Are you a small business owner who has taken out a merchant cash advance (MCA) and now finds yourself struggling to keep up with the high daily or weekly payments? You’re not alone. Many entrepreneurs turn to MCAs as a quick source of funding, only to realize later that the terms are often predatory and can put their business at risk. That’s where our merchant cash advance defense lawyers come in. At Delancey Street, we specialize in helping businesses navigate the complex world of MCAs and protect their interests.
What is a Merchant Cash Advance?
A merchant cash advance is a type of financing where a business sells a portion of its future receivables in exchange for an upfront sum of money. Unlike traditional loans, MCAs are not subject to the same regulations and often come with high fees and interest rates disguised as “factor rates.” This can make them incredibly expensive and difficult to pay back, especially for businesses with fluctuating revenue.One of the biggest dangers of MCAs is that they are structured as a purchase of future receivables rather than a loan. This means that they are not subject to usury laws that cap interest rates. As a result, the effective APR on an MCA can easily exceed 100% or even 200%. This can quickly put a business in a debt spiral as they struggle to keep up with the daily or weekly payments.
The Importance of Legal Representation
If your business is struggling to pay back an MCA, it’s essential to seek legal representation as soon as possible. Merchant cash advance companies are notorious for their aggressive collection tactics and will not hesitate to file a lawsuit if you default on your payments. They may even try to seize your business assets or go after your personal assets if you provided a personal guarantee.That’s where our merchant cash advance defense lawyers come in. We have extensive experience representing businesses in MCA disputes and know how to negotiate with lenders to reach a favorable resolution. We can review your MCA agreement to identify any potential legal defenses, such as violations of state usury laws or unfair and deceptive business practices.In some cases, we may be able to argue that the MCA was actually a disguised loan and should be subject to usury laws. This can significantly reduce the amount you owe and give you breathing room to get your business back on track. We can also defend against any lawsuits filed by the MCA company and work to reach a settlement that protects your interests.
Recent Changes in New York Law
New York has long been a hub for the merchant cash advance industry, with many lenders based in the state. However, recent changes in New York law have provided some much-needed protections for small businesses.In 2020, New York passed S.B. 5470, which requires MCA providers to make certain disclosures to borrowers and prohibits some of the most egregious practices in the industry. For example, MCA providers must now disclose the total cost of the advance, including all fees and charges, as well as the effective APR. They are also prohibited from requiring businesses to sign a confession of judgment, which allows the lender to seize assets without going through the court system.While S.B. 5470 is a step in the right direction, it’s important to note that it does not cap interest rates or fees on MCAs. This means that they can still be incredibly expensive and risky for businesses. That’s why it’s so important to have an experienced merchant cash advance defense lawyer on your side who can help you navigate the complexities of MCAs and protect your rights.
How Our Merchant Cash Advance Defense Lawyers Can Help
At Delancey Street, our merchant cash advance defense lawyers have the knowledge and experience to help you find a solution to your MCA troubles. We understand the stress and anxiety that comes with being unable to pay back an advance, and we’re here to help you every step of the way.Here are just a few of the ways we can assist you:
- Reviewing your MCA agreement to identify any potential legal defenses
- Negotiating with the MCA company to reach a favorable settlement
- Defending against any lawsuits filed by the MCA company
- Advising you on your options for restructuring or consolidating your debt
- Helping you develop a plan to get your business back on track
We know that every situation is unique, which is why we take a personalized approach to each case. We’ll work closely with you to understand your specific needs and goals and develop a strategy tailored to your business.
Don’t Wait Until It’s Too Late
If you’re struggling to pay back a merchant cash advance, don’t wait until it’s too late to seek help. The longer you wait, the more difficult it can be to find a solution. Our merchant cash advance defense lawyers are here to help you protect your business and find a way forward.We offer free consultations, so you have nothing to lose by reaching out to us. We’ll review your case and advise you on your options, so you can make an informed decision about how to proceed. And if you do decide to work with us, you can rest assured that you’ll have a dedicated team of experienced attorneys fighting for you every step of the way.
Contact Us Today
If you’re ready to take control of your merchant cash advance debt and protect your business, contact us today. Our merchant cash advance defense lawyers are ready to help you find a solution and get back on the path to success. Don’t let predatory lending practices put your business at risk – let us fight for you.