Credibly vs Bluevine — who wins for what.

Frequently asked questions

What is confession of judgment (COJ) and how does the 2019 New York restriction affect MCA contracts?

Confession of judgment (COJ) is a contractual provision allowing a creditor to obtain a judgment against a debtor without filing a traditional collection lawsuit — the debtor pre-authorizes the judgment as part of the contract structure, allowing the creditor to file the judgment directly with the court upon default without merchant defense opportunity. The 2019 New York restriction (CPLR Section 3218(b), effective August 2019) affects MCA contracts by limiting COJ enforcement in New York to debtors with New York principal place of business or New York residency. The restriction was developed in response to industry pattern of out-of-state MCA funders using New York COJ filings against out-of-state merchants without merchant defense opportunity. The restriction has structural implications: (1) New York COJ filings now require debtor New York connection — out-of-state merchants previously subject to New York COJ enforcement now have protection from New York COJ filings; (2) Industry COJ use reduction — MCA industry has structurally reduced COJ use following the restriction, with many MCA funders eliminating COJ provisions from contract structure; (3) Alternative collection procedures — MCA funders have developed alternative collection procedures including traditional collection litigation, UCC enforcement of secured interests, and aggressive payment plan negotiation; (4) State-by-state COJ framework variation — other states have COJ frameworks ranging from full COJ availability (limited number of states) to no COJ availability (majority of states); the state-by-state framework affects COJ enforceability based on merchant state of residence; (5) Industry trade association guidance — Small Business Finance Association and Innovative Lending Platform Association have developed industry best practices regarding COJ use including transparency, narrow application, and procedural fairness; (6) CFPB scrutiny of COJ use — CFPB has surfaced COJ use in small business lending as area of regulatory attention; future regulatory developments may further restrict COJ availability; (7) Merchant due diligence — merchants should review COJ provisions in contract documents before execution and understand COJ enforcement implications; (8) Funder selection considerations — funders without COJ provisions provide structural advantage for merchants prioritizing standard collection procedures with merchant defense opportunity; (9) State law evolution — additional states may develop COJ restrictions following New York's framework; monitor state COJ framework evolution for ongoing impact assessment; (10) Industry COJ trend — MCA industry trend is toward reduced COJ use with continued industry adaptation to state regulatory frameworks. For merchants the structural rule: review COJ provisions in contract documents; prefer funders without COJ provisions when possible; understand state COJ framework applicability based on merchant state of residence.

Why do bank-partner LOC contracts typically not include COJ clauses while some MCA contracts historically did?

Bank-partner LOC contracts typically do not include confession of judgment (COJ) clauses while some MCA contracts historically did as of 2026-06-29 because of structural differences in regulatory framework, collection infrastructure, and historical industry practice. The realistic structural difference framework: (1) Bank regulatory framework — bank-partner programs operate under federal banking law with bank regulator oversight; bank regulators (FDIC, OCC, Federal Reserve) have historically not used COJ provisions in standard bank lending contracts as part of bank-grade lending practice. The bank regulatory framework influences bank-partner program contract structure to typically avoid COJ provisions. (2) Bank collection infrastructure — banks have established collection infrastructure relying on standard collection procedures including collection litigation, UCC enforcement of secured interests, and structured collection escalation. The collection infrastructure supports effective collection without COJ provisions. (3) MCA industry historical practice — MCA industry historically developed with COJ provisions as standard contract structure component; the historical practice reflected MCA industry origin outside traditional banking framework and MCA collection efficiency optimization through pre-authorized judgment structure. (4) 2019 New York restriction impact — 2019 New York COJ restriction (CPLR Section 3218(b)) materially reduced MCA industry COJ use; many MCA funders eliminated COJ provisions from contract structure following the restriction; the structural shift continues across MCA industry. (5) Alternative collection procedures development — MCA industry developed alternative collection procedures including traditional collection litigation, UCC enforcement, and structured payment plan negotiation reducing reliance on COJ structure. (6) Industry trade association guidance — Small Business Finance Association and Innovative Lending Platform Association have developed industry best practices supporting reduced COJ use and structured collection procedures. (7) State-by-state COJ framework — most states do not provide COJ availability or limit COJ to narrow circumstances; the state-by-state framework affects COJ practical availability for collection. (8) CFPB regulatory attention — CFPB has surfaced COJ use in small business lending as area of regulatory attention; the regulatory attention influences MCA industry trend toward reduced COJ use. (9) Merchant complaint patterns — historical merchant complaints regarding COJ use (default judgment without defense opportunity, COJ enforcement in jurisdictions without merchant connection) influenced industry trend toward reduced COJ use. (10) Industry COJ trend — MCA industry trend is toward elimination of COJ provisions consistent with bank-partner LOC practice; the trend supports structural simplicity and merchant protection alignment. For merchants the structural rule: bank-partner LOC structures provide structural advantage through typical no-COJ structure; direct-licensed MCA structures vary in COJ use with industry trend toward COJ elimination; review COJ provisions in contract documents; prefer funders without COJ provisions when possible; understand state COJ framework applicability.

Which is right for a 18-month TIB business doing $40K/mo with 640 FICO prioritizing no COJ clause and standard collection procedures with merchant defense opportunity?

Bluevine LOC structurally primary for this file as of 2026-06-29 IF the merchant qualifies for Bluevine's underwriting box (640 FICO above 625 floor; 18 months TIB above 12-month floor; $40K/mo revenue above $10K floor — file qualifies). Expected Bluevine LOC offer at 640 FICO and $40K/mo revenue: $30K – $60K credit line at APR 17 – 25%. No COJ structural advantage: Bluevine bank-partner LOC contract through Celtic Bank typically does not include COJ clauses; collection procedures rely on standard collection infrastructure with merchant defense opportunity through traditional collection litigation framework. Compare to Credibly MCA structure: contract may include COJ clauses depending on specific MCA product structure (verify specific offer for COJ structure); capital access available at 550+ FICO floor (more inclusive underwriting) but with potential COJ clause as structural trade-off. Parallel approach: (1) pursue Bluevine LOC as primary no-COJ capital infrastructure; (2) pursue American Express Business Blueprint as additional bank-partner LOC alternative with typical no-COJ structure; (3) pursue traditional commercial bank LOC if relationship supports — bank LOCs structurally avoid COJ provisions; (4) pursue OnDeck term loan as parallel bank-partner alternative through Celtic Bank with typical no-COJ structure for term loan product; (5) pursue Credibly MCA only if no-COJ alternatives don't fit operational needs — verify specific Credibly MCA product COJ structure during contract review and negotiate COJ clause removal if available. The realistic recommendation: pursue Bluevine LOC as primary no-COJ capital; pursue American Express Business Blueprint and traditional commercial banking for additional no-COJ alternatives; pursue OnDeck as no-COJ term loan alternative if term loan structure preferred; consider Credibly MCA only as fallback with explicit COJ clause review during contract negotiation; structure capital relationships with explicit alignment to no-COJ preference and standard collection procedures access.