Criminal Defense Lawyers

How can I obtain MCA loan relief?

We understand how overwhelming a Merchant Cash Advance (MCA) can be, especially when repayment terms start to strain your cash flow. You might wonder what happens if you fall behind on your daily or weekly payments. The consequence is that you could face legal action, potential default fees, and even a confession of judgment (COJ) that can allow the MCA company to rapidly seize your business assets. We are DelanceyStreet.com, a top tier business debt relief company based in NYC, and we help clients all over the country handle these issues.

WHAT IS AN MCA AND WHY CAN IT BECOME A PROBLEM?
A Merchant Cash Advance that was designed to give you fast funding can turn into a financial burden if the repayment terms are not in your favor. The consequence is that you will get locked into a daily or weekly repayment schedule, which can hurt your ability to pay employees, rent, or other critical expenses.

An MCA that was marketed with confusing factor rates can lead to unexpectedly high costs. The consequence is that you might pay an effective APR that’s over 50%—or even higher—which can drain your business bank account and force you into further debt.

WHY GET LEGAL HELP?
Many MCAs include clauses that were created to protect lenders more than borrowers. The consequence is that if you default, the MCA provider may file a confession of judgment (COJ) against your business in certain states, allowing them to freeze your accounts without warning. A COJ that was activated against your business can result in garnished revenue, which can force you to shut down.

HOW DOES DELANCEYSTREET.COM DEFEND YOU?
We have a sister law firm that was formed to help with challenging MCA cases. We use strategic approaches, like challenging the validity of the MCA agreement or arguing that the terms were unconscionable. The consequence is that the lender may need to renegotiate, reduce the total debt, or dismiss the case entirely.

Below is a simplified flow chart that outlines typical steps for obtaining MCA loan relief:

Example 1 -> MCA Debt -> Situation A -> Slow Payments -> Cause 3 -> Default Action

This means if you are behind on payments, the result is that your MCA provider might initiate a default action that can lead to a lawsuit. We then step in to create a defense plan that was crafted to reduce your liabilities.

KNOW THE POTENTIAL LEGAL CONSEQUENCES

1. Default Judgment
   A default judgment that was entered against you can allow the lender to seize your bank accounts and future receivables. The consequence is that you lose control over your cash flow, which can make it impossible to keep your business running.

2. Criminal Penalties
   Fraud is a serious crime that can arise if any false information was provided in your MCA application. The consequence is that you may face investigations by agencies like the Federal Trade Commission (https://www.ftc.gov) or the Consumer Financial Protection Bureau (https://www.consumerfinance.gov) for deception or unfair practices. If you are found guilty, you could face fines, probation, or even jail time depending on the severity.

3. Civil Penalties
   An MCA that was structured with outrageous rates can sometimes be challenged as usurious in certain jurisdictions. The consequence is that you could be tied up in expensive litigation, and if the court rules the contract unlawful, you might owe penalties or be forced to repay additional fees.

GOVERNMENT AGENCIES THAT MIGHT HELP

• Small Business Administration (SBA) at https://www.sba.gov
• Consumer Financial Protection Bureau (CFPB) at https://www.consumerfinance.gov
• Federal Trade Commission (FTC) at https://www.ftc.gov

These agencies that were formed by the federal government offer information on unfair lending practices, which can be used to show that the MCA agreement was exploitative. The consequence is that you gain leverage in negotiations, because you can cite official guidelines and possibly file complaints.

STRATEGIES FOR OBTAINING MCA LOAN RELIEF

1. Negotiate a Reduced Balance
   A balance that was too large to manage can sometimes be restructured. The consequence is that you might pay less overall and get more time to repay. Our team speaks directly to MCA providers, showing them your financial documents and explaining that a compromise is better than forcing you into default.
2. Request Longer Repayment Terms
   A short repayment term that was imposed by the MCA company can be changed if you demonstrate hardship. The consequence is that you could maintain your working capital, keep paying employees, and stabilize your operations.
3. Consider Debt Consolidation
   Debt consolidation that was set up properly can combine all your MCA or other high-interest loans into one manageable monthly payment. The consequence is that your interest rate may be reduced, and your overall stress level goes down.
4. Dispute Unfair or Misleading Terms
   An MCA agreement that was vague or misleading can sometimes be thrown out or renegotiated. The consequence is that your lender might lose a legal right to collect the full amount, or might be forced to settle for a lower payment.

TABLE: COMMON MCA COMPLICATIONS VS. POSSIBLE DEFENSES

MCA Complication	Possible Defense
Confession of Judgment (COJ) that was used to freeze accounts	Argue that COJ was not properly disclosed or is unenforceable
Excessive Interest or Factor Rate that was misleading	Challenge contract as usurious or unfair under state laws
Misrepresented Repayment Terms that were hidden in fine print	Claim fraudulent inducement or lack of clear disclosure
Aggressive Collection Tactics that were used prematurely	File complaint with FTC or CFPB for unfair practices

Each complication listed above can lead to severe financial stress. The consequence is that your business might become unprofitable and shut down. That’s why it’s crucial to know your defense strategies.