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 have helped many business owners settle MCA debt. 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. MCAs are generally structured as commercial deals, so the 36% cap usually doesn’t apply to them.
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, it often says governed by New York law.
That’s common in MCA contracts. They are often written so disputes land in New York courts no matter where your business is located. Delancey Street is based in 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, disputes often turn on whether the agreement is enforceable:
- Is it a loan or a purchase. MCAs are structured as a sale of future receivables, which generally keeps them outside usury caps. 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 a “purchase” is really a disguised loan, usury law may apply to it.
- Confessions of judgment and out-of-state businesses. Here’s a rule that matters for Illinois businesses. 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 revenue has fallen, gather recent financial statements and discuss potential payment adjustments with your funder. Independent counsel can explain any reconciliation provision. Many MCA agreements include one, and terms vary. Whether a funder has followed that clause is a legal question for independent counsel. Either way, keep good records: proof your revenue went down, the bank statements you sent the funder, and every response you got back.
