Yellowstone Capital Hit with $1B Judgment for Predatory Lending: What This Means for Small Business Debt Relief
In January 2025, the New York State Attorney General Letitia James secured a $1.065 billion judgment against Yellowstone Capital and 25 affiliated companies. The case alleged that Yellowstone disguised high-interest loans as merchant cash advances (MCAs) and imposed repayment terms that violated New York’s usury laws. This marks one of the largest enforcement actions against MCA funders in U.S. history.
As a company that helps small businesses resolve MCA debt through business debt relief and settlement, this ruling is a monumental step forward. It validates what we’ve long warned business owners about: predatory MCA practices are not just unethical—they’re illegal.
Key Outcomes from the Settlement
- Over $534 million in MCA debt canceled for more than 18,000 small businesses
- $16.1 million in restitution paid immediately, with a potential increase to $30 million
- Permanent industry ban on Yellowstone Capital and its executives
- Judgments vacated and liens lifted for eligible businesses who file by July 8, 2025
How Yellowstone Exploited Small Businesses
Yellowstone claimed their MCAs were “purchases of future receivables,” but in reality, they enforced fixed daily repayment terms over 60–90 days, regardless of a business’s cash flow. The result? Businesses faced effective interest rates as high as 820% APR, vastly exceeding the legal limit of 16% in New York.
For countless businesses, this meant draining their bank accounts daily and turning to new MCAs to stay afloat, creating a spiral of debt. As Yellowstone is now permanently banned, this serves as a cautionary tale about the real risks of unregulated cash advance providers.
Why This Case Matters to Business Owners Today
Even if you were not directly impacted by Yellowstone, this case illustrates the urgent need for MCA debt relief services. Many other funders still use similar practices—stacking advances, enforcing aggressive collections, and charging hidden fees.
If your business is:
- Making daily or weekly payments to multiple MCA providers
- Facing a judgment or bank levy
- Being threatened with legal action by lenders
…it’s time to consider business debt settlement as your next step.
How We Help Small Businesses Escape MCA Debt
Our team specializes in merchant cash advance relief, using proven negotiation strategies to:
- Settle high-interest MCA debt for a fraction of the balance
- Vacate harmful judgments and remove liens
- Stop daily withdrawals and restore positive cash flow
- Create affordable repayment plans through structured settlements
This landmark case gives even more leverage to business owners seeking MCA debt resolution—especially when dealing with funders who may now fear legal scrutiny.
Legal Momentum Is On Your Side
With additional investigations underway against Delta Bridge Funding and Yellowstone’s co-founder David Glass, it’s clear that regulators are taking MCA abuse seriously. That means funders may be more willing to negotiate and settle claims to avoid public exposure.
This makes it a strategic time to act. Working with an experienced business debt relief company now could mean better settlement terms, faster resolution, and protection from future lawsuits.
Final Thoughts
The Yellowstone Capital judgment sends a strong message: MCA funders who prey on small businesses will be held accountable. But justice doesn’t stop with lawsuits—it continues with real relief for those still burdened by high-cost debt.
If your business is trapped in the cycle of MCA debt, we’re here to help. Our business debt settlement services are built to challenge predatory contracts, reduce what you owe, and give your business the breathing room it needs to recover and grow.
Ready to Reclaim Your Business?
Let us help you evaluate your MCA agreements and build a path to resolution. Contact us now for a free consultation. Together, we’ll protect your business and secure the relief you deserve.
*May contain inaccuracies, content written by AI.
