We’re Delancey Street, a New York business debt relief firm that does one thing, we solve MCA wreckage, deal with stacked MCA positions, and the daily ACH that’s taking more than the business makes. We’ve settled north of $100M. We are not a law firm.
Here’s the thing nobody selling you settlement wants to say out loud.
Illinois has no MCA disclosure law
You’ve probably seen a dozen blog posts on the internet that are referencing the “Illinois Merchant Cash Advance Reform Act.” That act does not exist. What exists is a bill, SB 2234, the Small Business Truth in Lending Act, and it has been getting strangled in committee for three years running. It passed the Illinois Senate 36-19 in May 2024 and then the House Financial Institutions Committee just... didn’t call it for a vote. No explanation. It died at session sine die in January 2025, got reintroduced, passed the Senate again, and it’s still not law.
Many business debt settlement companies are going to try and convince you there are laws that protect you, but it’s just not the case. The one thing Illinois did pass, is the Predatory Loan Prevention Act with its 36% APR cap, and it’s a consumer law. Your MCA is different. The 36% cap doesn’t touch it.
And here’s the part that actually matters
Find your agreement, it probably came from DocuSign. If you look and find the governing law clause, usually buried near the signature block, you’ll find it says governed by New York laws.
That’s the whole MCA playbook - they write the paper so disputes land in New York courts no matter where your business is located. Delancey Street, to your advantage, is based out of NYC. This means the Illinois disclosure debate, the one that keeps dying, is upstream of your problem.
The leverage that’s real
Forget the disclosure laws, etc. In practice when you’ve got multiple positions, the fight is over whether the thing is even enforceable:
- Is it a loan or a purchase. MCAs avoid usury caps by calling themselves a sale of future receivables. What this means is lenders are taking a % of your revenue, as a fixed daily ACH or weekly ACH. Courts look at whether reconciliation actually was working as written, the conduct matters, whether there’s real risk of loss to the funder, whether the term is indefinite. If a New York court decides your “purchase” is a disguised loan, the entire MCA can come apart.
- Confessions of judgment - you may be better off than a New York merchant. Here’s a quirk that helps Illinois businesses specifically. New York restricted COJs against out-of-state borrowers back in 2019. A funder generally can’t walk into a New York court and get an instant uncontested judgment against your Illinois company the way they could against a Brooklyn deli.
- UCC 9-406 and your customers. Once you default on the MCA, the funder can send notices to your customers under UCC 9-406 telling them to pay the funder directly. This is the move that wrecks Illinois businesses operationally, not the daily debit, the phone call to your biggest account. Lenders use UCC liens in order to protect the money they gave you. The minute you took the MCA, you gave them permission to file a UCC lien against your business. This is part of the ways they protect themselves. Remember, the MCA lender bought a % of your future receivables, and those receivables are blanket covered by UCC liens.
If you are in a situation where your revenue is going down, the first step to take is to exercise the reconciliation clause. This is a clause in your agreement that is part of your rights. If the lender does not honor the reconciliation clause, then the lender is in default of the agreement. This gives you strategic leverage if this lands in court. The goal is alway to make the lender default first, and show they are not acting in faith. The burden of proof lands on you, that your revenue went down, that you submitted bank statements to the lender documenting this, and that the lender ignored your requests, or refused, despite the fact the documentation shows a clear decline in revenue.