Look, a merchant cash advance, or MCA, is business financing that was given to you in exchange for a portion of your future credit card sales. If you don’t pay back an MCA, there are consequences that can put your business—and you—at risk. If you signed a COJ, the lender can take your assets immediately – within 24 hours, without going to court. If you signed a personal guarantee, the lender can come after you personally.

THE PRACTICE OF STACKING MERCHANT CASH ADVANCES CAN QUICKLY SINK A BUSINESS
When you take multiple MCAs at once, the daily or weekly money that is taken from your credit card sales can pile up. This means your cash flow might be crushed. Because your cash flow is crushed, you could miss important payments, like payroll or rent, and that could harm your ability to stay in business. Many people end up taking 2nd, 3rd loans, in order to keep up with the first loan they took. They are unable to keep up with their payroll. They go bankrupt, or they restructure it with our help.

THE LENDER’S PERSPECTIVE
Lenders who provided your MCA want to get paid, and they will protect their interests – regardless of what they have to do. If you don’t pay, they might file a lawsuit. That lawsuit can lead to a judgment, which might be executed against your business bank account or even your personal assets if you signed a personal guarantee.

THE BORROWER’S PERSPECTIVE
You might not have the money. You may feel like paying back debt is pouring money down the drain—especially if your business is struggling. You don’t think your business will be around in a year. If that’s the situation you’re in, the worst thing to do is to ignore your MCA provider. Because ignoring the problem can make matters worse, many business owners look for solutions like business debt settlement or business debt consolidation. Regardless – we can help you.

POTENTIAL LAWSUITS
A lawsuit that was filed by your MCA provider can result in a default judgment. That judgment filed by the lender might allow the lender to freeze your business bank account and seize assets. If you have a confession of judgment (COJ), then the lender can use it in court overnight. This means you can face immediate collection actions against your business, and personal, assets.

PERSONAL GUARANTEES
A personal guarantee that was included in your MCA agreement puts your personal assets at risk. This means your home, car, or personal bank account might be used to pay the debt if your business can’t. Your personal credit score will be at risk too. Because of this, you might damage not only your business but also your personal finances.

COULD YOU FACE CRIMINAL CHARGES?
Many people wonder whether failing to pay an MCA is a crime. Generally, not paying a debt is not a crime. That said, if there was fraud or intentional deception—like lying about your income, forging bank statements, or hiding assets—you might face criminal investigations. This could lead to charges such as fraud, which is a serious offense. You should visit the Federal Trade Commission website to learn more about unfair or deceptive practices, which can include fraudulent activities.

PENALTIES AND CRIMES
If a court rules that fraud was committed, the penalties can be severe. Because any type of fraud is considered a serious offense, punishments can include fines and even jail time. This situation is rare, but it does happen when business owners mislead MCA lenders about their financials or misuse funds. For example, you took out funds on someone elses business, or you doctored bank statements. For more information about potential criminal consequences, you can also check the U.S. Department of Justice website.

STRATEGIES OF HOW WE’D DEFEND YOU
We are DelanceyStreet.com—a top tier business debt relief company based out of NYC, that helps clients nationwide. We believe in open communication and a proactive approach when it comes to defending you against MCA providers.

Here’s How We Defend You, And Your Business

1. Reviewing Your Agreement: We look for terms that were unfair or unclear. Because many MCA contracts have hidden fees or harsh terms, we can negotiate on your behalf.
2. Negotiating Settlements: We often negotiate to lower the total you owe. This means you might pay less each month. Because MCA lenders want to avoid your bankruptcy, they could be open to new repayment terms. They don’t want you going out of business, they just want their money back.
3. Debt Consolidation: We explore business debt consolidation or invoice factoring if you qualify. Because these methods reduce your total monthly payments, they can help save your business from default.
4. Legal Support: If a lawsuit was filed, we work closely with our legal counsel. Our firm is owned by an attorney who was involved in high-profile legal matters. Because we have a sister-law firm, you get a two-pronged approach that defends you in and out of court.

TALKING TO YOUR LENDER
Most MCA providers want to be paid, but they’d rather work with you than see you go out of business. Evidence that was sent to the lender proving you cannot afford the current payments can sometimes lead them to consider a settlement offer. Often, we are able to get penalties waived, legal fees waived, and even a balance reduction. This means they might reduce your balance or lower your interest.

ALTERNATIVES TO IGNORING YOUR MCA
Many business owners ignore the debt, but ignoring your MCA can cause bigger issues – legally and financially. Because ignoring the MCA debt can lead to escalated collection efforts, you might end up in court. Instead, try these strategies:

• Speak Directly to Your MCA Provider: Lenders who are reasonable may offer a payment plan or temporary relief. We typically see MCA lenders open to a monthly payment plan, because they know our clients stick to it.
• Call a Nonprofit Credit Counselor: Organizations that were approved by the Small Business Administration can offer guidance.
• Consider Debt Consolidation: You might get a new loan that pays off the MCA. This leaves you with one payment that was hopefully lower than the combined total you had before.

WHAT IF YOU’RE SUED?
If you’re sued, the court might grant a judgment that was based on your signed contract. This judgment can let the lender garnish your bank accounts. Because this can destroy your business, it’s crucial to get professional help right away. We can help you negotiate a settlement even after a lawsuit begins.

MULTIPLE VIEWPOINTS
From the creditor’s side, it’s about recovering the money they advanced. From the business owner’s side, it’s about survival and needing a way out of the debt. Because both sides have opposing goals, negotiations can be difficult. Regardless – we can help you. We have immense experience in dealing with MCAs and other forms of business debt such as SBA loans, credit cards, and more.

RESOURCES
We want you to know your rights and options. Because knowledge is power, we suggest you read more at:

• Federal Trade Commission (about unfair business practices and consumer protection)
• Small Business Administration (guidelines for small business loans and advice on managing debt)

CONSEQUENCES OF NOT PAYING
Remember, ignoring an MCA lender who is demanding repayment can hurt your personal credit and your business. Because your credit score might drop, you could face higher interest rates on future loans. If your bank accounts are frozen, you might struggle to pay employees, rent, or suppliers.

DEBT CAN BE FIXED
Yes, you read that right—debt can be fixed. This means that with the right approach, you can renegotiate and possibly save your business from toxic debt. Because we’ve helped countless business owners reduce their balances and keep the lights on, we want to do the same for you.

Anyway, here’s the bottom line: If you don’t pay your MCA, you risk lawsuits, judgments, and possibly worse if there was fraud involved. We understand how overwhelming it can be to juggle multiple debts, from merchant cash advances, to business credit card debt, and more. That’s why we’re here.