New Hampshire Merchant Cash Advance Defense: Protecting Your Business
Are you a small business owner in New Hampshire struggling with a merchant cash advance (MCA)? You’re not alone. Many entrepreneurs find themselves trapped in a cycle of high-interest payments and aggressive collection tactics. But there’s hope. At Delancey Street, we’ve helped countless businesses navigate the treacherous waters of MCAs and come out stronger on the other side.
Understanding Merchant Cash Advances in New Hampshire
Let’s start with the basics. A merchant cash advance isn’t a loan – it’s an advance on your future credit card sales. Sounds simple, right? WRONG. These agreements can be incredibly complex and often hide predatory terms in the fine print.In New Hampshire, MCAs operate in a legal gray area. Unlike traditional loans, they’re not subject to usury laws that cap interest rates. This means MCA providers can charge astronomical fees that would make even a loan shark blush.Here’s a quick breakdown of how MCAs typically work:
- You receive a lump sum upfront
- The MCA provider takes a percentage of your daily credit card sales
- This continues until you’ve repaid the advance plus fees
Sounds straightforward, but here’s the catch – the effective annual percentage rate (APR) on these advances can skyrocket to 200% or more! That’s enough to make your head spin faster than a New Hampshire maple syrup bottle in a centrifuge.
The MCA Trap: How Businesses Get Stuck
We’ve seen it time and time again. A business owner needs quick cash for an emergency or opportunity. They turn to an MCA, thinking it’s a short-term solution. But before they know it, they’re caught in a web of daily payments that drain their cash flow.Here’s a typical scenario:
- Business takes out a $50,000 MCA
- Agreement requires repayment of $75,000 over 6 months
- Daily payments of $500 are automatically deducted
- Business struggles to keep up with payments
- Takes out another MCA to cover shortfall
- Rinse and repeat until the business is drowning in debt
It’s a vicious cycle that can bring even successful businesses to their knees. But don’t despair – we’re here to throw you a lifeline.
Legal Defenses Against MCAs in New Hampshire
Now, let’s get down to the nitty-gritty. How can you fight back against predatory MCAs? Here are some strategies we’ve successfully used to defend our clients:
1. Challenging the Contract
Many MCA agreements are riddled with legal flaws. We’ve seen contracts that:
- Violate New Hampshire’s Unfair and Deceptive Trade Practices Act (RSA 358-A)
- Contain unconscionable terms
- Lack proper disclosures
In the case of Merchant Cash and Capital, LLC v. Edgewood Group, LLC (2016 WL 3748244), a New Hampshire court found that certain MCA agreements could be considered loans subject to usury laws. This opens up a whole new avenue of defense!
2. Asserting Usury Claims
While MCAs claim to be “purchases” of future receivables, courts are increasingly seeing through this facade. If we can prove the MCA is actually a disguised loan, we can potentially assert usury claims under New Hampshire law (RSA 358-A:2).
3. Challenging Personal Guarantees
Many MCA agreements include personal guarantees that put your personal assets at risk. We’ve successfully argued that these guarantees are unenforceable due to:
- Lack of consideration
- Fraudulent inducement
- Violation of public policy
Remember, every case is unique. What worked for one business might not work for another. That’s why it’s crucial to work with experienced attorneys who understand the nuances of New Hampshire law and MCA defense strategies.
Steps to Take If You’re Struggling with an MCA
If you’re feeling overwhelmed by an MCA, don’t panic. Here are some immediate steps you can take:
- STOP communicating with the MCA provider directly
- Gather all your documents related to the MCA
- Review your bank statements for unauthorized withdrawals
- Consider closing the bank account linked to the MCA (but consult with us first!)
- Contact us IMMEDIATELY for a free consultation
Remember, time is of the essence. The longer you wait, the fewer options you may have.
Why Choose Delancey Street for Your MCA Defense?
At Delancey Street, we’re not just lawyers – we’re business advocates. We understand the challenges you’re facing because we’ve been there ourselves. Our team includes former business owners who’ve dealt with MCAs firsthand.Here’s what sets us apart:
- Experience: We’ve handled hundreds of MCA cases across the country
- Expertise: Our attorneys are well-versed in both New Hampshire and federal law
- Results: We’ve saved our clients millions of dollars in MCA debt
- Compassion: We treat your business like it’s our own
Don’t just take our word for it. Here’s what one of our clients, a small restaurant owner in Manchester, had to say:“I thought I was going to lose everything. Delancey Street not only saved my business but gave me hope for the future. They’re not just lawyers – they’re lifesavers.”
The Road to Financial Freedom
Dealing with an MCA doesn’t have to mean the end of your business dreams. With the right legal strategy and a team of experienced attorneys in your corner, you can overcome this challenge and come out stronger on the other side.At Delancey Street, we’re committed to helping New Hampshire businesses thrive. We’ll work tirelessly to defend your rights, negotiate with MCA providers, and find a solution that works for you.