By John Q. Hosedrinker 
MyPillow, facing significant financial difficulties, is suing Cobalt Funding Solutions and Streamline Advance for racketeering, alleging deceptive lending practices. The lawsuit claims MyPillow was tricked into a $1.6 million loan with a 409% annual interest rate, exacerbating the company’s already precarious financial state. This is at least the third lawsuit filed against MyPillow in recent months concerning high-interest merchant cash advances, highlighting the company’s ongoing financial struggles. The company’s legal woes are compounded by previous defaults on similar loans and outstanding debts related to Lindell’s election-related lawsuits.
Read the original article here
MyPillow, the company owned by Mike Lindell, reportedly secured a $1.6 million loan from a payday lender at a staggering 409% annual interest rate. This revelation underscores the significant financial difficulties Lindell and his company are currently facing.
The high-interest loan, described as a merchant cash advance, is detailed in a lawsuit filed by MyPillow. The lawsuit alleges that Cobalt Funding Solutions and Streamline Advance, the companies involved in the loan, engaged in racketeering by taking advantage of MyPillow’s cash-strapped situation. The lawsuit contends that the loan terms were excessively unfavorable and risked the company’s financial ruin.
This isn’t an isolated incident. MyPillow has been entangled in several similar lawsuits recently, concerning defaulted merchant cash advances. One case involves a $600,000 advance from Lifetime Funding, which MyPillow defaulted on just a month after receiving it. Another involves a $2 million default to Shine Capital Group. These cases are pending in New York, with MyPillow arguing in one instance that the interest rate violated state law.
The need to resort to merchant cash advances, a financing option often utilized by businesses with limited other choices, clearly indicates MyPillow’s increasingly precarious financial state. This situation is not new; Lindell has openly discussed his financial struggles, previously stating he was down to his house and truck. In 2022, MyPillow borrowed $10 million and even had to let go of their lawyers due to inability to pay legal fees.
The immense interest rate on the $1.6 million loan—a rate exceeding 400%—highlights the desperation MyPillow found itself in. The company’s financial troubles extend beyond the difficulties in securing traditional loans; Lindell has also faced multiple lawsuits stemming from his controversial political claims, including a substantial debt from a “Prove Mike Wrong” contest.
The high-interest loan situation paints a concerning picture of MyPillow’s financial health. The company’s reliance on such expensive short-term funding, coupled with ongoing legal battles, suggests a significant and potentially unsustainable level of financial strain. The exorbitant interest rate itself raises questions about the ethics and legality of the lending practices involved.
The lawsuit filed by MyPillow alleges predatory lending practices, adding a layer of complexity to the already precarious financial situation. The claim that the lenders “took advantage” of MyPillow’s financial vulnerability raises concerns about responsible lending and the protections afforded to struggling businesses. The outcome of this lawsuit and the other pending cases will significantly impact MyPillow’s future.
It’s worth noting the significant contrast between Lindell’s public persona and the financial struggles facing MyPillow. This contrast raises questions about his business acumen and the long-term sustainability of his company. The incident serves as a cautionary tale about the dangers of high-interest debt and the importance of responsible financial management, even for high-profile individuals.
The situation is far from simple, with multiple factors contributing to MyPillow’s financial woes. While the high-interest loan is a striking example of the company’s challenges, it’s important to consider the broader context of Lindell’s legal battles, political stances, and business decisions that have all likely played a role in the company’s current situation. The long-term consequences for MyPillow remain uncertain, with the outcome of the various lawsuits potentially determining its future.