To be one of the best business debt settlement companies in San Jose, a provider needs to understand the difference between a platform bank loan, revenue-based loan, or merchant cash advance, how a New York judgment would be enforced in Santa Clara County Superior Court, and how much of a $1.9 million home could be at risk.
Why does the type of revenue-based financing matter for settlement?
Several platforms offer bank loans to San Jose ecommerce companies, like Shopify Capital, issued by WebBank and paid from a set percentage of daily sales for up to 18 months with a minimum payment, or PayPal Working Capital loans, paid from a percentage of your PayPal sales with a minimum repayment every 90 days and one set fee.
Stripe sometimes offers a loan and sometimes a merchant cash advance, and according to their documentation you cannot request either: “Each offer specifies the type of financing being offered, which might be a loan or merchant cash advance.” The loan option, issued by Celtic Bank or Lead Bank, has a minimum payment checked every 30 or 60 days, and a shortfall is debited from your bank account. With the MCA, YouLend purchases your future accounts receivable and Stripe withholds a certain percentage until paid off (read our guide on what that means).
Many SaaS companies carry revenue-based loans as well, like those from Lighter Capital. They describe it as a loan secured by your recurring revenue with a “repayment cap”; a 1.2 cap on $500,000 means $100,000 in cost. Their documents can contain covenants and warrants, which classic MCA documents do not. Since January 1, 2026, a provider quoting a charge or pricing metric on an offer of $500,000 or less must also state the APR under Financial Code 22806. Whether they hold a California Financing Law license is covered on our San Francisco page.
Settlement levers by product type
| What type of product do you have? | Where a provider's leverage usually comes from |
|---|
| Platform bank loan (Shopify, Stripe loan) or PayPal Working Capital | Their hardship or modification program and bringing the minimum payment current |
| Platform MCA (Stripe via YouLend) | A reconciliation or holdback percentage reset, or a discounted lump sum |
| Nonbank ecommerce advance or SaaS revenue loan | Default terms, disclosure issues, covenants, and priority against your senior bank or venture lender |
| Classic MCA with a daily debit, usually from a New York funder | Read our guide on the best companies in California |
These platform products withhold a percentage of your payouts, so there is no ACH authorization to cancel. Moving off Shopify or Stripe is rarely realistic either.
What would happen in Santa Clara County Superior Court?
Usually the funder sues in New York, then files the judgment in Santa Clara County Superior Court. Under CCP 1710.40, you have 30 days after service of the notice of entry of the judgment to file a motion to vacate. They cannot enter a confession of judgment in a California superior court unless it was entered before 2023, per CCP 1132.
Civil cases are handled at the Downtown Superior Court, 191 N First St, and the Old Courthouse next door at 161 N First St. Claims up to $35,000 are limited civil cases. The court has a Complex Civil Litigation department but no commercial division.
After judgment, a registered process server can levy your deposit accounts and receivables with an automatic $2,325 exemption per debtor (as of July 1, 2026). Your funder (if secured) can notify your customers to pay them directly pursuant to Cal. Com. Code 9607.
How much of a San Jose home does the homestead exemption protect?
Only the capped amount. So a personal guarantee puts more of your dollars at risk here than in most of California. Pursuant to CCP 704.730, San Jose residents are entitled to the prior year’s countywide median single family sale price, capped at $600,000, or $300,000 if that is greater, with both figures adjusted for California inflation every year since 2022. C.A.R. data shows the Santa Clara County median at $1.9 million in August 2026, so you will always get the cap, about $740,000 in 2026 by our estimate from California’s CPI (confirm with counsel).
Example: a $1.9 million San Jose home with a $900,000 mortgage holds $1 million in equity, about $259,000 above the estimated homestead exemption in 2026. Judgment creditors need a court order to sell, a bid above the exemption plus liens, and court permission for any bid under 90% of fair market value, which the median San Jose home clears easily. If you wanted to refinance or take out a HELOC to settle, a judgment creditor who records an abstract of judgment pursuant to CCP 697.310 creates a lien lasting ten years that can block it.
What questions should I ask potential providers?
Ask them to list your positions by product, by issuer before quoting a number. Ask what they would file within the 30-day window to vacate and who appears for you at the North First Street courthouses. DFPI debt settlement registration only pertains to consumer debt, so it says nothing about how good they are. Ask if they charge on the debt you enroll or the debt you settle. At 20%, $50,000 enrolled costs $10,000; settle that debt at 45% and 20% of the settlement is only $4,500.
Frequently Asked Questions
How do I tell whether my Stripe Capital offer is a loan or a merchant cash advance?
Review the agreement you signed. Stripe may offer you a loan or an MCA, and you cannot choose. A YouLend Advance Agreement means you sold your future receivables; a Loan Agreement with Celtic Bank or Lead Bank means you borrowed from the bank.
Can my funder get a Confession of Judgment in San Jose, California?
Not in a California court. Pursuant to CCP 1132, a judgment by confession may not be entered in any superior court in this state unless it was obtained or entered prior to January 1, 2023, so the usual path is to sue you in New York and domesticate the judgment in Santa Clara County.
How much of my deposit account is exempt from a levy in California?
As of July 1, 2026, you are automatically entitled to $2,325.00 in your deposit accounts pursuant to CCP 704.220. It applies per debtor, not per account, and is not much money.
Can my funder contact my customers and have them pay the funder?
Pursuant to Cal. Com. Code 9607, your funder (if they are a secured party) can notify your account debtors (the people who owe you money) to pay them directly after you default. If you are a B2B software company, your account debtors are probably large enterprises.