• MyPillow and Mike Lindell say in a lawsuit that they were deceived by a corporate payday lender.

• The lawsuit says MyPillow, in “capital distress,” borrowed $1.6 million at an annual interest rate of 409%.

• Lindell said he has no money and at least three MyPillow loans ended up in court.

Mike Lindell, the owner of MyPillow, says his company was tricked into borrowing $1.6 million at a 409% annual interest rate, the latest sign of financial distress for the right-wing pillow seller.

Lindell, MyPillow and 18 other companies allege that Cobalt Funding Solutions and another company involved in the loan, Streamline Advance, participated in the extortion by providing a high-interest merchant cash advance – essentially a short-term business loan.

The lawsuit alleges that Cobalt, Streamline and two men named as defendants “exploited” MyPillow, “a cash-strapped company that needed funds quickly.” It adds that the September agreement to borrow nearly $1.6 million came at MyPillow’s expense and risked the company’s ruin.

Law.com first reported the lawsuit on Tuesday.

It’s at least the third case involving MyPillow and merchant cash advances filed in recent months. In October, a company called Lifetime Funding said Lindell and his companies had defaulted on a $600,000 advance barely a month after taking out a loan. About a week later, another company, Shine Capital Group, filed a lawsuit alleging it defaulted on a $2 million deal signed in July.

Both cases are pending in New York. MyPillow moved to dismiss the Lifetime case on the grounds that the deal’s interest rate was so high that it violated state law.

MyPillow and Lindell have been fighting for years. They borrowed $10 million in 2022 and were fired from lawyers after they couldn’t pay their legal bills. Earlier this year, Lindell told NBC News he had no money and relied on his house and truck.

The use of merchant cash advances, typically used by struggling companies with no other options, is a sign that the situation has worsened.

Lindell has also been sued multiple times in connection with his political claims. He has insisted for years that the 2020 election was stolen from Donald Trump and owes more than $5 million to a man who won his “Prove Mike Was Wrong” contest by proving that his supposed evidence, that the election was stolen actually proves nothing.

Lindell, Streamline and Cobalt did not immediately respond to requests for comment.

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