Struggling with business debt?

Congratulations! You took the leap and started your own business in Tulsa. You had the vision, the drive, and the guts to be your own boss. But somewhere along the way, you hit a financial speed bump. Maybe sales were slow for a few months. Maybe an unexpected expense popped up. Whatever the reason, you found yourself short on cash.That’s when the merchant cash advance (MCA) companies started circling like sharks, dangling the promise of quick and easy money. No credit check required! Funding in as little as 24 hours! It sounded too good to be true. And sadly, it probably was.Now those daily MCA payments are eating up a huge chunk of your revenue. The debt keeps piling up with no end in sight. Your business is struggling, your stress levels are through the roof, and you’re wondering how the heck you’re going to dig yourself out of this hole. Sound familiar? If so, you’re not alone.WHAT IS A MERCHANT CASH ADVANCE?First, let’s define what we’re dealing with here. A merchant cash advance is a type of alternative financing where a funding company gives you a lump sum of cash upfront. In exchange, you agree to pay them back by giving them a cut of your daily credit card and debit card sales.The MCA company sets up automatic withdrawals from your bank account each day until the advance is paid off. Sounds simple enough, right? Well, the devil is in the details. And those details can quickly turn into a nightmare for unsuspecting business owners.THE DARK SIDE OF MERCHANT CASH ADVANCESMake no mistake, merchant cash advances may be easy to get, but they come at a steep price. MCA companies charge astronomical fees that can equate to annual percentage rates (APRs) of 50% to 500% or more! Yes, you read that right. 500% or more.To put that in perspective, the average credit card APR is around 16%. So if you thought putting business expenses on your Visa was expensive, MCAs are in a whole other stratosphere. And since merchant cash advances aren’t technically loans, they aren’t subject to the same regulations that cap interest rates on other financing products.But the sky-high fees are just the tip of the iceberg. MCA contracts are notoriously complex and confusing. Many business owners don’t fully understand what they’re signing up for until it’s too late. The agreements are filled with fine print, legalese, and vague terms that give the funding company the upper hand.For example, some MCA contracts include a “confession of judgment” clause. This means that if you default on the advance, the funder can go to court and get a judgment against you without even notifying you or giving you a chance to defend yourself. They can then use that judgment to freeze your bank accounts, seize your assets, or even force you into bankruptcy.Other MCA agreements have a “reconciliation” clause that allows the funder to increase your daily payments if your credit card sales go up. So even if your business has a good month, you don’t get to keep more of your hard-earned money. It just goes straight into the funder’s pocket.As if that weren’t bad enough, many MCA companies engage in deceptive and predatory practices. They may misrepresent the terms of the advance, fail to disclose key information, or even forge your signature on documents. Some will harass you with constant phone calls and emails demanding payment. Others will threaten legal action or show up at your place of business unannounced.THE CONSEQUENCES OF DEFAULTING ON A MERCHANT CASH ADVANCESo what happens if you can’t keep up with your MCA payments? The short answer is nothing good. Defaulting on a merchant cash advance can have devastating consequences for your business and your personal finances.As mentioned earlier, the funder may be able to get a judgment against you without notice thanks to that sneaky confession of judgment clause. They can then use that judgment to freeze your bank accounts, leaving you unable to pay your employees, vendors, or bills. They can also seize any business or personal assets you put up as collateral, such as equipment, inventory, or even your home.If the funder reports your default to the credit bureaus, your credit score will take a major hit. This can make it difficult or impossible to get approved for other loans or lines of credit in the future. You may also end up on a cash advance blacklist, meaning other MCA companies won’t work with you either.In some cases, the funder may even file a lawsuit against you seeking to collect the full outstanding balance of the advance plus interest and fees. If they win a judgment, they can garnish your wages, put a lien on your property, or force you into bankruptcy.The stress and anxiety of dealing with aggressive MCA collectors can take a serious toll on your mental and physical health. Many business owners report feeling overwhelmed, hopeless, and even suicidal as they struggle under the weight of their debt.MERCHANT CASH ADVANCE REGULATIONS IN OKLAHOMASo what protections do Oklahoma business owners have against predatory MCA practices? Unfortunately, not many. Merchant cash advances operate in a legal gray area with minimal oversight at the state or federal level.Unlike traditional loans, MCAs are structured as a purchase of future receivables rather than a loan. This means they aren’t subject to the same usury laws that cap interest rates on other types of financing. In Oklahoma, there is no legal maximum APR for merchant cash advances.However, there are a few legal theories that may provide some relief for Oklahoma businesses trapped in MCA debt:

