Are you a small business owner in Columbus, Ohio struggling with merchant cash advance (MCA) debt? You‘re not alone. Many entrepreneurs turn to MCAs when they need quick cash, only to find themselves trapped in a cycle of crushing daily payments and sky-high interest rates.But there’s hope! At DelanceyStreet, we’ve helped countless Ohio business owners just like you break free from predatory MCA agreements and get their companies back on solid financial footing. Our experienced Columbus MCA defense attorneys know all the tricks and tactics used by cash advance companies – and we know how to fight back.In this comprehensive guide, we’ll walk you through everything you need to know about merchant cash advances in Ohio, your legal rights, and how our team can help you escape the MCA trap once and for all. Let’s dive in!
What is a Merchant Cash Advance?
Before we get into the nitty gritty legal details, let‘s start with the basics. A merchant cash advance is a type of alternative business financing that provides a lump sum of cash upfront in exchange for a portion of your future credit card sales.Here’s how a typical MCA works:
- You apply to an MCA company when you need quick capital for your business
- If approved, they give you a lump sum payment (usually between $5,000 – $500,000)
- In exchange, you agree to pay back the advance plus fees through daily or weekly payments, typically 10-20% of your credit/debit card sales
- Payments continue until you’ve repaid the full amount plus fees
Sounds simple enough, right? Well, not so fast. There are some major pitfalls to watch out for with MCAs:
- Extremely high costs: The effective APR on an MCA can be 50%, 100%, or even 200%+ in some cases
- Daily/weekly payments: Frequent payments can seriously disrupt your cash flow
- Confusing terms: MCA contracts are often filled with complex legal jargon
- No federal regulation: MCAs fall into a legal gray area with little oversight
- Aggressive collection tactics: Some MCA companies use intimidation to collect
That’s why it’s so important to have an experienced MCA defense lawyer on your side if you’re struggling with cash advance debt. We know how to analyze these complex agreements and fight back against unfair practices.
Are Merchant Cash Advances Legal in Ohio?
This is one of the most common questions we get from our Columbus clients. The short answer is: it’s complicated.Merchant cash advances exist in a bit of a legal gray area. They are not technically considered “loans” under Ohio law, which allows MCA companies to skirt usury laws and charge extremely high interest rates.However, that doesn’t mean MCA companies have free rein to do whatever they want. There are still laws and regulations that apply, including:
- Ohio Revised Code Section 1321.01: Defines “loan” and regulates consumer lending
- Ohio Revised Code Section 1315.21: Governs check-cashing businesses
- Ohio Revised Code Section 1349.55: Prohibits unfair or deceptive practices in consumer transactions
Our Columbus MCA defense attorneys are well-versed in all the relevant Ohio statutes and case law surrounding merchant cash advances. We know how to leverage these laws to protect your rights and fight back against predatory practices.Some key legal issues we look at when reviewing MCA agreements include:
- Was the contract clearly explained or were key terms hidden?
- Does the effective interest rate violate Ohio’s usury laws?
- Were any deceptive or unfair practices used in marketing the MCA?
- Is the MCA company properly licensed to do business in Ohio?
- Do the collection practices violate any state or federal laws?
Every case is unique, which is why it’s so important to have an experienced lawyer review your specific situation. We offer free consultations to all potential clients – give us a call today to discuss your case!
Common Merchant Cash Advance Scams to Watch Out For
Unfortunately, the MCA industry is rife with scams and predatory practices. Here are some of the most common tactics we see unscrupulous companies use to take advantage of small business owners:
1. Bait and Switch
You’re promised one set of terms, but the actual contract contains much higher fees or stricter repayment terms. Always read the fine print!
2. Stacking
Multiple MCAs are taken out on top of each other, creating a crushing debt burden. This is often pushed by brokers looking to earn more commissions.
3. Confession of Judgment
These clauses allow the MCA company to obtain a judgment against you without going to court. They‘re illegal in some states but still used in Ohio.
4. Personal Guarantee Abuse
Your personal assets may be at risk even if you formed an LLC or corporation. We can help protect you.
5. Fake Defaults
Some companies will claim you’ve defaulted on bogus grounds just to charge extra fees or seize assets.If you’ve fallen victim to any of these scams, don’t panic. Our experienced Columbus MCA defense lawyers know how to fight back and protect your rights. We’ve helped countless Ohio business owners escape from predatory agreements and get the debt relief they need.
How Our Columbus MCA Defense Attorneys Can Help
Dealing with merchant cash advance debt can feel overwhelming, but you don’t have to face it alone. Our team of experienced Columbus MCA defense lawyers is here to help you every step of the way. Here’s what we can do for you:
Comprehensive Contract Review
We’ll carefully analyze your MCA agreement to identify any unfair or illegal terms. Our attorneys know all the tricks and loopholes these companies use.
Negotiate with MCA Companies
In many cases, we can negotiate directly with the MCA company to reduce your debt, lower interest rates, or extend repayment terms. We’re not afraid to play hardball!
Defend Against Lawsuits
If you’re facing legal action from an MCA company, we’ll mount an aggressive defense to protect your assets and your business.
Explore Debt Relief Options
From debt consolidation to bankruptcy, we’ll help you understand all your options for getting out of MCA debt and back on solid financial footing.
Stop Harassing Collection Calls
We can put an end to those constant calls and threats from MCA collectors. Let us deal with them so you can focus on running your business.
File Counterclaims When Appropriate
In some cases, we may be able to file a lawsuit against the MCA company for unfair or deceptive practices.Don’t wait until it’s too late – the sooner you get experienced legal help, the more options you’ll have. Call us today for a free, no-obligation consultation with one of our Columbus MCA defense attorneys.