Introduction
Running a small business in Detroit can be a challenging endeavor. Between managing employees, keeping customers satisfied, and striving to turn a profit, the complexities can quickly become overwhelming. When cash flow issues arise, many business owners turn to merchant cash advances (MCAs) as a lifeline. However, these advances often come with predatory terms, leading to financial distress. That’s where we come in. At Delancey Street, we specialize in defending Detroit business owners against the pitfalls of MCAs. Our experienced team of merchant cash advance defense lawyers is dedicated to helping you regain control of your finances and protect your business.
Understanding Merchant Cash Advances
What is a Merchant Cash Advance?
A merchant cash advance is a type of financing where a business receives a lump sum of cash in exchange for a percentage of future credit card sales. Unlike traditional loans, MCAs are repaid through daily or weekly deductions from the business’s bank account. While this might seem like a quick and easy solution, the reality is often far more complex and perilous.
The Predatory Nature of MCAs
MCAs can be incredibly risky due to their high interest rates and aggressive repayment schedules. It’s not uncommon for the annual percentage rate (APR) on an MCA to exceed 200%, making it nearly impossible for businesses to keep up with payments. When a business falls behind, the consequences can be severe, including lawsuits, asset seizures, and even bankruptcy.
Legal Landscape and Protections
In Michigan, there are currently no specific regulations governing merchant cash advances, leaving business owners vulnerable to predatory practices. However, certain federal laws, such as the Truth in Lending Act (TILA) and the Fair Debt Collection Practices Act, offer some protections. Additionally, usury laws in many states cap maximum allowable interest rates, which can be a critical defense in MCA disputes.
Why You Need a Merchant Cash Advance Defense Lawyer
Negotiating Settlements
One of the primary roles of a merchant cash advance defense lawyer is to negotiate settlements with MCA funders. An experienced attorney can often secure a lump-sum settlement for less than what you owe, providing much-needed relief and allowing you to move forward.
Defending Against Lawsuits
If you’ve defaulted on an MCA and are facing a lawsuit, a defense lawyer can raise various legal defenses to fight the case. For instance, they might argue that the MCA agreement constitutes an illegal loan under state usury laws or that the funder’s collection practices violate federal regulations.
Protecting Your Assets
A skilled attorney can also help protect your personal and business assets from aggressive creditors. This might include advising you on how to shield your home, retirement accounts, and other valuable assets from seizure.
Case Study: Fleetwood Services LLC v. Richmond Capital Group LLC
In the landmark case Fleetwood Services LLC v. Richmond Capital Group LLC, the Second Circuit Court of Appeals affirmed that certain MCA agreements could be considered usurious loans, subject to state usury laws. This case underscores the importance of having knowledgeable legal representation to navigate the complexities of MCA disputes.
Our Approach at Delancey Street
Personalized Legal Strategies
At Delancey Street, we believe that every client’s situation is unique. That’s why we develop personalized legal strategies tailored to your specific needs. Our goal is to provide you with the best possible outcome, whether that means negotiating a settlement, defending against a lawsuit, or restructuring your debt.
Comprehensive Debt Relief Services
Our services go beyond just legal defense. We offer a range of debt relief options, including debt restructuring and settlement. Our team is dedicated to helping you achieve financial freedom and regain control of your business.
Client-Centric Approach
We treat our clients like family, offering empathetic and respectful service at every step. We understand the stress and anxiety that come with financial difficulties, and we’re here to support you through it all.
Transparent and Honest Communication
Transparency is a core value at Delancey Street. We provide clear and honest information about your options and the potential outcomes of your case. Our goal is to empower you to make informed decisions about your financial future.
Conclusion
If you’re a Detroit business owner struggling with a merchant cash advance, don’t wait until it’s too late. Contact us at Delancey Street to speak with one of our experienced merchant cash advance defense lawyers. We’ll work tirelessly to protect your business and help you achieve the financial freedom you deserve. Remember, you don’t have to face this battle alone. We’re here to fight for you every step of the way.