My Pillow CEO Mike Lindell has filed a lawsuit accusing several financing companies of exploiting his business through a high-interest $600,000 loan, alleging the lenders employed “loan sharking” tactics.
An outspoken supporter of Republican presidential nominee and former President Donald Trump, Lindell claims that the cash advance deal with Lifetime Funding, CapSpot Financial and Funderz Group was disguised as a sales contract, effectively operating as an illegal, high-interest loan to skirt New York’s strict usury laws.
According to Lindell’s team, MyPillow urgently needed $600,000 as the company’s financial options had dwindled under the strain of litigation costs, a diminished credit line and retail boycotts. In this context, Lindell’s legal team argues, the merchant cash advance (MCA) companies exploited the situation by imposing strict terms, including access to employee records and restrictions on pursuing other financing sources.
Newsweek reached out to Lifetime Funding, CapSpot Financial and Funderz for comment on Tuesday.
Details in the complaint show that the financing agreement required daily payments of $16,800, amounting to $840,000 in total. This pushed the effective interest rate to 368 percent—or 441 percent with additional fees—well above the legal limit set in New York.
Lindell contends he was drawn into the deal by a “bait and switch.” His attorney claims that Lifetime offered an additional real estate loan for two Minnesota properties as an incentive for Lindell to accept the cash advance. However, after MyPillow received the $600,000 advance, “Lifetime refused to honor its commitment to make the real estate loan,” leaving the company entangled in what Lindell’s team describes as an “exploitative” financing arrangement.
My Pillow CEO Mike Lindell speaks at a Trump rally on July 27 in St. Cloud, Minnesota. Lindell has filed a lawsuit accusing several financing companies of exploiting his business through a high-interest $600,000 loan.
Stephen Maturen/Getty Images
Framing the MCA companies’ actions as predatory, Lindell’s lawsuit alleges that these companies operated beyond the bounds of lawful financing practices, engaging in what he terms “loan sharking” under a sophisticated façade.
The suit characterizes the MCA industry as “essentially payday lending for businesses,” with contracts that “require unaffordable daily payments they know the debtor is unlikely to be able to repay.” According to Lindell, MCAs commonly target struggling businesses, saddling them with onerous terms and placing them in precarious financial positions.
Seeking to nullify the financing agreement, Lindell’s legal team has invoked the Racketeer Influenced and Corrupt Organizations Act (RICO), arguing that the deal reflects a “pattern of racketeering activity” and should be voided. They are also pursuing compensatory damages to recoup losses and cover legal fees, challenging what they call “grossly inflated rates by hook or by crook.”
MyPillow, known for its popular pillows, mattresses and sleep products, has faced considerable financial strain in recent years, much of it stemming from Lindell’s prominent political stance.