• Usury laws – While Oklahoma doesn’t have a maximum APR for MCAs, interest rates and fees above certain thresholds may still violate the state’s general usury laws against predatory lending. For example, in Hoxie v. Rapid Capital Funding, LLC, the court found that an MCA with an effective APR of 359% violated Oklahoma’s usury statute. (Hoxie v. Rapid Capital Funding, LLC, No. CIV-19-1025-D, 2020 WL 3971623 (W.D. Okla. July 14, 2020))
• Unconscionability – An MCA agreement may be unenforceable if its terms are so one-sided and oppressive that they “shock the conscience.” Factors courts consider include the bargaining power of the parties, whether the terms are oppressive, and whether the contract is excessively one-sided. (Barnes v. Helfenbein, 548 P.2d 1014, 1020 (Okla. 1976))
• Misrepresentation – If the MCA company made false or misleading statements to induce you to sign the agreement, you may have a claim for fraudulent or negligent misrepresentation. (Silk v. Phillips Petroleum Co., 760 P.2d 174, 176-77 (Okla. 1988))

However, asserting these defenses in court can be an uphill battle. MCA funders are notorious for their aggressive litigation tactics and deep pockets. They often file lawsuits in faraway states that are friendly to their industry, making it difficult and expensive for cash-strapped businesses to defend themselves.HOW A TULSA MERCHANT CASH ADVANCE ATTORNEY CAN HELPIf you’re drowning in MCA debt, you may feel like you’re out of options. But don’t lose hope just yet. A skilled Tulsa merchant cash advance attorney can be your lifeline in these troubled waters. Here’s how we can help:

1. Review your MCA agreement – We’ll carefully review your contract to identify any unfair, deceptive, or unconscionable terms that may violate Oklahoma law or give you leverage in negotiations.
2. Negotiate with the funder – We’ll reach out to the MCA company on your behalf and attempt to negotiate more favorable repayment terms, such as a lower payoff amount, longer repayment period, or reduced interest rate. In some cases, we may be able to get the debt eliminated entirely.
3. Defend you in court – If the funder has already filed a lawsuit against you, we’ll mount a vigorous defense and fight to protect your rights. We’ll assert any applicable legal defenses and work to get the case dismissed or settled on favorable terms.
4. Explore other debt relief options – Depending on your situation, filing for bankruptcy may be your best path to a fresh start. We’ll advise you on whether Chapter 7 or Chapter 13 bankruptcy could help you eliminate or restructure your MCA debt along with other business and personal debts.

At DelanceyStreet.com, we have years of experience standing up to predatory MCA funders and helping Tulsa businesses get out of crippling debt. We know the ins and outs of this complex area of law and we’re not afraid to go toe-to-toe with the big guys.We understand that the thought of hiring a lawyer may be daunting when you’re already struggling financially. That’s why we offer free consultations and flexible payment plans to make our services as accessible as possible. And in many cases, we may be able to get the MCA company to pay our attorneys’ fees as part of a settlement agreement.THE BOTTOM LINEIf you’re a Tulsa business owner being crushed by merchant cash advance debt, know that you’re not alone and you have options. Don’t let shame or fear keep you from seeking the help you need. The sooner you take action, the better your chances of achieving a successful outcome.At DelanceyStreet.com, we’re here to listen to your story, explain your rights, and fight for the justice you deserve. We’ll work tirelessly to help you find a way out of this financial nightmare so you can get back to doing what you do best – running your business.