Michigan Merchant Cash Advance Defense Lawyers: Your Shield Against Predatory Lending
Are you a small business owner in Michigan drowning in merchant cash advance (MCA) debt? You’re not alone. We’ve seen countless entrepreneurs fall victim to these deceptively simple financial products. But don’t lose hope – our team of experienced Michigan MCA defense lawyers is here to help you fight back and regain control of your business.
What is a Merchant Cash Advance?
Before we dive into the legal nitty-gritty, let’s break down what an MCA actually is. A merchant cash advance is NOT a loan – at least, that’s what MCA providers want you to believe. Instead, it’s technically a purchase of your future receivables.
Here’s how it typically works:
- You receive a lump sum of cash upfront
- In exchange, you agree to repay a larger amount through daily or weekly deductions from your credit card sales
- The repayment continues until the full amount is paid off
Sounds simple enough, right? WRONG. The devil is in the details, and MCAs can quickly become a nightmare for unsuspecting business owners.
The MCA Trap: Why You Need a Defense Lawyer
Many Michigan entrepreneurs turn to MCAs when traditional bank loans aren’t an option. But what seems like a lifeline can quickly turn into a noose. Here’s why:
- Astronomical Interest Rates: While MCA providers claim they’re not charging interest, the effective annual percentage rate (APR) can easily exceed 100% or even 200%!
- Daily Repayments: Unlike traditional loans with monthly payments, MCAs often require daily or weekly repayments. This can strangle your cash flow, making it difficult to cover other expenses.
- Confusing Contracts: MCA agreements are often filled with complex legal jargon designed to confuse and trap you.
- Personal Guarantees: Many MCAs require personal guarantees, putting your personal assets at risk if your business can’t repay.
- Stacking: Some unscrupulous MCA providers encourage taking out multiple advances, creating a debt spiral that’s nearly impossible to escape.
If you’re feeling overwhelmed by your MCA obligations, don’t panic. That’s where we come in. Our team of Michigan MCA defense lawyers has the expertise to help you navigate this complex legal landscape and find a way out.
How Our Michigan MCA Defense Lawyers Can Help
At DelanceyStreet.com, we’ve helped countless Michigan business owners escape the MCA trap. Here’s how we can assist you:
1. Contract Review and Analysis
First things first – we’ll thoroughly review your MCA agreement(s) to identify any potential legal vulnerabilities. Many MCA contracts contain provisions that may not hold up under Michigan law. For example, in the case of Adar Bays, LLC v. GeneSYS ID, Inc., 341 Mich App 362 (2021), the Michigan Court of Appeals held that certain convertible note agreements could be considered loans subject to usury laws, despite being structured as “investments.”
2. Negotiation with MCA Providers
Armed with our legal analysis, we’ll negotiate with your MCA providers to seek more favorable terms. This might include:
- Reducing the total repayment amount
- Lowering daily or weekly payment amounts
- Extending the repayment period
- Eliminating or modifying personal guarantees
Our experienced negotiators know how to leverage legal pressure to get MCA providers to the table.
3. Litigation Defense
If negotiation fails, we’re prepared to defend you vigorously in court. We’ll explore all possible legal defenses, including:
- Usury laws: While MCAs claim to be exempt from usury laws, this isn’t always the case. In Oasis Legal Finance Group, LLC v. Coffman, 361 P.3d 400 (Colo. 2015), the Colorado Supreme Court held that certain “litigation funding” agreements were actually loans subject to usury laws. We’ll argue for similar treatment of MCAs under Michigan law.
- Unconscionability: MCA agreements may be so one-sided that they’re unenforceable under Michigan contract law. We’ll argue that the terms are unconscionable and should be voided.
- Fraud or misrepresentation: If the MCA provider misled you about the terms of the agreement, we may have grounds to void the contract.
4. Bankruptcy Protection
In some cases, bankruptcy may be the best option to protect your business and personal assets. Our team includes experienced bankruptcy attorneys who can guide you through this process if necessary.
Case Study: How We Saved a Michigan Restaurant from MCA Disaster
Let’s look at a real-world example of how our Michigan MCA defense lawyers made a difference:
Note: Names have been changed to protect client confidentiality
Client: Joe’s Diner, a family-owned restaurant in Detroit
Problem: $150,000 in MCA debt across three providers, daily repayments of $1,500
Result: Reduced total debt to $75,000, monthly payments of $2,500Joe came to us on the verge of closing his restaurant. He had taken out multiple MCAs to cover expenses during a slow period, but the daily repayments were killing his cash flow. Here’s how we helped:
- We reviewed all three MCA agreements and found multiple legal issues, including potential usury law violations.
- We sent demand letters to all three MCA providers, outlining our legal arguments and proposing a settlement.
- Two providers agreed to negotiate. We secured a 50% reduction in the outstanding balance and converted the repayments to monthly installments.
- The third provider refused to negotiate, so we filed a lawsuit alleging usury and unconscionability. Faced with the prospect of a lengthy legal battle, they eventually agreed to similar terms as the other two providers.
Today, Joe’s Diner is thriving, and Joe can sleep at night knowing his business and personal assets are protected.
Don’t Wait – Get Help Now!
If you’re struggling with MCA debt in Michigan, don’t wait until it’s too late. The sooner you seek legal help, the more options you’ll have. Here’s why you should choose our Michigan MCA defense lawyers:
- Experience: We’ve handled hundreds of MCA cases and know all the tricks providers use.
- Aggressive Advocacy: We’re not afraid to take on even the biggest MCA providers.
- Holistic Approach: We don’t just fight your legal battles – we help you develop a comprehensive plan to get your business back on track.
Remember, you’re not alone in this fight. Contact us today for a free, confidential consultation. Let’s work together to free your business from the MCA trap and secure your financial future.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Every case is unique, and outcomes may vary. Please consult with a qualified attorney for advice specific to your situation.