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Merchant Cash Advance Defense: Protecting Your Business

You’re here because you need help – and that’s okay. Dealing with merchant cash advances (MCAs) can be a nightmare: the confusing terms, the aggressive collections tactics, the feeling of being trapped. But, we’re here to guide you through this, step-by-step.First, let’s get one thing straight: MCAs are not loans – they’re a purchase of your future receivables. This distinction is crucial, because it means traditional lending laws don’t apply. So, what do you do, if you get hit – with one of these things?

Understanding the MCA Landscape

MCAs have exploded in popularity, filling a funding gap left by banks. But, with minimal regulation, the industry is like the Wild West. Providers use deceptive tactics: burying terms in dense legalese, withholding key details until it’s too late. And if you miss payments? They’ll come at you, hard – freezing accounts, threatening lawsuits. It’s a predatory game.But you’re not defenseless. By understanding how MCAs work, you can fight back:

  • Renewals/Restructures: Providers often disguise new MCAs as “renewals” to extract more money. But, these are separate transactions requiring new underwriting.
  • Usury: Some states regulate MCAs as loans, so excessive fees could violate usury laws.
  • RICO Claims: If the provider used truly egregious, fraudulent conduct, you may have a RICO claim.

These are just some potential defenses. The key? Knowing your rights and not letting providers bully you.

Navigating Collections Harassment

Here’s where it gets ugly. If you miss payments, get ready for the collections calls, emails, even ambushes at your workplace or home. It’s intimidating, but remember: there are laws against harassment.Under the Fair Debt Collection Practices Act (FDCPA), third-party collectors can’t:

  • Call before 8am or after 9pm
  • Use profane language
  • Threaten violence
  • Lie about the debt amount
  • Discuss the debt with unauthorized third parties
See also  West Virginia MCA Defense Lawyers Business Debt Relief

If they violate these rules? You may have a claim against them. So document everything – keep a log of all calls, emails, visits. The more evidence, the better.

Considering Bankruptcy Protection

For some businesses, bankruptcy may be the best option to get breathing room from aggressive MCA collections. Both Chapter 7 and 13 can temporarily halt collections through the automatic stay.But bankruptcy is a complex process with major consequences, so don’t go it alone. An experienced bankruptcy attorney can:

  • Analyze whether bankruptcy makes sense for your situation
  • Ensure you qualify and prepare thorough paperwork
  • Represent you at creditor meetings
  • Advocate for a manageable repayment plan (Chapter 13)

Bankruptcy isn’t pretty, but it offers powerful protections when you’re drowning in MCA debt.

Finding the Right Legal Partner

Look, taking on MCA providers is David vs. Goliath stuff. You need a battle-tested legal team in your corner – one that understands every angle of attack.At Delancey Street, we’ve been through this fight before. Our attorneys have:

  • Secured injunctions against collections harassment
  • Negotiated affordable MCA restructures
  • Alleged usury violations to void abusive agreements
  • Guided businesses through Chapter 11 reorganizations

We get it – the MCA world is murky and stressful. But you don’t have to face it alone. When you’re ready to fight, we’re here, every step of the way.

The Bottom Line

Dealing with merchant cash advances is never easy. The legalese, the threats, the feeling of being trapped – it’s overwhelming. But remember: you have rights, and you have options.Don’t just take the MCA provider’s word for it. Question everything:

  • Were key terms hidden or misrepresented?
  • Are the fees actually usurious under state law?
  • Have the collectors crossed legal lines with their tactics?
See also  West Virginia MCA Defense Lawyers

If the answer is yes, you may be able to void the agreement or seek damages. It’s a battle, but one you can win – with the right legal firepower.

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

"Super fast, and super courteous, Delancey Street is amazing"
$500,000 MCA Restructured Over 3 Years
"Thanks for helping me in literally 24 hours"
$250,000 SBA Loan Offer in Compromise
"Great choice for business owners who need a trustworthy partner"
$350,000 MCA Restructured Over 2 Years

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