Washington never wrote a statute for the merchant cash advance, and that omission is the first fact an owner here has to understand, because a silence in the state code is not a silence in the contract. The legislature declined to regulate the product. The funder did not decline to draft around the gap. Where the state left the rules unwritten, the agreement supplied its own, and the rule it supplied is that New York law governs and a New York court decides.
So the operative clause for an owner in Washington is the one selecting another state. It carries no rate and no schedule and reads like boilerplate, and it is the most consequential sentence in the file. The funder chose New York deliberately. New York is where the paper was drafted, where the enforcement machinery already stands, and where the funder is most at home arguing that the document means what it says it means.
The Forum Decides The Address, Not The Merits
A forum clause moves the fight. It does not improve the funder's case, and the case the funder most fears travels with the file wherever the clause sends it. The contract calls itself a purchase of future receivables rather than a loan, and that single caption is the load on which the entire price rests, because a purchase carries a factor rate where a loan carries interest, and the usury statutes reach interest alone. Whether a court honors the caption turns on conduct rather than wording: whether the reconciliation clause adjusts the remittance to actual receipts as written, whether the daily figure is fixed in fact, whether the funder bore any of the risk a true buyer of receivables is supposed to bear. When a court finds the purchase is a loan in substance, the usury statute returns, and with it the room to bargain the agreement was drafted to deny.
A clause can change the room the argument is heard in. It cannot change the argument, and the argument is the part the funder built the clause to avoid.
The recharacterization question is not a Washington question, which is the point. It is a contract question, and it follows the contract to New York the way a debt follows a borrower across a state line: the address changed and the obligation did not. A New York court can run that analysis as competently as any court in Spokane or Tacoma, and the record now sitting in New York gives it reason to run it carefully.
The Record Reads Like A Confession The Funder Did Not Mean To Sign
In February of 2024 the New York Attorney General secured a judgment exceeding $77 million against Richmond Capital Group, Jonathan Braun, and the principals around them, for fraudulent conduct in the merchant cash advance business. A federal court, in a separate matter, ordered Braun to pay $20.3 million in relief and penalties. Read those two figures next to a factor rate the owner was told represented an ordinary cost of capital, and the distance between the industry's self-description and the industry's documented conduct stops being abstract. The forum the contract chose is the same forum compiling that distance in dollars.
None of this caps a price. None of it stops a debit. I have written this in other states and it holds in Washington without alteration. The record does not rescue the owner. It supplies the context a funder weighs when it decides whether settlement costs less than a fight over a contract that may not survive the recharacterization argument, and a funder weighs that context whether the clause says Albany or Olympia.
What remains is arithmetic, and the arithmetic is plain. A creditor holding a judgment against a company with an empty account holds something expensive to enforce and thin to collect; garnishment of a dry account returns a dry account, enforcement runs up fees the funder pays whether or not it recovers, and an owner who closes the doors pays no one. The funder understands this before the negotiation opens. The firms ranked above are ranked on how plainly they read that arithmetic, and on whether an attorney stands near enough to the table to make the recharacterization argument a thing the funder believes will be filed. Washington wrote no rule. The contract wrote one. The substance underneath both is the part that decides the number, and the first call, which costs nothing, is where reading it begins.