no personal guaranty of collateral from business owners" ... In fact, their contracts did include those requirements.”
Federal Trade Commission press release, "FTC Action Results in Ban for Richmond Capital and Owner From Merchant Cash Advance and Debt Collection Industries and Return of More Than $2.7M to Consumers", 6 June 2022. https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-action-results-ban-richmond-capital-owner-merchant-cash-advance-debt-collection-industries
Reviewed 6 August 2026. Question 7 — and the instruction to answer it from the document rather than the marketing.
“Panelists at our Forum noted that MCA providers often rely on large networks of brokers (sometimes referred to as "independent sales organizations" or "ISOs") and lead generators to promote their products through telemarketing and other channels, often paying them large commissions for leads.”
Federal Trade Commission, Bureau of Consumer Protection staff, "Strictly Business: An FTC Forum on Small Business Financing" (staff perspective), February 2020. https://www.ftc.gov/system/files/documents/reports/staff-perspective-paper-ftcs-strictly-business-forum/strictly_business_forum_staff_perspective.pdf
Reviewed 6 August 2026. Question 12.
“Such consequences include being forced to renew their advances or take out multiple MCAs at the same time, potentially encumbering the same receipts (a phenomenon known as "stacking")”
Federal Trade Commission, Bureau of Consumer Protection staff, "Strictly Business: An FTC Forum on Small Business Financing" (staff perspective), February 2020. https://www.ftc.gov/system/files/documents/reports/staff-perspective-paper-ftcs-strictly-business-forum/strictly_business_forum_staff_perspective.pdf
Reviewed 6 August 2026. Questions 13 and 14.
- Federal Trade Commission, Bureau of Consumer Protection staff, "Strictly Business: An FTC Forum on Small Business Financing" (staff perspective), February 2020. https://www.ftc.gov/system/files/documents/reports/staff-perspective-paper-ftcs-strictly-business-forum/strictly_business_forum_staff_perspective.pdf — reviewed 6 August 2026.
- Federal Trade Commission press release, "Cash Advance Firm to Pay $9.8M to Settle FTC Complaint It Overcharged Small Businesses", 22 April 2021. https://www.ftc.gov/news-events/news/press-releases/2021/04/cash-advance-firm-pay-98m-settle-ftc-complaint-it-overcharged-small-businesses — reviewed 6 August 2026.
- Federal Trade Commission press release, "FTC Action Results in Ban for Richmond Capital and Owner From Merchant Cash Advance and Debt Collection Industries and Return of More Than $2.7M to Consumers", 6 June 2022. https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-action-results-ban-richmond-capital-owner-merchant-cash-advance-debt-collection-industries — reviewed 6 August 2026.
- LG Funding, LLC v United Senior Props. of Olathe, LLC, 181 AD3d 664, 2020 NY Slip Op 01607 (App Div, 2d Dept), decided 4 March 2020. https://www.nycourts.gov/Reporter/3dseries/2020/2020_01607.htm — reviewed 6 August 2026.
- California Financial Code section 22802 (commercial financing disclosures; added by SB 1235, Stats. 2018, ch. 1011, amended by SB 33, Stats. 2023, ch. 376), text as published by California Legislative Information. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN§ionNum=22802 — reviewed 6 August 2026.
- New York Financial Services Law section 803 (sales-based financing disclosure requirements), Financial Services Law article 8, text as published by the New York State Senate. https://www.nysenate.gov/legislation/laws/FIS/803 — reviewed 6 August 2026.
This is not legal advice and it is not financial advice. Contractor Lane is not a law firm, not a lender, not a broker, not a funder, and not a financial adviser. Nothing on this page is a recommendation to take or refuse any financing. Merchant cash advance agreements differ from one another in ways that change the legal answer, and the law that applies to yours depends on the actual wording of your contract and on your state. Before you sign, take the agreement to a business-finance attorney, and take the numbers to a CPA or a qualified commercial-finance adviser who is not being paid a commission on the deal.
We do not sell, broker, refer or receive any payment from any financing provider. There is no affiliate link, no referral link, no lead form and no lender directory anywhere in this resource, and there will not be one. If a page here ever routes you to a funding company, that page is broken and you should not trust it.