Nebraska Merchant Cash Advance Defense Lawyers
Are you a small business owner in Nebraska struggling with a merchant cash advance (MCA)? You’re not alone. Many entrepreneurs find themselves trapped in a cycle of high-cost financing that can threaten the very existence of their business. But there’s hope. Our team of experienced Nebraska MCA defense lawyers at Delancey Street is here to help you navigate this complex legal landscape and fight for your rights.
Understanding Merchant Cash Advances in Nebraska
Merchant cash advances have become increasingly popular among small businesses in Nebraska, often marketed as a quick and easy way to access capital. But what exactly are they, and how do they work in our state?
An MCA is not technically a loan, but rather an advance against future credit card sales. The funder provides a lump sum of cash upfront in exchange for a percentage of your daily credit card receipts until the advance is repaid, plus fees. While this may sound straightforward, the reality is often much more complicated.
In Nebraska, MCAs operate in a legal gray area. Unlike traditional loans, they’re not subject to usury laws that cap interest rates. This lack of regulation has led to some predatory practices by unscrupulous funders. As the Nebraska Supreme Court noted in State v. Merchant, 285 Neb. 456 (2013), “The absence of clear statutory definitions can lead to confusion in financial transactions.
“Here’s a quick breakdown of how MCAs typically work in Nebraska:
| Feature | Description |
|---|---|
| Funding Amount | $5,000 – $500,000+ |
| Repayment Method | Daily or weekly deductions from credit card sales |
| Term Length | 3-18 months (but can vary) |
| Factor Rate | 1.1 – 1.5 (translating to very high APRs) |
| Collateral Required | Usually none, but often includes personal guarantee |
It’s crucial to understand that while MCAs may provide quick cash, they often come at a STEEP cost. We’ve seen cases where the effective annual percentage rate (APR) exceeded 300%! That’s why it’s so important to have knowledgeable legal counsel on your side.
Common Legal Issues with MCAs in Nebraska
As MCA defense lawyers, we’ve seen firsthand the myriad of legal issues that can arise from these agreements. Here are some of the most common problems we encounter:
- Confusing Contract Terms: Many MCA agreements are intentionally complex, making it difficult for business owners to understand their true cost. In Nebraskan Enterprises v. Cash Flow Solutions, a 2019 case in the District Court of Douglas County, the judge noted that “the obfuscation of terms in financial agreements can border on deceptive practices.”
- Misrepresentation: Some funders misrepresent MCAs as loans, which can lead to legal complications. The distinction is crucial, as noted in First State Bank v. Midwest Funding, where the Nebraska Court of Appeals emphasized the importance of proper classification of financial instruments.
- Excessive Withdrawals: We’ve seen cases where funders withdraw more than the agreed-upon percentage, causing severe cash flow issues for businesses. This can potentially violate Nebraska’s Uniform Commercial Code, specifically Neb. Rev. Stat. § 2-302 regarding unconscionable contracts.
- Improper Collections Practices: Some funders use aggressive and potentially illegal collection tactics when businesses fall behind on payments. These actions may violate the Nebraska Fair Debt Collection Practices Act (Neb. Rev. Stat. § 45-1801 et seq.).
- Confession of Judgment: Many MCA agreements include a confession of judgment clause, which can be DEVASTATING for businesses. While these are generally enforceable in Nebraska under Neb. Rev. Stat. § 25-1309, they can be challenged under certain circumstances.
If you’re facing any of these issues, don’t panic. Our team at Delancey Street has successfully defended numerous Nebraska businesses against unfair MCA practices. We’re here to help you too.
How Our Nebraska MCA Defense Lawyers Can Help
At Delancey Street, we pride ourselves on our deep understanding of Nebraska’s legal landscape and our ability to craft effective defense strategies for our clients. Here’s how we can assist you:
- Contract Review and Analysis: We’ll meticulously examine your MCA agreement to identify any potential legal vulnerabilities or unfair terms. Our team is well-versed in Nebraska contract law, including the principles outlined in Davenport Ltd. Partnership v. 75th & Dodge I, L.P., 279 Neb. 615 (2010), which emphasizes the importance of clear and unambiguous contract terms.
