There are hundreds of merchant lenders willing to give you money while putting you on an unsustainable repayment schedule. If you have received an advance from an MCA firm and need legal assistance or assistance, contact Business Debt Law Group today. A merchant cash advance remains one of the most devastating lending instruments available to businesses with limited liquidity. Instead of providing the company with the necessary funds, the MCA consumes the company`s income and cash until ACH repayments (daily or weekly) become prohibitive and inevitably impossible to repay. An admission of judgment deprives you of the right to defend yourself before a judge if you default or stop paying your dealer advance. You agree that a judgment against you will be rendered without notice and you allow MCA to skip the normal legal process that would be necessary to file a judgment. MCA decides what the factor rate will be by checking bank statements showing the number of monthly deposits, the amount of these deposits, the number of days they have not received deposits and the number of other advances available to the trader. You can expect to receive more calls from brokers trying to get you to accept more advances. In a process called stacking, other MCA backers may contact you to try to get you to add new advances to your existing advance in a scheme to get out of debt. Money can come quickly, but what small business owners don`t realize is that they may be preparing for eventual bankruptcy. If you`ve received an advance from a merchant cash lender and are now struggling to resolve your situation, you`ll need an experienced cash advance lawyer by your side.
Many people think that the consequences of the 2008 financial crisis were when traders` cash advances increased, but this is not true. People find the practice of usury inhumane and tasteless, there are others who believe that companies should be free to take advantage of legal nuances and at the expense of small businesses. Your business information becomes public after a lien has been placed on you. This information is then compiled and sold to other MCA backers who will try to entice you to accumulate your advances, which in most cases only puts your livelihood at risk and puts you in more debt. As part of the process, a lender will typically require a person to provide businesses with merchant processing records and bank statements to determine the amount of an advance for which they are eligible. In addition, a credit check may be required to qualify. We understand that this is a confusing and stressful time for you. Let us take the burden off your shoulders. Before you freeze or seize bank accounts, deposit UCC privileges against merchants/sellers, or file a lengthy lawsuit against you that would require you to spend countless hours and money, call us today for a free consultation with an experienced corporate debt attorney. We`re here to help you wherever we can. MCA lenders are quick to sue borrowers who have defaulted on their payments, so it`s important to consult a lawyer immediately if you`ve defaulted or think you`ll default on a payment.
If you`re having legal issues with the dealer cash advance, if you`ve defaulted on the contract with the cash advance, or if you need an MCA restructuring to support your cash flow, call us today. ACMs are known to have annual effective rates – the total cost of a loan, including all fees – sometimes in excess of 300%. Many will argue that these advances fall within the definition of predatory lending. These exorbitant fees can lead to serious cash flow problems for traders. A debt collection agency may have approached you to demand that you pay the full balance of the alleged debt. Even worse, the lender may exercise a lien under the Uniform Commercial Code (UCC) against your business to prevent other companies, insurance companies or individuals from paying you the amounts owing. “Federal courts have conducted a more thorough and detailed review of merchants` prepayment agreements, reviewed the agreement holistically and comprehensively, and the conclusions they have reached are compelling,” said New York Supreme Court Justice Leon Ruchelsman. Merchant cash advances emerged during the 2008 credit crunch, when banks refused to lend to most small businesses. Instead of lending a sum of money over a period of time, a merchant cash advance company buys future receivables from your business that go into your merchant account. The key to understanding disputes in these cases is how an ACM differs from traditional loans and lines of credit, which are defined by the risk of the buying company. For example, it would potentially be a criminal offence for the MCA lender to execute a COJ simply because the small business owner does not transfer the debts that the merchant`s cash advance company purchased because the small business owner did not generate debt.
In 1998, a company called AdvanceMe (now CAN Capital) pioneered credit card splitting. AdvanceMe monopolized the merchant cash advance industry because they owned the split finance patent (now known as the merchant cash advance). If you answered “YES” to any of these questions, our merchant cash advance assistance lawyers can help! Through negotiations, we can restructure your advance to make it more affordable or offer a reduction in the principal balance owing through settlement negotiations and merchant cash advance debt relief. Merchant cash advances can be very expensive. Not only is the interest rate often very high (and difficult to understand), but there are often hidden fees that can significantly increase the amount a small business is supposed to repay. Many ACMs have personal guarantees that entice many business owners with little personal wealth to declare personal bankruptcy. If you are an entrepreneur and wish to declare personal bankruptcy, your obligation to repay the advance will be fulfilled; However, responsibility for the transaction remains. The prepayment company can assert its claim on any collateral pledged to secure its funds – by forfeiture or redemption of business assets. When you declare bankruptcy, it`s important to determine if your business can still operate and operate on a day-to-day basis.
Among the many other factors that need to be discussed, ranging from the MCA company is how long the trader is in business and what sector he is in. The higher the risk, the higher the defined factor. If, instead of hiring a law firm experienced in corporate debt relief, you hire a regular debt settlement firm to process your merchant cash advance, they will NOT be able to give you legal advice.