Reliant Funding, the San Diego-based merchant cash advance company founded in 2008, has been named in a Reliant Funding lawsuit over alleged illegal robocalls, has drawn consumer complaints and a government fine, and routinely files its own lawsuits against small businesses that default on its financing agreements.1PR Newswire. Reliant Funding Celebrates 10 Years of Serving America’s Small Businesses
The Friedman Robocall Class Action
In February 2017, Todd Friedman filed a proposed class action against Reliant Services Group, LLC (doing business as Reliant Funding) in the U.S. District Court for the Southern District of California, case number 3:17-cv-00331-JM-BGS. The complaint alleged violations of the Telephone Consumer Protection Act, claiming Reliant placed unsolicited marketing calls to consumer cell phones using an automatic telephone dialing system.2ClassAction.org. Lawsuit: Reliant Funding Illegally Robocalled Consumers
Friedman said he began receiving autodialed calls in late January 2017 pitching business capital loans. Each call allegedly opened with a stretch of dead air, which the complaint described as a signature of predictive dialing equipment. The suit sought $500 per negligent violation and up to $1,500 per knowing or willful violation, plus an injunction barring the practice.3ClassAction.org. Friedman v. Reliant Funding, Case No. 3:17-cv-00331-JM-BGS
The available record consists of the initial complaint. Public information does not confirm whether the case settled, was dismissed, or went to verdict.3ClassAction.org. Friedman v. Reliant Funding, Case No. 3:17-cv-00331-JM-BGS
When Reliant Funding Sues Borrowers
Reliant Funding also sits on the plaintiff’s side of the docket, pursuing small businesses that stop paying on their merchant cash advance agreements. The collection tools can escalate fast.
The most aggressive is the confession of judgment, a provision borrowers agree to inside the financing contract. It lets Reliant obtain a court judgment without a trial. Once entered, the judgment can be used to freeze bank accounts, levy funds, and seize other assets, sometimes with no further notice to the debtor. Defense attorneys often attack these judgments on the grounds that the borrower was never properly served.
Reliant also files UCC liens against a business’s receivables, which lets the company notify a borrower’s customers or payment processors and redirect incoming payments. And because owners typically sign personal guarantees as part of the original agreement, Reliant can pursue personal wages and personal assets beyond the business itself.
Common defenses include motions to vacate default judgments based on improper service, negotiated settlements for less than the full balance, restructured repayment plans, and, as a last resort, bankruptcy.
Why the “Not a Loan” Structure Matters
Whether Reliant’s product is a loan or something else drives much of the legal fight around it. Reliant characterizes its financing as a purchase of future receivables: the company buys a portion of a small business’s future revenue at a discount in exchange for an upfront lump sum.4California DFPI. Reliant Services Group LLC Comment Letter, April 26, 2021
The distinction carries real weight. If a transaction is a loan, it falls under state usury caps, truth-in-lending disclosure rules, and other consumer protections. If it is a sale of receivables, most of those rules do not apply. Reliant’s standard agreement states in capital letters “THIS IS NOT A LOAN” and argues that laws governing loans “are not applicable.”5SEC. Future Receivables Sale Agreement
In practice, the agreement takes a first-priority security interest in the merchant’s assets under Article 9 of the Uniform Commercial Code, covering accounts receivable, inventory, and equipment. Owners who sign as “Principals” guarantee the agreement’s performance and become personally liable if they cause or fail to prevent a breach. The contracts also typically include mandatory binding arbitration and a Florida forum selection clause, which keeps disputes out of public courts in a borrower’s home state.5SEC. Future Receivables Sale Agreement
Complaints and a $250,000 Fine
Reliant Funding has 91 complaints on file with the Better Business Bureau. Recurring grievances include aggressive telemarketing that continues after requests to stop, deceptive tactics such as mailing fake credit cards to prompt callbacks, and advertising products like SBA loans and lines of credit when the company only actually offers merchant cash advances. Borrowers have also said Reliant does not disclose factor rates, equivalent APRs, or total repayment amounts until after an application is completed and bank statements submitted. The automated daily or weekly debit structure has drawn criticism as a cash-flow strain, compounded by a $50 fee for every bounced payment.6StartupOwl. Reliant Funding
The company has also paid a $250,000 government fine related to “false, misleading, or deceptive” business conduct. The source does not identify which agency imposed the fine or the specific conduct at issue.6StartupOwl. Reliant Funding
Don’t Confuse Reliant Funding with Reliant Holdings
Searches for Reliant Funding lawsuits often surface results about a different company, Reliant Holdings, Inc., which does business as Horizon Card Services. They are not related. Reliant Holdings was sued by the CFPB in September 2024 in the Western District of Pennsylvania over the alleged deceptive marketing of high-fee credit cards; the CFPB voluntarily dismissed that action with prejudice in April 2025.7Consumer Financial Protection Bureau. Reliant Holdings Inc. dba Horizon Card Services and Robert Kane Reliant Holdings is led by Robert Kane and has no connection to Reliant Funding or its founder Adam Stettner.