FTC, Manhattan Prosecutors Probe Costly Small-Business Loans

The Federal Trade Commission has opened an investigation into potentially unfair or deceptive practices in the merchant cash-advance industry, which offers unregulated, high-interest loans to small businesses and has exploded in size over the past decade.

The inquiry, which also includes companies offering other types of small-business financing, is at least the third by government authorities to target the cash-advance industry. The Manhattan district attorney is pursuing a criminal investigation of a group of cash-advance executives, people with knowledge of that effort said. And the New York State attorney general’s office is conducting a civil probe that was first disclosed ...