You just missed your MCA payment, and it feels like the clock just started ticking. What happens if you do nothing? How long will it take before the funder sues you? Funders can move quickly - and a New York case from December 2025 shows it. The funder sued just two weeks after the owner’s final missed payment. Then, less than three weeks after the owners answered, the funder moved for summary judgment, which it went on to win.
Main St. Merchant Servs. V Victorian Rest. & Tavern
The case is Main St. Merchant Servs. v Victorian Rest. & Tavern, from Kings County. The restaurant owners signed two receivables purchase agreements. Under the first, the funder purchased $94,430 of future receivables in exchange for a payment of $71,000. Under the second agreement, the funder purchased $58,758 of future receivables in exchange for a payment of $42,000. An individual guarantor signed on for everything the businesses owed. The funder said the owners let four or more rejected ACH debits pile up, and that this broke both deals: On August 1 and September 5, the restaurant owners broke the terms of the second agreement. On September 9 and 16, the restaurant owners broke the terms of the first agreement. The restaurant owners were sued on September 30, two weeks after the last bounced payment.
Now picture yourself as that owner. The funder sues you for breach of a contract you signed, for breaching your personal guarantee, and for unjust enrichment. The funder wants its attorney’s fees. You answer on October 28. Then, on November 14, the funder moves for summary judgment. It has the signed agreements, proof it funded, and proof of default. It also has a sworn affidavit from its Director of Risk Management, who based it on the company’s business records and remittance history.
You argue that the funder didn’t lay a proper foundation for its default records and payment, that it didn’t prove that it paid you, that it hadn’t established which funds in the account were “business sales receivables” as required under the contract, that it offered no evidence in support of its default fee, and that it confused its claim for breach of contract with unjust enrichment. And the Court said no to all of that: once the funder produced the agreements and funding and evidence of default, it was up to you to show a triable issue of fact, and you couldn’t. Nor was the default fee provision (the default fee was a liquidated damages provision in the agreements) unconscionable or against public policy, so it was enforceable.
Summary Judgment in Lieu of Complaint
And this funder took the slower road. New York has a speedy method called CPLR 3213, known as “summary judgment in lieu of complaint.” Put in the funder’s terms: If you have an instrument for the payment of money only (a promissory note or an unconditional guarantee), you file a summons with a motion for summary judgment instead of a complaint. The court can decide quickly whether you have a valid claim based only on the document. No need to wait for the defendant to file an answer. The downside is that you have to serve the papers exactly like a summons. You need to give the defendant at least as many days to answer as the summons would allow (typically 20 or 30 days depending on the method of service). If you mess up service, especially with defendants out of state, those who run from service, or entities with complicated registered agent arrangements, the motion can fail. Many plaintiffs avoid this by filing a complaint and using CPLR 3212, which is more flexible.
The Takeaway
So, to answer the question in the title: What happens if you do nothing? The clock starts. How long until the funder sues? In the Main Street case, two weeks. How long until the funder moves for summary judgment? Less than three weeks after your answer. The court issued its decision on the motion a year after it was filed.
For you, the owner, the takeaway is that you can be sued for unpaid MCA payments surprisingly fast. When you run past the due date of your MCA payment, your clock isn’t just ticking, it’s already started. If you signed a personal guarantee, the funder can sue you personally, not just the company. It’s not just the business that’s on the hook, it’s you. The burden shifts: once the funder shows the agreement, funding, and default, it is on you to show a real fight over the facts, and the owners here could not. And a default fee written into the contract may be enforced, as it was here. Don’t let your next bounced payment become your lawsuit. If you’re close to default, act now.
At Delancey Street, we are a business debt settlement company. Delancey Street negotiates with MCA funders and lenders for less than the full balance owed; we don’t sell another loan. We are not a law firm; if litigation or bankruptcy is the right call, we refer the owner to a vetted independent attorney. The first consultation is free and confidential, and if a cheaper option exists we say so on the first call. Whatever the amount or the claim against you, we’re here to give you a realistic picture and options.
