Jacksonville, FL Merchant Cash Advance Defense Lawyers
Introduction
If you’re a small business owner in Jacksonville, FL, struggling with the weight of a Merchant Cash Advance (MCA), you’re not alone. Many businesses find themselves caught in the web of these seemingly helpful but often predatory financial products. At Delancey Street, we understand the stress and uncertainty that comes with MCA debt. Our team of experienced Merchant Cash Advance Defense Lawyers is here to help you navigate these troubled waters and reclaim your financial stability.
Understanding Merchant Cash Advances
Merchant Cash Advances can be a lifeline for businesses in need of quick cash. However, they often come with strings attached that can strangle your business’s cash flow. Unlike traditional loans, MCAs provide an upfront sum in exchange for a percentage of future sales, plus hefty fees. This might sound manageable, but the reality can be far more daunting.
How MCAs Work
When you take out an MCA, the lender gives you a lump sum of money. In return, they take a cut of your daily or weekly sales until the advance, plus fees, is paid off. This can severely impact your cash flow, making it difficult to cover other essential expenses. For example, if you receive $50,000 with a factor rate of 1.3, you’ll end up paying $65,000—$15,000 more than you borrowed.
Legal Landscape in Florida
Florida’s legal stance on Merchant Cash Advances is nuanced. A significant ruling in Craton Entertainment, LLC v. Merchant Capital Group, LLC clarified that MCAs are not considered loans and, therefore, are not subject to the state’s criminal usury laws. This means MCA providers can charge exorbitant rates, often leading businesses into a cycle of debt.
Key Legal Citations
- Craton Entertainment, LLC v. Merchant Capital Group, LLC: This case affirmed that MCAs are purchase and sale agreements, not loans, thus not subject to usury laws.
- FTC v. Jonathan Braun: This case resulted in a permanent ban against an MCA provider for deceptive practices, highlighting the potential for abuse in the industry.
Common Issues with MCAs
MCAs can lead to several legal and financial issues, including:
- Exorbitant Fees: Factor rates can translate into APRs of 350% or more, making it nearly impossible to repay the advance without severe financial strain.
- Daily Withdrawals: The requirement for daily or weekly payments can cripple your cash flow, leaving you unable to meet other financial obligations.
- Confessions of Judgment: Some MCA agreements require you to sign a confession of judgment, allowing the lender to obtain a court judgment against you without a trial if you default.
How We Can Help
At Delancey Street, we specialize in defending businesses against the predatory practices of MCA providers. Our team is well-versed in the legal intricacies of these agreements and can help you navigate the complexities of MCA debt.
Our Services
- Debt Negotiation: We negotiate with MCA providers to reduce the amount you owe, potentially saving your business thousands of dollars.
- Litigation Defense: If you’re facing a lawsuit from an MCA provider, our experienced attorneys will defend your rights in court.
- UCC Lien Removal: We assist in removing Uniform Commercial Code (UCC) liens placed on your business assets by MCA providers.
Case Studies
Case Study 1: Retail Store in Jacksonville
A local retail store found itself drowning in debt after taking out multiple MCAs. The daily withdrawals left the owner unable to pay suppliers, and the business was on the brink of closure. We stepped in, negotiated with the MCA providers, and managed to reduce the debt by 40%. The store is now thriving, free from the burden of predatory lending.
Case Study 2: Jacksonville Restaurant
A restaurant owner in Jacksonville took out an MCA to cover renovation costs. The high factor rate and daily payments soon became unmanageable. Our team filed a lawsuit challenging the validity of the MCA agreement, arguing it was a disguised loan subject to usury laws. The court ruled in our favor, significantly reducing the amount owed.
Conclusion
If you’re struggling with Merchant Cash Advance debt, don’t wait until it’s too late. Contact Delancey Street today for a free consultation. Our team of expert Merchant Cash Advance Defense Lawyers in Jacksonville, FL, is ready to help you reclaim your financial freedom. Call us now or leave a comment below to get started on the path to financial recovery. Ready to take the next step? Reach out to us at Delancey Street, and let us help you navigate the complexities of MCA debt. Your business deserves a fresh start, and we’re here to make that happen.