MCA Settlement Reviews
Menu
MCA Settlement Reviews

True Business Funding lawsuit: what the Second Department held in Guerrero

True Business Funding lawsuit coverage of Guerrero: the Second Department affirmed funder SJ and rejected the criminal usury defense.

Updated

Home · News · True Business Funding lawsuit

By Anonymous MCA industry contributor Research, writing and editorial review · MCA sales background

A True Business Funding lawsuit search usually lands on private New York collection litigation naming True Business Funding, LLC, not a statewide Attorney General enforcement caption. The clearest published appellate signal is the Second Department's June 11, 2025 decision (as corrected through August 6, 2025) in True Bus. Funding, LLC v. Guerrero A Constr. Corp., 2025 NY Slip Op 03598, 239 AD3d 787. That appeal affirmed a Kings County summary-judgment judgment for the funder after the merchant's criminal-usury defense failed under the familiar three-factor receivables test. This page sticks to that Slip Opinion. It is not a prediction about your file.

Editorial update: 2026-10-27 · Desk research of the published Second Department opinion only. Not legal advice.

Quick answer

ItemPublic record
Lead published caseTrue Bus. Funding, LLC v. Guerrero A Constr. Corp., 2025 NY Slip Op 03598, 239 AD3d 787, 236 NYS3d 679 (2d Dept June 11, 2025; corrected through Aug. 6, 2025)
Trial courtSupreme Court, Kings County (Maslow, J.), judgment dated April 20, 2023 upon Feb. 8, 2023 SJ order
Appellate outcomeJudgment affirmed; one bill of costs to True Business Funding
Index / appealIndex No. 522667/22; App. Div. docket 2023-02387
Core disputeBreach action on a merchant agreement after ACH rejects; merchant argued the deal was a criminally usurious loan

Soft next step if papers name True Business Funding or a related guaranty caption: read the Slip Op factors against your own agreement language before you assume the usury label controls.

What the Second Department held

On July 1, 2022, True Business Funding and Guerrero A Construction Corp. (styled as an LLC in the opinion) entered a written merchant agreement. The funder purchased future receivables valued at $75,000 for $50,000, minus a $3,665 fee, for a net purchase price of $46,335. Gabriel A. Guerrero signed a personal guaranty. The company paid $2,500, then authorized ACH debits started bouncing for insufficient funds. True Business Funding sued for breach. The merchant moved for summary judgment dismissing the claim as a void criminally usurious loan. The funder cross-moved for summary judgment on the complaint. Kings County denied the merchant's motion, granted the funder's cross-motion, and entered judgment for $93,651.88. The merchant appealed.

The Second Department walked the standard New York framework:

  1. Usury requires a loan or forbearance. Without a loan, there is no usury, "however unconscionable the contract may be" (Crystal Springs Capital).
  2. Courts look at the transaction's real character, not the label (Abir; LG Funding).
  3. Absolute entitlement to repayment under all circumstances is the loan test (Principis Capital). Courts weigh (a) a reconciliation provision, (b) whether the term is finite, and (c) recourse if the merchant declares bankruptcy.

On those facts the panel held True Business Funding made out a prima facie purchase of future receivables, not a criminally usurious loan:

  • The agreement let the merchant request reconciliation to adjust payments up or down with weekly-receipt swings.
  • That reconciliation clause made the term indefinite.
  • Bankruptcy was a "valid excuse" from performance and not a default, so repayment was not absolute. The same bankruptcy language also blocked invoking Guerrero's personal guaranty.

The merchant raised no triable issue in opposition. Judgment affirmed. Dillon, J.P., Ford, Landicino, and Golia concurred.

Why this matters for "True Business Funding lawsuit" searches

This is a funder-side appellate win on the three-factor RPA test, not a merchant-side vacatur story and not an AG / FTC enforcement caption. Compare:

If your caption is True Business Funding collecting after ACH failure, Guerrero is the published Second Department signal that reconciliation + indefinite term + bankruptcy-as-excuse can defeat a criminal-usury summary-judgment defense. That still turns on the wording of the agreement in your file. A different reconciliation clause, a finite term, or bankruptcy-as-default language can push a court the other way.

Related funder lawsuit pages

See the MCA lawsuit tracker for how True Business Funding's cases line up against other funders'.

Sources (public)

Takeaway

Treat "True Business Funding lawsuit" search intent primarily through the Second Department's Guerrero opinion: a published affirmance of a funder summary-judgment judgment where reconciliation, an indefinite term, and bankruptcy-as-valid-excuse defeated a criminal-usury defense. That is an appellate receivables-vs-loan signal, not a statewide ban and not an FTC refund story.

Talk to our featured first provider

Request a free consultation from Coastal Debt Resolve. Confirm fees, service scope, and any legal representation in writing.

Get a free review

Also comparing providers? Read our Business Debt Insider review, and confirm any engagement terms directly with BDI.