Event of default

Every financing contract lists what counts as a default. In merchant cash advances, typical events include blocking or changing the account the funder debits, diverting card sales to another processor, taking new financing that breaks an anti-stacking clause, closing or selling the business without notice, and giving false information on the application.

A default can trigger the funder's remedies at once: the full remaining balance, default fees, collection on the personal guarantee and, where state law still allows it, a confession of judgment. Read this section as closely as the price.

In a true merchant cash advance, slower sales on their own should not be a default, because the funder bought a share of receipts that may never arrive. If sales fall, ask for reconciliation instead of stopping payments. This is general information, not legal advice.