Predatory Lending: A Call to Arms for Small Business Owners

Small businesses are the backbone of our communities, but too many are being crushed under the weight of predatory lending practices disguised as “easy money.”

Merchant cash advances (MCAs) and similar products are the business equivalent of payday loans. They link directly to your Point of Sale system or bank account and pull funds out daily—often far beyond the original loan amount. On the surface, they seem simple and discreet. The lender only wants to see that you have cash coming in, and approvals are fast. But the hidden cost is devastating.

Some of the names behind these products may surprise you. Alongside lesser-known companies, even large players like Intuit/QuickBooks and PayPal are offering cash advances that quietly trap business owners in cycles of debt. What starts as a quick cash infusion quickly becomes an endless drain on your business, siphoning revenue and stunting growth.

The problem is compounded because many Business Support Organizations (BSOs) either don’t realize this is happening, don’t warn their clients, or don’t know how to help businesses escape once they’re entangled. Meanwhile, the companies offering these products are minting money at the expense of entrepreneurs who are simply trying to survive.

Every day, small businesses are bombarded with offers for these “fast funding” options via email, phone calls, and online ads. The marketing makes them look like a lifeline—but in reality, they are an anchor.

It’s time for a call to arms:

• Business owners: Be cautious. Ask questions. Before taking an advance, talk with a trusted advisor who understands the full costs.

• BSOs and advisors: Educate your clients. Shine a light on these products and provide alternatives. Knowledge is protection.

• Community leaders and policymakers: We must advocate for better safeguards and fairer financial tools that support growth, not debt traps.

  
  

Our small businesses deserve access to capital that fuels their success—not products that quietly bleed them dry. Together, we can stop predatory lenders from thriving on the backs of those building our communities.