Yes Funding Litigation: 5 Reasons Default Judgment Is the Real Risk

If Yes Funding, by way of World Global Capital LLC, sued you or your business over an MCA, or threatened to, the lawsuit and the creditor itself are not usually the problem. The real danger is defaulting and not having an answer on file with the court.

YES Funding was a trade name of World Global Capital, LLC, a subsidiary of Yellowstone Capital. New Jersey sued World Global over alleged predatory lending and abusive collection tactics. They settled for a stipulated $27.375 million.

1. Few owners ever answer

Rockland County in New York hosts hundreds of lawsuits by MCA lenders suing business owners. Neither the funder nor the borrower are Rockland residents. The place where the contract is made is usually not Rockland, either. One Lendr Online contract even names Nassau County, even though it was filed in Rockland. Borrowers from around the country are sent paperwork in the mail and not by a process server. The result is that the county courts end up with dockets stuffed with uncontested judgments.

2. The clock runs fast

In New York, courts offer 20 days to answer if the process server hands the papers to you, and 30 days for some other service. But the creditors often do not ask for a hearing. They wait out the time, then ask for a default judgment. Few judges even see the papers. The clerk enters a judgment on a court docket. The clerk can process a fixed-sum money judgment, without a judge’s nod, if asked within a year, but a corporation served with papers via the Secretary of State needs to get a mailed copy with 20 days’ notice.

3. Your defenses disappear

Without a defense on file in court, the law favors the creditor. In In re Kossoff, a federal bankruptcy judge held the MCA contracts before him were really loans under New York usury law, citing reconciliation only going forward, fixed payments, and no real risk for the funder. In one Mantis Funding case the spread is huge: $17,100 for $24,460, $299 a day for 82 days, about 288% a year. That is far over New York’s 16% limit, and the rate charged as a loan might count as criminal usury. Lendr Online put forward $96,000 to buy $130,000 in future receivables. A projected percentage is about 64% a year as a loan. Merchant Marketplace offered $18,000 to buy $31,000 in future receivables. The percentage if a loan is about 546% a year.

The argument that it was not a loan because it was an agreement to buy receivables gets weaker if the funder does not ever run reconciliation. The MCA looks more like a loan if there is no real reconciliation process to compare the payout of receivables and the credit given the owner. Your defense would be that the agreement was not really a sale; it was really a disguised loan, subject to laws it violated. That argument can win in court, where nobody litigates defenses unless you show up.

4. The judgment bites hard

Once the funder wins, they can send a restraining notice on your bank account. Then the bank can freeze assets up to double what the judgment says. The judgment carries 9% interest. The 2% rate is only for consumers. MCA cases are commercial deals in the law’s eyes, so 9% is the rate. A judgment is good for 20 years. A payment, even a little one, or an acknowledgment of the debt in writing, re-opens the 20-year clock. At the courthouse, a judgment creditor can get a docket lien on any real property in that county owned by the judgment debtor for 10 years.

5. Undoing it is hard

Any relief involves a lot of work. Courts offer a chance to ask for relief from judgment, but the deadline is hard: usually no later than one year of being served with a copy of the judgment and a notice of entry of judgment. A good defense is not enough by itself. You also must have a reasonable excuse for not showing up. You might also show up and move to vacate because service was improper.

Under New York’s Yellowstone settlement, which covered World Global Capital, the court had vacated the last judgments in favor of funders as of Dec 18, 2025. Canceled merchant and guarantor debt in those cases totaled about $534 million. Time to file claims has now passed as of Jan 9, 2026. Don’t count on a rescue.

If you received a court summons, get counsel soon. You must answer within days.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.