Georgia Merchant Cash Advance Defense Lawyers: Protecting Your Business Rights
Are you a Georgia business owner feeling OVERWHELMED by merchant cash advance (MCA) debt? You’re not alone. We’ve seen countless entrepreneurs struggle with predatory lending practices and aggressive collection tactics. But there’s hope! Our team of experienced Georgia merchant cash advance defense lawyers is here to fight for your rights and help you regain control of your financial future.
Understanding Merchant Cash Advances in Georgia
Merchant cash advances have become increasingly popular among small business owners in Georgia looking for quick access to capital. But what exactly are these financial products, and why do they often lead to legal troubles?
MCAs are NOT traditional loans. Instead, they’re considered “purchase and sale” agreements where a company buys a portion of your future credit card sales in exchange for an upfront lump sum. This structure allows MCA providers to sidestep usury laws and charge exorbitant fees that can quickly spiral out of control.
Here’s a breakdown of how MCAs typically work:
- You receive a lump sum payment upfront
- The MCA provider takes a percentage of your daily credit card sales
- Repayment continues until the full amount, plus fees, is paid off
Sounds simple enough, right? WRONG. The devil is in the details, and many Georgia business owners find themselves trapped in a cycle of debt they can’t escape.
The MCA Debt Trap: A Case Study
Let’s look at a hypothetical scenario:
Sarah owns a small bakery in Atlanta. She needs $50,000 for new equipment and turns to an MCA provider. The terms seem reasonable at first: repay $65,000 over 6 months through daily deductions from her credit card sales.
But Sarah’s business experiences a slow month, and she struggles to keep up with the daily payments. The MCA provider increases the percentage they’re taking, further straining her cash flow. Before she knows it, Sarah is taking out additional MCAs just to cover her existing obligations.
This situation is all too common, and it’s why our team of Georgia merchant cash advance defense lawyers is passionate about helping business owners like Sarah break free from the MCA debt cycle.
Legal Challenges to Merchant Cash Advances in Georgia
While MCA providers often claim their products are exempt from usury laws, this argument doesn’t always hold up in court. Our experienced Georgia merchant cash advance defense lawyers have successfully challenged the legality of many MCA agreements based on several key factors:
1. Mischaracterization as “Purchase and Sale” Agreements
MCA providers go to great lengths to avoid their agreements being classified as loans. However, courts have increasingly scrutinized these arrangements and found that many MCAs function as de facto loans, subject to usury laws and other regulations.
In the case of CAN Capital, Inc. v. Smith, the Georgia Court of Appeals held that the substance of the agreement, not just its form, must be considered when determining whether it constitutes a loan [CAN Capital, Inc. v. Smith, 341 Ga. App. 395 (2017)].
2. Unconscionable Terms and Practices
Georgia law protects consumers and businesses from unconscionable contract terms. Our team has successfully argued that many MCA agreements contain provisions that are so one-sided and unfair as to be unenforceable.
Key factors courts consider include:
- Lack of meaningful choice for the borrower
- Unreasonably favorable terms for the MCA provider
- Excessive fees and interest rates
- Deceptive or misleading marketing practices
3. Violations of the Georgia Fair Business Practices Act (FBPA)
The FBPA prohibits unfair or deceptive practices in consumer transactions, which can extend to certain business-to-business dealings. Our Georgia merchant cash advance defense lawyers have leveraged this law to challenge MCA providers engaging in deceptive marketing or unfair collection practices [O.C.G.A. § 10-1-390 et seq.].
4. Improper Use of Confessions of Judgment
Many MCA agreements include confession of judgment clauses, allowing providers to obtain judgments against borrowers without notice or a hearing. While these clauses are enforceable in some states, Georgia law generally prohibits their use in consumer transactions [O.C.G.A. § 13-1-11].Our team has successfully argued that these clauses should be unenforceable in many MCA cases, particularly when the borrower is a small business owner acting in a personal capacity.
Strategies for Defending Against MCA Collections
If you’re facing aggressive collection efforts from an MCA provider, don’t panic! Our Georgia merchant cash advance defense lawyers have a proven track record of helping businesses fight back. Here are some of the strategies we employ:
1. Challenging the Validity of the Agreement
We’ll conduct a thorough review of your MCA agreement to identify any potential legal vulnerabilities. This may include:
- Analyzing the terms for usurious interest rates
- Identifying unconscionable clauses
- Assessing compliance with Georgia’s disclosure requirements
2. Negotiating with MCA Providers
In many cases, we can negotiate more favorable terms with MCA providers, including:
- Reduced payoff amounts
- Extended repayment periods
- Lower daily or weekly payment amounts
Our experienced team knows how to leverage legal arguments and financial realities to bring MCA providers to the negotiating table.
3. Litigation and Arbitration
When negotiations fail, we’re prepared to take your case to court or arbitration. Our Georgia merchant cash advance defense lawyers have a deep understanding of the relevant laws and precedents, allowing us to build strong cases for our clients.
4. Exploring Bankruptcy Options
In some situations, bankruptcy may be the best path forward. While this is often a last resort, it can provide powerful protections against MCA collections and give your business a fresh start.
Why Choose Our Georgia Merchant Cash Advance Defense Lawyers?
At DelanceyStreet.com, we’re not just lawyers – we’re advocates for Georgia’s small business community. When you work with our team, you’ll benefit from:
- Years of Experience: We’ve successfully defended countless businesses against predatory MCA practices.
- Personalized Attention: Your case isn’t just a number to us. We take the time to understand your unique situation and develop tailored strategies.
- Aggressive Representation: We’re not afraid to stand up to MCA providers and their high-powered legal teams.
- Comprehensive Approach: We don’t just address your immediate legal issues – we help you develop a long-term plan for financial stability.
Don’t let MCA debt destroy your business dreams. Contact our Georgia merchant cash advance defense lawyers today for a FREE consultation. Together, we’ll fight for your rights and work towards a brighter financial future.
FAQs: Georgia Merchant Cash Advance Defense
Q: Can I go to jail for not repaying a merchant cash advance?
A: No, you cannot be imprisoned for failing to repay a merchant cash advance. MCAs are considered civil matters, not criminal ones. However, MCA providers may pursue civil legal action against you, which can result in judgments, liens, or asset seizures.
Q: How long do MCA providers have to sue me in Georgia?
A: The statute of limitations for written contracts in Georgia is generally six years [O.C.G.A. § 9-3-24]. However, this period may vary depending on the specific terms of your agreement and the nature of the claim.
Q: Can MCA providers garnish my bank account?
A: Yes, if an MCA provider obtains a judgment against you, they may be able to garnish your bank account or other assets. However, our Georgia merchant cash advance defense lawyers can help you explore options to prevent or challenge garnishments.
Q: What should I do if I receive a lawsuit from an MCA provider?
A: DO NOT IGNORE IT! Failing to respond to a lawsuit can result in a default judgment against you. Contact our experienced Georgia merchant cash advance defense lawyers immediately to discuss your options and develop a response strategy.
Q: Can I negotiate with MCA providers on my own?
A: While it’s possible to negotiate directly with MCA providers, we strongly recommend seeking legal representation. MCA companies have teams of experienced lawyers on their side, and you deserve equal protection. Our Georgia merchant cash advance defense lawyers can level the playing field and help you achieve the best possible outcome.
Don’t face MCA debt alone. Contact our team of Georgia merchant cash advance defense lawyers today for a confidential consultation. We’re here to protect your rights and fight for your financial future!
