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HB Funding and small business finance issues

Small businesses often need short term cash flow assistance, but many do not qualify for conventional bank loans. One option used by many small businesses is sale of receivables. HB Funding is a financial institution that provides small business financing structured as sale of receivables.

However, recently the bankruptcy court for the Northern District of California ruled that the standard sale of receivable contract used by HB Funding contains at least two unenforceable clauses. Specifically, the critical clause that purported to transfer the receivables to HB Funding was found to be void. Similarly, the clause that purported to impose a trust on all receivables of the debtor was found void. After the court’s favorable ruling, our law firm has filed a cross-complaint against HB Funding. We are seeking to cancel or rewrite the contract, and to recover damages for receivables that were improperly taken by HB Funding.

Are you a small business that has worked with HB Funding to supplement short term cash flow issues? Did the contract you sign contain language regarding the sale of receivables or the formation of trust? Are the fees charged by HB Funding choking your small business? Please feel free to contact Fuller Law Firm via online form. We may be able to invalidate those clauses and maybe even cancel the exorbitant (and possibly illegal) fees and costs charged by HB Funding.

Contact The Fuller Law Firm

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