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Are merchant cash advances legal?
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Yes, merchant cash advances are legal. They are structured as the purchase of a business's future receivables rather than as loans, which is how they operate outside traditional lending and usury laws. That said, the structure is increasingly scrutinized: courts and some state regulators examine whether a particular merchant cash advance is a genuine purchase of receivables or a disguised high-interest loan, and several states have introduced commercial-financing disclosure requirements. Legality of the product overall does not mean every individual contract is enforceable as written.
Legal product, contract-by-contract enforceability
Whether your specific agreement is a true purchase or a disguised loan is a fact-specific legal question with real consequences, and one worth reviewing with a licensed attorney. The product being legal in general tells you little about whether your particular contract holds up under the governing state's law.