Federal and state regulators are cracking down on lenders targeting small businesses with high-cost loans and abusive collection tactics, generating unease in a lightly regulated industry that has flourished as it put merchants in a vise.
One company, Par Funding, of Philadelphia, was raided by the FBI on July 28, an FBI official confirmed, and has been sued by the Securities and Exchange Commission. Two others — RCG Advances and Yellowstone Capital, both of New York — have been sued by the Federal Trade Commission for allegedly misrepresenting the terms of their financings.
