Fresno Merchant Cash Advance Attorney: Your Guide to MCA Debt Relief
Merchant cash advances (MCAs) have become an increasingly popular form of alternative business financing in recent years. Unlike traditional bank loans, MCAs provide fast access to capital without requiring strong credit or collateral. However, MCAs come with some major drawbacks that can put business owners in Fresno and throughout California at risk of falling into a debt trap.If you took out an MCA and are now facing legal issues or struggling to make the aggressive daily or weekly payments, you may be wondering – do I need to hire a Fresno merchant cash advance attorney?This guide will explain everything you need to know about MCAs, your rights as a business owner, and how working with a qualified lawyer can help you resolve MCA debt and get your finances back on track.
What is a Merchant Cash Advance?
A merchant cash advance provides an upfront lump sum payment to a business in exchange for a percentage of future credit card sales over a set period of time.Rather than a loan, MCA companies consider it a purchase of your future receivables. There is no set repayment schedule. The MCA provider withdraws a fixed percentage of your daily or weekly credit card sales from your merchant account until the balance is repaid in full, plus fees and interest that can amount to an equivalent APR of 60-500%.At first glance, MCAs seem like “easy money” for small business owners who don’t qualify for traditional financing options. But in reality, the terms are often predatory and can wind up costing way more than a reasonable loan.
-The Downsides of Merchant Cash Advances
While MCAs provide quick access to capital, there are some major downsides to be aware of:
- Aggressive Repayment Terms – MCA payments are taken directly from your merchant account on a daily or weekly basis. This can make it difficult to cover existing operating expenses and maintain positive cash flow.
- Deceptively High Costs – MCA companies quote the cost of financing as a factor rate rather than an interest rate. But the equivalent APR is typically exorbitant.
- Personal Liability – MCA contracts often require a personal guarantee, so the business owner is on the hook if the MCA can’t be repaid in full.
- No Regulations – MCAs are not considered loans, so they are not subject to usury laws or other regulations that limit how much interest can be charged.
As you can see, MCAs can quickly spiral out of control if sales drop and you can’t keep up with payments. Many businesses have been forced into bankruptcy after failing to repay their MCA debt.
Your Rights As A Business Owner
Because MCAs operate in a regulatory gray area, some providers use predatory tactics and onerous contract terms. However, there are still certain rights you have as a borrower.Some key protections include:
- Usury laws – Even if an MCA doesn’t meet the definition of a loan, usury laws may still apply if the equivalent interest rate is above your state’s legal limit.
- Unfair contract terms – If the MCA contract includes confusing language, lacks transparency about rates/fees, or requires unreasonable provisions like waiving your right to a jury trial, those terms may be unenforceable.
- Deceptive practices – MCA companies cannot make false statements or fail to disclose important info about repayment terms and costs. This is considered a deceptive business practice.
- FDCPA protections – If the MCA provider sells your debt to a third-party debt collector, you gain certain rights under the Fair Debt Collection Practices Act.
While MCAs themselves are still largely unregulated, you have protections under existing laws.
-When To Contact A Merchant Cash Advance Attorney
If you’re facing legal issues related to an MCA, it’s important to speak with a business attorney right away. An experienced lawyer can help in situations like:
- You’ve defaulted on your MCA and are facing threats of a lawsuit or UCC lien
- You need to restructure your MCA into more affordable payments but the provider refuses
- You believe the MCA company has violated laws or regulations
- An MCA debt collector is engaging in harassment, deception, or unfair practices
- You need to close your business but still owe a balance on the MCA
- You’ve been sued for breach of contract related to the MCA
The consequences of defaulting on an MCA or struggling to make payments can be severe. Don’t wait to seek legal guidance. A merchant cash advance attorney can assess your situation and help protect your rights.
How Can A MCA Attorney Help?
Here are some of the ways an experienced business attorney can assist if you’re dealing with MCA debt:
- Review your MCA contract – Identify any unfair, deceptive, or legally unenforceable terms.
- Renegotiate repayment terms – Work with the MCA provider to restructure your payments into something more affordable.
- Defend against lawsuits – Respond to any breach of contract claims and fight judgments or UCC liens.
- File counter claims – If the MCA company violated laws, file legal claims against them for damages.
- Settle debt for less – Negotiate with the MCA provider to settle your outstanding balance for less than you owe.
- Explore bankruptcy – Filing for bankruptcy may discharge some or all MCA debt and stop collections activity.
- Stop harassment from collectors – Ensure debt collectors follow all applicable laws and regulations.
- Close business gracefully – Develop a strategy to wind down operations while dealing with outstanding MCA debt.
Having an attorney on your side can help you gain control over the situation, limit further legal/financial damage, and resolve MCA debt through the best possible outcome.
4 Tips for Hiring a Qualified MCA Attorney
If you decide to move forward with legal representation for your MCA issues, make sure you choose an attorney who is truly qualified to help. Here are 4 tips:
-- Find an attorney experienced with MCAs – Debt relief experience isn’t enough. Look for lawyers with specific merchant cash advance experience.
- Choose someone local – Hire an attorney licensed and located in your state who understands applicable state laws.
- Ask about fees – Get fee structure and payment expectations in writing upfront. Avoid lawyers requesting payment upfront.
- Look for empathy & sincerity – You want an attorney who cares about more than just your case. They should treat you with compassion.
Don’t just hire any lawyer you find online. Vet them thoroughly first and make sure they have the MCA expertise to give your case proper attention.
Alternatives to Hiring an Attorney
While legal representation is usually the best option if you’re facing serious MCA debt issues, there are some alternatives to consider:
Debt Settlement Company
A debt settlement firm negotiates with creditors to settle debts for less than the full amount. This avoids bankruptcy or litigation. However, it may damage your credit and doesn’t stop collections calls. Settlement firms also can’t provide legal defenses.
-Credit Counseling Agency
Non-profit credit counseling provides education and debt management plans. They help consolidate debts into one payment and negotiate lower interest rates. This won’t discharge or reduce the principal owed, but can make monthly payments more affordable.
Bankruptcy
Filing for bankruptcy stops collections activity and can discharge qualifying business and personal debts. However, it damages your credit badly. Bankruptcy can be a last resort if no other options exist, and it still benefits from attorney guidance.While these alternatives may help in certain situations, none provide the full range of legal protections and resolution strategies available through an experienced MCA attorney. Carefully weigh the pros and cons for your specific circumstances.
Finding MCA Debt Relief in Fresno, CA
If you took out a merchant cash advance in Fresno or anywhere in California and now face legal action or unmanageable debt, time is of the essence. The sooner you can get qualified legal help, the more options will be available to resolve your situation in the best possible manner.Don’t struggle alone with harassing collections calls, mounting fees, lawsuits, and business disruptions. Know your rights and explore debt relief solutions with an experienced Fresno MCA attorney. They can remove the stress of dealing directly with predatory MCA companies and guide you through the most favorable outcome.With customized guidance and tenacious legal representation, you can regain control of your finances and save your business. Don’t wait – consult with a Fresno MCA lawyer today to discuss your situation completely free of charge. There are ways out of the MCA debt trap – you just need the right legal strategy on your side.