Are you a small business owner in Long Beach, California drowning in merchant cash advance (MCA) debt? You‘re not alone. Many entrepreneurs turn to MCAs as a quick source of capital, only to find themselves trapped in a cycle of sky-high payments and aggressive collection tactics. But there’s hope. At DelanceyStreet.com, we specialize in defending merchants against predatory MCA practices and lawsuits. Our experienced Long Beach MCA defense attorneys are here to fight for your rights and help you regain control of your business finances.
Understanding Merchant Cash Advances in California
Merchant cash advances operate in a legal gray area. They’re not technically loans, which allows MCA companies to skirt usury laws and charge exorbitant fees. However, California has taken steps to regulate the industry with SB 1235, which requires certain disclosures from MCA providers.Here’s what you need to know about MCAs in California:
- SB 1235 disclosure requirements: MCA funders must provide clear information on fees, repayment terms, and the annualized cost of capital.
- Not subject to usury laws: Because MCAs are considered “purchases” of future receivables rather than loans, traditional interest rate caps don’t apply.
- Daily or weekly ACH debits: Most MCAs are repaid through automatic withdrawals from your business bank account, often on a daily basis.
- Personal guarantees: Many MCA contracts include personal liability for business owners.
Understanding these key points is crucial for mounting an effective defense against MCA lawsuits or negotiating better terms. Our Long Beach MCA attorneys are well-versed in the nuances of California MCA law and can help you navigate this complex landscape.
Common MCA Defense Strategies in Long Beach
When facing an MCA lawsuit, it’s critical to work with an experienced defense attorney who understands the unique aspects of these cases. At DelanceyStreet.com, we employ a range of proven strategies to protect our Long Beach clients:
- Challenging the contract’s validity: We scrutinize MCA agreements for potential violations of SB 1235 disclosure requirements or other legal issues that could render the contract unenforceable.
- Arguing usury: While MCAs aren’t technically loans, we may be able to argue that the arrangement is a de facto loan with usurious interest rates, especially if the funder exerted significant control over your business operations.
- Disputing personal liability: If you signed a personal guarantee, we’ll explore options to limit or eliminate your personal exposure.
- Negotiating settlements: Often, we can negotiate more favorable repayment terms or significant reductions in the amount owed.
- Asserting affirmative defenses: Depending on the circumstances, we may argue fraud, duress, or unconscionability to invalidate the MCA agreement.
Remember, every case is unique. Our Long Beach MCA defense lawyers will carefully analyze your situation to develop a tailored strategy that best protects your interests.
The Impact of SB 1235 on MCA Defense in Long Beach
California’s SB 1235, enacted in 2018, has significantly changed the landscape for MCA defense in Long Beach and throughout the state. This groundbreaking legislation requires commercial financing providers, including MCA companies, to disclose key information to borrowers. Here‘s how SB 1235 can strengthen your defense:
- Mandatory APR disclosure: MCA funders must now provide an annualized percentage rate (APR), making it easier to compare costs with traditional financing options.
- Clear repayment terms: The law requires disclosure of the total amount of funds provided and the total dollar cost of the financing.
- Prepayment policies: Funders must explain any prepayment penalties or fees.
- Frequency of payments: The schedule and frequency of payments must be clearly stated.
If your MCA provider failed to comply with these requirements, it could provide grounds for challenging the validity of the agreement. Our Long Beach MCA defense attorneys are well-versed in leveraging SB 1235 violations to protect our clients’ interests.
Why Choose DelanceyStreet.com for Your Long Beach MCA Defense?
When you’re facing an MCA lawsuit or struggling with overwhelming MCA debt, you need a legal team with specific expertise in this niche area of law. Here‘s why Long Beach merchants trust DelanceyStreet.com:
- Focused expertise: We concentrate exclusively on MCA defense, giving us unparalleled insight into the latest industry trends and legal strategies.
- Track record of success: We’ve helped numerous Long Beach businesses reduce or eliminate their MCA debt through negotiation and litigation.
- Comprehensive approach: We don’t just fight lawsuits – we work to restructure your business finances and prevent future issues.
- Client-centered service: We understand the stress you’re under and provide compassionate, responsive representation every step of the way.
- Deep understanding of California law: Our attorneys are well-versed in SB 1235 and other state-specific regulations that impact MCA cases.
Don’t let predatory MCA practices threaten your Long Beach business. Contact DelanceyStreet.com today for a free consultation with our experienced MCA defense lawyers. We’ll review your case, explain your options, and develop a strategy to protect your business and personal assets.