Nebraska Merchant Cash Advance Attorney
Merchant cash advances have become an increasingly popular form of financing for small businesses in Nebraska. Unlike traditional bank loans, merchant cash advances provide quick access to capital based on a percentage of future credit card sales. However, some Nebraska business owners have found themselves struggling with excessive fees, high repayment rates, and predatory lending practices associated with merchant cash advances. If you are facing legal issues related to a merchant cash advance in Nebraska, hiring an experienced attorney can help protect your rights.
How Merchant Cash Advances Work
A merchant cash advance is a form of financing in which a lender purchases a portion of a business’s future credit card receivables at a discount. For example, a merchant cash advance company may provide a business with $100,000 in capital in exchange for 15% of the business’s credit card sales until $150,000 is repaid.The merchant cash advance company then collects a fixed percentage of the business’s daily credit card receipts via automatic withdrawals from the merchant account. There is no set repayment schedule – the business simply repays the advance as credit card sales come in. This flexibility can be helpful for businesses with irregular cash flow but also means the total repayment amount is variable.
-Common Legal Issues with Merchant Cash Advances in Nebraska
While merchant cash advances provide easy access to capital, they also come with significant legal risks that Nebraska business owners should be aware of:
- Excessively high interest rates – Some merchant cash advance companies charge interest equivalent to over 100% APR, which may be illegal under Nebraska usury laws.
- Deceptive marketing practices – Companies may misrepresent repayment terms, total costs, or eligibility requirements. This can be considered predatory lending.
- Confusing contract terms – The contracts often contain complex terminology that the average small business owner may not fully understand.
- Aggressive collection tactics – Some companies will harass business owners or engage in illegal practices when payments fall behind.
- Excessive fees – Companies may charge extortionate origination fees, underwriting fees, or other hidden costs.
These issues have led to lawsuits against some merchant cash advance companies operating in Nebraska. However, oversight remains limited compared to regulation of conventional bank loans.
Defenses Against Merchant Cash Advance Lawsuits
If you are facing legal action from a merchant cash advance company in Nebraska, an attorney can help you understand and assert possible defenses such as:
- Unconscionability – Argue the agreement is unfair and one-sided.
- Usury – Claim the interest rate exceeds Nebraska’s statutory limits.
- Deceptive practices – Allege the company misrepresented key terms.
- Breach of contract – Claim the company did not fulfill obligations.
- Duress – Argue you were under unfair pressure to sign.
- Inaccurate statements – Dispute reported balances or fees.
An attorney can review your case and determine which defenses are viable. They can also negotiate a settlement or payment plan if warranted. Do not ignore legal notices from merchant cash advance companies – get professional help responding.
-Finding a Nebraska Merchant Cash Advance Attorney
If you need legal assistance related to a merchant cash advance in Nebraska, look for an attorney experienced in commercial litigation and financial services law. Ask about their specific experience with merchant cash advance cases. It helps to find a local attorney familiar with Nebraska courts.Here are some tips for finding a qualified Nebraska merchant cash advance attorney:
- Search Nebraska State Bar Association directory for commercial litigation lawyers.
- Look for lawyer review sites and directories online. Research attorneys’ backgrounds.
- Ask other local business owners for referrals.
- Contact consumer advocacy groups for recommendations.
- Interview lawyers and discuss your case specifics.
- Consider attorneys who offer free consultations and flexible fee options.
- Verify the lawyer is licensed and in good standing with the Bar Association.
- Choose a lawyer you’re comfortable with and trust.
Having an experienced attorney on your side can help maximize your chances of a favorable outcome when challenging a merchant cash advance company in Nebraska. Don’t let predatory lending practices go unanswered – know your rights.
Frequently Asked Questions
What are some warning signs of a predatory merchant cash advance?Warning signs include interest rates over 50%, lack of clear contract terms, requiring access to bank accounts, excessive fees, and aggressive collection tactics. Legitimate companies are transparent about costs.What happens if I just stop making payments on a merchant cash advance?The company will likely sue you and/or pursue collection through aggressive tactics. It’s best to consult an attorney to understand your options, which may include negotiating a settlement. Simply defaulting could seriously harm your business.Should I just take out another merchant cash advance to pay off the first one?No, this will just compound your debt and fees. Look at alternatives like working with an attorney to renegotiate terms or restructuring your business to improve cash flow organically.What information should I gather if consulting with an attorney about merchant cash advance debt?Provide your contract, statements, correspondence with the company, bank records, and documentation of any improper practices. This helps the attorney fully assess your situation.Can an attorney help me if there is already a judgment against my business from a merchant cash advance company?Yes, depending on the circumstances an attorney may be able to vacate the judgment, reduce the amount owed, or work out a settlement. But act quickly once a judgment is entered.
Conclusion
Merchant cash advances can provide fast access to capital but also come with legal risks like excessive costs and predatory lending practices. If you are a Nebraska business owner facing issues with a merchant cash advance, partnering with an experienced attorney can help protect your rights. Be proactive about responding to legal notices and know your defense options. With professional help, you may be able to achieve a fair settlement and move forward with your business.