New York Merchant Cash Advance Lawyers: Protecting Your Business
You’re a hard-working entrepreneur; you’ve poured your heart and soul into building your business. But sometimes, things don’t go as planned – and you find yourself in need of legal help. That’s where we come in. Our merchant cash advance lawyers are here to fight for you and your company.
What is a Merchant Cash Advance?
A merchant cash advance (MCA) is a type of financing that provides businesses with an upfront lump sum of cash. In exchange, the business agrees to repay the advance (plus fees) by allowing the lender to collect a percentage of their future credit card sales or revenue.MCAs are attractive because they’re relatively easy to qualify for – even businesses with poor credit can often get approved. But there’s a catch: the fees and repayment terms can be predatory and confusing. That‘s why it’s crucial to have an experienced MCA lawyer on your side.
-Common MCA Legal Issues
Merchant cash advance agreements are rife with potential legal pitfalls. Here are some of the most common issues our lawyers see:Misrepresentation and Fraud
- MCA companies sometimes misrepresent the true cost of the advance or use deceptive sales tactics. This could constitute fraud or violate consumer protection laws.
Usurious Interest Rates
- While MCAs aren’t technically “loans,” the effective annual interest rates can be astronomical – sometimes over 100%! These rates may violate usury laws in certain states.
Improper Withholding of Funds
- MCA lenders often have the ability to withdraw funds directly from a business’s bank account or credit card processor. Sometimes, they take out more than they’re entitled to.
Breach of Contract
-- MCA agreements are usually dense, one-sided contracts loaded with unfair terms. Lenders may breach these agreements in various ways.
Harassment and Threats
- When businesses fall behind on payments, some MCA companies resort to aggressive collection tactics like threats, intimidation, or even physical harassment.
Does any of this sound familiar? If you’re dealing with shady MCA practices, our New York lawyers can help. We’ve seen it all – and we know how to fight back.
How Our Lawyers Can Assist
Our merchant cash advance attorneys provide a range of legal services to protect businesses like yours. Here are just a few ways we can help:Reviewing MCA Agreements
- Before you sign anything, let us review the contract and explain the terms in plain English. We’ll make sure you understand what you’re getting into.
Negotiating Better Terms
- If an MCA deal seems unfair, we can negotiate with the lender to get you better rates, fees, and repayment conditions.
Defending Against Lawsuits
-- If an MCA company sues you for non-payment or breach of contract, our litigators will aggressively defend your rights in court.
Filing Counterclaims
- In many cases, we can file counterclaims against predatory MCA lenders for violations like fraud, usury, or illegal debt collection practices.
Obtaining Injunctions
- Our attorneys can seek court orders (injunctions) to stop MCA companies from withdrawing funds, repossessing assets, or engaging in harassment.
Settling Disputes
-- We’re skilled negotiators who can often reach favorable settlements to resolve MCA conflicts without costly litigation.
The bottom line? We’re not afraid to take on even the biggest, most aggressive merchant cash advance providers. Our top priority is protecting your business.H2: Why Choose Spodek Law Group?With so many law firms out there, why should you choose us to handle your MCA case? Here are a few reasons:
Proven Track Record
- Our attorneys have decades of combined experience taking on banks, lenders, and finance companies. We’ve secured millions in settlements and courtroom victories.
Tough Negotiators
- We’re not afraid to play hardball with MCA companies and their lawyers. Our attorneys are relentless negotiators who never back down.
Personal Service
- You’ll work directly with a senior partner attorney, not a paralegal or junior associate. We give each client the personal attention they deserve.
Reasonable Fees
- We understand that legal fees can be a burden, especially for small businesses. That’s why we offer affordable, transparent pricing on all our services.
No Upfront Costs
- We take MCA cases on a contingency basis, meaning you don’t pay anything unless we win your case and recover compensation.
So if you‘re tangled up in a messy merchant cash advance situation, don‘t go it alone. Let our battle-tested litigators fight for your rights and your business‘s future.
Understanding MCA Regulations
The merchant cash advance industry is largely unregulated at the federal level. However, there are some key laws and regulations that may come into play:
State Usury Laws
- While not technically “loans,” some courts have ruled that exorbitant MCA fees can violate state laws capping interest rates on loans.
FTC Act and State UDAP Laws
- The Federal Trade Commission Act and state unfair/deceptive trade practices laws prohibit misleading sales tactics and misrepresentations by MCA providers.
FDCPA and State Debt Collection Laws
- The Fair Debt Collection Practices Act and its state equivalents restrict the aggressive tactics some MCA companies use to collect payments.
Uniform Commercial Code
- Certain aspects of MCA agreements, like confessions of judgment, may violate provisions of the UCC governing contracts and commercial transactions.
The laws and court rulings around merchant cash advances are constantly evolving. That’s why it’s critical to have an attorney who stays on top of the latest legal developments in this area.Our lawyers closely monitor new MCA regulations and court decisions across the country. We use cutting-edge legal strategies to push the boundaries and establish new precedents protecting businesses.
Alternatives to Merchant Cash Advances
While merchant cash advances can provide fast working capital, they often come at an extreme cost with burdensome terms. Before getting trapped in an MCA nightmare, consider some of these alternative financing options:Bank Loans
- Traditional bank loans tend to have much lower interest rates than MCAs, though they can be harder to qualify for with poor credit.
SBA Loans
- The U.S. Small Business Administration partially guarantees loans from participating lenders, making them more accessible to small businesses.
Lines of Credit
- A line of credit from a bank acts like a credit card for your business, letting you draw funds only when needed and pay interest only on what you borrow.
Invoice Financing
- With invoice financing or factoring, lenders advance you cash based on your outstanding invoices, providing working capital without crippling fees.
Equipment Financing
- Loans and leases specifically for purchasing equipment, vehicles, or other assets your business needs.
Crowdfunding
- Websites like Kickstarter and Indiegogo allow you to raise funds directly from supporters and backers.
Our attorneys can advise you on which alternative financing options may be most suitable – and affordable – for your particular business situation.
Merchant Cash Advance Litigation Trends
Merchant cash advance litigation is on the rise as more businesses fight back against predatory practices. Here are some of the biggest trends we’re seeing:
Conflicting Court Rulings
- There have been contradictory rulings in different states over whether usury laws apply to MCAs and how to calculate effective interest rates.
Confusion of Usury Laws
- The vagueness of some state usury laws makes it difficult to determine if certain MCA fees and interest rates are permissible.
Attacks on Confessions of Judgment
- MCA contracts often contain “confessions of judgment” allowing lenders to win lawsuits automatically. These clauses are being challenged as violating due process.
Claims of Illegal Lending
- Some lawsuits argue that extremely high MCA interest rates mean the transactions should be considered loans subject to lending laws.
Deceptive Practices Allegations
- There’s been a wave of cases accusing MCA providers of misleading marketing, nondisclosure of terms, and outright fraud.
Our firm stays ahead of these key litigation trends to develop effective legal strategies on behalf of our clients. We relentlessly push for consumer-friendly rulings that rein in abusive MCA tactics.