Minnesota Merchant Cash Advance Defense Lawyers
Introduction
Congratulations! You’ve taken the first step towards regaining control of your business finances. If you’re a Minnesota business owner struggling with the overwhelming burden of a Merchant Cash Advance (MCA), you’re not alone. Many entrepreneurs find themselves trapped in the high-cost, high-stress world of MCAs. But don’t worry, we’re here to help. Our team at Delancey Street specializes in defending business owners against the aggressive tactics of MCA funders. Let’s dive into how we can assist you in navigating this complex legal landscape.
Understanding Merchant Cash Advances
Merchant Cash Advances (MCAs) are a popular alternative financing option for businesses that need quick access to capital. Unlike traditional loans, MCAs provide a lump sum of cash in exchange for a percentage of future credit card sales. This might sound straightforward, but the reality is often far more complicated and costly.
What is a Merchant Cash Advance?
An MCA is essentially a purchase of future receivables. The MCA provider gives you a lump sum upfront, and in return, they take a portion of your daily or weekly credit card sales until the advance is repaid. This arrangement allows businesses to get funding quickly without the stringent requirements of traditional loans. However, the costs can be exorbitant, often exceeding 100% APR when fees and interest are factored in.
Why MCAs Can Be Problematic
While MCAs offer fast funding, they come with significant drawbacks:
- High Fees and Interest Rates: The cost of an MCA can be astronomical, putting a severe strain on your cash flow.
- Aggressive Collection Practices: MCA providers often employ aggressive tactics to collect payments, including daily debits from your bank account.
- Lack of Regulation: Unlike traditional loans, MCAs are not subject to the same regulatory oversight, leading to potential abuses and unfair terms.
Common Legal Issues with MCAs
If you’re struggling with an MCA, you’re likely facing several legal challenges. Here are some common issues that our clients encounter:
Personal Guarantees and Confessions of Judgment
Many MCA agreements include personal guarantees and confessions of judgment. A personal guarantee means that if your business cannot repay the advance, you are personally liable for the debt. A confession of judgment allows the MCA provider to obtain a judgment against you without a trial, leading to immediate asset seizures and frozen accounts.
Usury and Predatory Lending
Some MCA agreements may be structured in ways that disguise usurious loans. Usury laws cap the amount of interest that can be charged on a loan, but since MCAs are technically sales of future receivables, they often skirt these regulations. Courts have debated whether certain MCAs constitute loans subject to usury laws, with mixed outcomes.
Aggressive Debt Collection
MCA providers often use aggressive debt collection tactics, including constant phone calls, threats of legal action, and even placing liens on your business assets. These practices can be not only stressful but also damaging to your business operations.
How We Can Help
At Delancey Street, we specialize in defending business owners against the predatory practices of MCA funders. Here’s how we can assist you:
Reviewing and Negotiating MCA Agreements
Our first step is to review your MCA agreement to identify any unfair or unlawful terms. We then negotiate with the MCA provider to modify the terms of the agreement, potentially lowering your payments or extending the repayment period.
Defending Against Lawsuits
If you’re being sued by an MCA provider, we can defend you in court. Our experienced attorneys will challenge the validity of the MCA agreement, dispute the amount owed, and fight to protect your assets.
Filing for Bankruptcy
In some cases, filing for bankruptcy may be the best option. We can guide you through the process of filing for personal or business bankruptcy, helping you discharge your MCA debt and get a fresh start.
Real-Life Scenarios
Let’s consider a hypothetical scenario to illustrate how we can help:
Case Study: Jane’s Boutique
Jane owns a small boutique in Minnesota. She took out an MCA to cover inventory costs, but the daily repayments soon became unmanageable. The MCA provider threatened legal action and placed a lien on her business assets. Jane contacted us for help. We reviewed her MCA agreement and found several unlawful terms. We negotiated with the MCA provider to reduce her payments and remove the lien. When the provider refused to cooperate, we defended Jane in court, ultimately securing a favorable settlement.
Call to Action
Are you struggling with an MCA? Don’t wait until it’s too late. Contact us today for a free consultation. Let us help you regain control of your business and your life. Call Delancey Street now and take the first step towards financial freedom.
Conclusion
Dealing with an MCA can be daunting, but you don’t have to face it alone. At Delancey Street, we have the expertise and dedication to defend your rights and protect your business. Whether it’s negotiating better terms, defending against lawsuits, or guiding you through bankruptcy, we are here to help. Reach out to us today and let’s work together to secure a brighter future for your business.