Mike Lindell, the CEO of My Pillow, has taken legal action against several financing firms, accusing them of exploiting his business with a hefty $600,000 loan that he claims operates under “loan sharking” tactics.
Lindell, a fervent supporter of Donald Trump, asserts that his agreement with Lifetime Funding, CapSpot Financial, and Funderz Group was masked as a sales contract to bypass New York’s stringent usury laws. His legal team argues that this merchant cash advance (MCA) deal capitalized on MyPillow’s dwindling financial options, burdened by legal fees, reduced credit access, and retail boycotts.
The lawsuit indicates that the financing arrangement demanded daily payments of $16,800, totaling $840,000, which translates to an outrageous effective interest rate of 368 percent—or 441 percent when additional fees are included—far exceeding legal limits.
Lindell claims he was misled into the deal through a “bait and switch,” where Lifetime promised a separate real estate loan for two properties but failed to deliver after the $600,000 advance. This left MyPillow in a quite precarious financial situation they label as “exploitative.”
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Lindell’s lawsuit paints the MCA firms as predatory, claiming their practices mirror payday loans for businesses, with contracts that impose harsh daily repayment terms designed to ensnare struggling companies.
He seeks to invalidate the financing agreement under the Racketeer Influenced and Corrupt Organizations Act (RICO), arguing it reveals a “pattern of racketeering activity.” His legal team is also pursuing damages to recover losses and legal expenses, challenging what they view as egregiously high rates achieved through deceptive means.
MyPillow, popular for its sleep products, has faced significant financial challenges in recent years, largely due to Lindell’s outspoken political activities.