San Jose, CA Merchant Cash Advance Defense Lawyers
Introduction
Running a small business in San Jose, CA, can be a rollercoaster ride. Between managing employees, keeping customers happy, and trying to turn a profit, it’s easy to feel overwhelmed. And when cash flow gets tight, it can be tempting to turn to merchant cash advances (MCAs) for quick funding. But what happens when those advances turn into a financial nightmare? That’s where we come in. At Delancey Street, we specialize in defending businesses against predatory MCA practices, helping you regain control of your finances and get back on track.
Understanding Merchant Cash Advances
What is a Merchant Cash Advance?
A merchant cash advance is a type of financing where a business receives a lump sum of cash in exchange for a percentage of future credit card sales. While this might sound like a convenient solution, it often comes with exorbitant fees and interest rates that can trap businesses in a cycle of debt. For example, in the case of Captain Bounce, Inc. v. Business Financial Services, Inc., the plaintiffs alleged that the defendants charged excessive interest rates and engaged in unfair business practices, violating California’s usury laws.
Common Issues with MCAs
Many businesses find themselves overwhelmed by the terms of their MCA agreements. Common issues include:
- Excessive Fees and Interest Rates: Some agreements charge rates far above the legal limits.
- Lack of Transparency: Many agreements fail to clearly disclose fees, rates, and total repayment costs.
- Confusing Clauses: Contracts often contain contradictory or misleading terms.
- Waiving Legal Rights: Some agreements require borrowers to waive certain legal protections.
These issues can lead to financial distress, making it difficult for businesses to stay afloat. But don’t worry, we’re here to help.
Our Approach to MCA Defense
Analyzing Your MCA Agreement
The first step in defending against a predatory MCA is to thoroughly analyze the agreement. Our experienced team at Delancey Street will comb through your contract to identify any unlawful or unethical provisions. For instance, California’s SB 1235 requires MCA providers to disclose the Annual Percentage Rate (APR) and other key terms, which many fail to do. If we find violations, we can fight to have the contract voided or amended.
Legal Strategies for Debt Relief
We employ a variety of legal strategies to help you break free from oppressive MCA debt:
- Negotiating Settlements: We can negotiate directly with MCA providers to reduce the total repayment amount and create a manageable payoff plan.
- Restructuring Payments: If monthly payments are unmanageable, we may be able to extend the term length or reduce fees and interest rates.
- Filing Bankruptcy: While not ideal, Chapter 7 or Chapter 11 bankruptcy can eliminate or restructure debts, giving you a fresh start.
- Challenging Debt Ownership: We can contest whether third-party debt buyers truly own the right to collect the debt.
- Contesting Confession of Judgment Clauses: Many MCA agreements include clauses allowing funders to obtain judgments without notice. We can fight to overturn these improper judgments.
- Freezing Repayments: If the MCA provider has acted unlawfully, we may be able to get a court order halting automatic repayments while we pursue further legal action.
Case Study: Captain Bounce, Inc. v. Business Financial Services, Inc.
In Captain Bounce, Inc. v. Business Financial Services, Inc., the plaintiffs argued that the defendants’ MCA agreements violated California’s usury laws by charging excessive interest rates. The court ultimately granted the defendants’ motion to compel arbitration, but the case highlights the importance of scrutinizing MCA agreements for potential legal violations.
Why Choose Delancey Street?
Compassionate and Ethical Approach
We understand that dealing with MCA debt can be incredibly stressful. That’s why we take a compassionate, ethical approach to every case. We’re not just here to provide legal representation; we’re here to support you through every step of the process.
Customized Solutions
Every business is unique, and so are its financial challenges. We create customized debt relief solutions tailored to your specific situation. Whether it’s negotiating a settlement, restructuring payments, or challenging debt ownership, we’ll find the right strategy for you.
Proven Track Record
With years of experience in MCA defense, we’ve seen it all. From challenging unlawful contracts to negotiating favorable settlements, we have a proven track record of helping businesses regain control of their finances.
Call to Action
If you’re struggling with merchant cash advance debt, don’t wait until it’s too late. Contact us today for a free consultation. Let us help you break free from the cycle of debt and get back to doing what you do best—running your business. Call us now or leave a comment below to get started.
Conclusion
At Delancey Street, we’re committed to helping San Jose businesses navigate the complexities of merchant cash advance agreements. With our compassionate approach and customized solutions, we can help you regain control of your finances and achieve long-term success. Don’t let MCA debt hold you back—reach out to us today and take the first step towards financial freedom.
Legal Citations:
- Captain Bounce, Inc. v. Business Financial Services, Inc., Case No. 11-CV-858 JLS (WMC) (S.D. Cal. Mar. 19, 2012).
- California Senate Bill 1235 (SB 1235).
- Federal Judge R. Gary Klausner’s ruling on California’s small-business lending disclosure law.