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New York State Is Probing Abuses in Small-Business Lending

  • Yellowstone Capital is said to have received subpoena
  • Attorney general is said to focus on cash-advance companies
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Photographer: John Taggart/Bloomberg

New York’s attorney general has opened an investigation into potential abuses by finance firms that offer quick money to small businesses nationwide, according to a person familiar with the probe.

Attorney General Barbara Underwood’s office is looking into whether merchant cash-advance companies engaged in fraud or abused the state court system, said the person, who spoke on the condition of anonymity. Last week the office subpoenaed one of the largest cash-advance companies, Yellowstone Capital LLC, the person said.