The business capital landscape isn’t just changing—it’s being restructured from the inside out.

In the past 60 days alone, we’ve seen:

• A major IRS ruling reshape how employee benefit programs are taxed
• At least three fintech lenders either collapse or freeze accounts
• Multiple class-action lawsuits against Merchant Cash Advance (MCA) lenders for deceptive practices

If you’re a business owner, you don’t just need funding—you need to understand the system you’re navigating. This monthly roundup gives you the real news, decoded, with action steps.

Let’s get into it.

1. IRS 2024–2025 Wellness Ruling: New Savings for Employers and Contractors

In April 2024, the IRS issued a major clarification under Sections 105, 106, 125, and 213(d) of the tax code.

For employers with W2 staff, this means:

• You can now legally increase take-home pay and reduce taxable income by enrolling employees in a tax-advantaged wellness program
• These programs are 100% compliant, backed by federal guidelines, and do not require health insurance to qualify
• Employers with 6–25,000 employees are now saving between $500–$1,200 per employee annually

This matters for one simple reason: If you’re spending money on payroll and not leveraging this ruling, you’re losing money every month.

And if you’re a 1099 contractor? Similar benefits may be available through self-funded reimbursement strategies—more on that soon.

2. Fintech Freeze: Square, Kabbage, and the Fragility of “Easy Money”

Several major fintech lenders have made quiet moves that shook the small business ecosystem:

• Kabbage officially shut down its lending arm, leaving thousands of borrowers in limbo
• Square (Block Inc.) has frozen or limited thousands of merchant accounts pending manual review
• Bluevine has tightened underwriting dramatically and is no longer offering flexible lines to lower-revenue businesses

Why does this matter?

Because many business owners rely on these platforms as their bank, not realizing how vulnerable that makes them to unannounced freezes.

We’ve seen clients have their entire revenue flow halted, with no recourse except to wait for a compliance team that doesn’t answer emails.

Your action plan:

• Diversify your banking relationships: have at least two business checking accounts
• Keep liquidity off-platform—don’t let Stripe, PayPal, or Square hold your entire reserve
• Begin building bankable business credit under your EIN

3. MCA Crackdowns and Class-Action Lawsuits: The Beginning of the End?

Merchant Cash Advances are under a magnifying glass right now.

In New York, Illinois, and California, lawsuits are being filed every week. Common allegations include:

• Deceptive contracts disguised as “sales” but structured like loans
• Daily payment structures violating state lending limits
• Predatory stacking, often without client consent

Some lenders are already losing in court, and others are exiting the market quietly.

Here’s what you need to know:

• If you’re currently paying an MCA, request your contract and check if there’s a confession of judgment clause (those are often unenforceable now)
• You may qualify for settlement, restructuring, or full contract cancellation if your agreement violated local lending laws
• MCA lenders are required to report correctly on your business credit—many don’t, and this opens legal leverage

WaterWorks Action Corner: What You Should Do Right Now

1. Pull your Tri-Merge Credit Report (the same one underwriters see)

→ We partner with CreditDyno to give you private access without selling your data

2. Submit your last 4 months of business bank statements

→ We’ll review for stacking, negative patterns, or opportunities to consolidate

3. Join the conversation in our blog community

→ Comment below: Are you seeing funding dry up? Did you get hit with a sudden account freeze? Let’s learn from each other.

We don’t have all the answers. But collectively? We have enough good answers to win the game—without begging for capital or playing by broken rules.

Subscribe for next month’s update, and stay ahead of the curve.

If your business is ready for a smarter structure, our team can help. Not just with funding—but with protection, tax benefits, and long-term strategy.