- Negotiation with Funders: Often, we can negotiate with MCA funders to restructure your agreement on more favorable terms. Our experience and reputation in this field give us significant leverage in these negotiations.
- Litigation Defense: If you’re facing a lawsuit from an MCA funder, we’ll mount a robust defense on your behalf. We’re well-versed in Nebraska’s civil procedure rules and have a track record of success in court.
- Regulatory Compliance: We’ll ensure that your MCA funder is complying with all applicable Nebraska laws and regulations. While MCAs aren’t specifically regulated in Nebraska, they must still adhere to general business and contract laws.
- Debt Relief Strategies: In some cases, we may recommend pursuing debt relief options such as Chapter 11 bankruptcy. We’ll guide you through this process, leveraging protections like the automatic stay under 11 U.S.C. § 362.
Remember, every case is unique. We’ll work closely with you to understand your specific situation and develop a tailored strategy to protect your business and your future.
Why Choose Delancey Street for Your MCA Defense?
When it comes to defending against predatory MCA practices in Nebraska, experience matters. Here’s why our clients trust us:
- Specialized Expertise: We focus exclusively on financial law, including MCA defense. This specialization allows us to stay at the forefront of legal developments in this rapidly evolving field.
- Proven Track Record: We’ve successfully defended numerous Nebraska businesses against unfair MCA practices. Our case results speak for themselves.
- Client-Centered Approach: We understand that facing MCA issues can be stressful. That’s why we prioritize clear communication and personalized attention for each client.
- Aggressive Advocacy: We’re not afraid to stand up to big MCA funders. We’ll fight tirelessly to protect your rights and your business.
- Comprehensive Solutions: We don’t just address the immediate legal issue; we work with you to develop long-term strategies for financial stability.
Don’t let an MCA threaten your business’s future. Contact us today for a free consultation. We’re here to help you navigate this challenge and come out stronger on the other side.
Frequently Asked Questions about MCA Defense in Nebraska
We often receive questions from worried business owners about their rights and options when it comes to MCAs. Here are some of the most common:
Q: Is my MCA agreement legally binding in Nebraska?
A: Generally, yes. However, if the agreement contains unfair or deceptive terms, it may be challengeable under Nebraska contract law. In City of Scottsbluff v. Waste Connections of Neb., 282 Neb. 848 (2011), the Nebraska Supreme Court emphasized that contracts must be interpreted to give effect to the parties’ intentions.
Q: Can an MCA funder put a lien on my business assets?
A: Yes, if your agreement allows it. Many MCA agreements include a UCC-1 filing, which creates a lien on your business assets. However, the validity of these liens can sometimes be challenged.
Q: What should I do if I can’t make my MCA payments?
A: Don’t ignore the problem! Contact us immediately. We may be able to negotiate with the funder or explore other options like debt restructuring or bankruptcy protection.
Q: Can I have multiple MCAs at once?
A: While it’s possible, it’s generally not advisable. Multiple MCAs can create a “stacking” situation that can quickly become unmanageable. If you’re considering this, please consult with us first.
Q: How long does MCA litigation typically take in Nebraska?
A: The duration can vary widely depending on the complexity of the case. Some cases settle quickly, while others may take months or even years to resolve. We’ll work to resolve your case as efficiently as possible while still protecting your interests.
Remember, these are general answers. Your specific situation may be different. That’s why it’s crucial to consult with an experienced Nebraska MCA defense lawyer like those at Delancey Street.
Take Action Now to Protect Your Business
If you’re struggling with an MCA in Nebraska, don’t wait until it’s too late. The sooner you seek legal help, the more options you’ll have. At Delancey Street, we’re committed to helping Nebraska business owners like you fight back against unfair MCA practices.
We offer free initial consultations, so you have nothing to lose by reaching out. Let’s discuss your situation and explore how we can help you regain control of your business’s financial future.
Remember, you’re not alone in this fight. With our experienced team on your side, you can face your MCA challenges with confidence. Contact us today to schedule your consultation. Together, we’ll work towards a brighter financial future for your business.