Why COJ Was Never an Issue for Yalber's Clients

The fin-tech SMB funder explains why the COJ collection approach was never one of its methods, following the newly passed New York bill and the one being proposed by Congress to prevent it on the federal level.

​One of the biggest challenges in the merchant cash advance/online lending industry remains collect. Over the past 10 or 12 years, fin-tech SMB funder Yalber has noticed different trends in collect; most, if not all, are contractual attempts to enhance legal capability. 

COJ, Confession of Judgment, was a legal yet problematic way to enhance collect efforts by many lenders. As described in Bloomberg’s articles, some lenders were able to collect more than 100 percent of the funding amount within days from funding based on a legal loophole which allowed them to seek and enforce a judgment anywhere in the U.S.  

COJ was never a part of Yalber’s collect effort. The company prides itself on superior customer service, transparency and integrity. Much like the people who own and run it, businesses experience different cycles. Growth and expansion are typically followed by a plateau and a struggle. Basic economic theories apply at the small business level, and not only at the big corporations and government level. At Yalber, we get it. Collect is an important part of our business, but as important, and at times an even more important part, is making sure a business can go through the tough times without closing its doors.  

Serving the small business industry is a task that comes with a huge level of responsibility. Most bounce ACH payments have a story behind it, a reason. The Yalber team is making efforts to listen, analyze and find a solution that will work for both its merchants and our company. Enforcing a COJ after one bounce payment is the opposite of serving a small business. Much like Yalber, the New York state government, as well as the federal government, recognize that levying a small business bank account due to a bounce payment may help the funding company, but the damage to a small business is extreme and can cause a domino effect that will end up with a business closing its doors for good. 

At Yalber Royalty Based Investments, we empower small business owners to make great financial decisions. We believe that reasonable rates, flexible repayments and open communication pre- and post-funding are better tools than any contractual element.

Source: Yalber


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