Receivables Purchase Agreement
The contract behind most MCAs: the funder agrees to buy a defined amount of the business's future receivables at a discount, paid as the upfront advance. Legally it is a sale of an asset, not a loan, which is what exempts it from lending laws in most states.
Why it matters
Everything unusual about MCA collections, UCC filings on all assets, direct access to your bank account, notices to your customers, flows from this structure. Read it for the reconciliation clause, the default triggers, and any Confession of Judgment before signing.
