So you took out a merchant cash advance (MCA) to help your Baltimore business, and now you’re struggling to keep up with payments. Don‘t panic – you have options. Hiring an experienced Baltimore merchant cash advance attorney can help you find a solution, whether that’s negotiating a settlement, defending against a lawsuit, or pursuing legal action against a predatory lender. This article will explain everything you need to know about MCA debt relief and how a lawyer can help.
A merchant cash advance provides businesses with quick access to capital in exchange for a percentage of future credit card sales. It works like this:
Unlike a small business loan, MCAs don‘t have fixed monthly payments or strict eligibility requirements. However, the equivalent APR is often exorbitantly high, sometimes exceeding 200%.
While MCAs provide fast financing for struggling businesses, they are largely unregulated. Many companies engage in predatory tactics, including:
This can trap merchants in a cycle of debt. If you’re facing legal action from an MCA provider, don’t go it alone. Contact an attorney for help defending your rights.
If you‘re overwhelmed by MCA debt, a Baltimore merchant cash advance attorney can pursue multiple strategies to find a solution, such as:
Your lawyer may be able to negotiate with the MCA company to lower your payments to an affordable amount. This avoids default or legal action.
If the terms of your MCA contract are unfairly one-sided, your attorney can argue they are “unconscionable” under Maryland law. This may invalidate all or part of the agreement.
By calculating the effective APR, your lawyer may be able to prove your MCA‘s interest rate exceeds Maryland‘s usury cap. This can void the contract completely.
Your attorney can negotiate a lump-sum settlement to resolve your MCA debt for a fraction of what you owe. This provides immediate financial relief.
Filing for bankruptcy may discharge all or part of your MCA debt. Your lawyer can advise if this is the best option.
If you‘re sued for nonpayment, your attorney can represent you in court and advocate for your best interests.
You may have grounds to pursue legal action against an unscrupulous MCA company for violations like fraud.
Many MCA contracts contain “confessions of judgement” or “COJs”. This gives lenders the right to seize your assets without notice if you default. COJs are banned in some states but still common in Maryland. Never sign one without understanding the risks and consulting a lawyer.
If you decide to hire legal help for your MCA debt, here are some questions to ask prospective attorneys:
Avoid any lawyer who guarantees they can completely erase your MCA debt. Reputable attorneys will discuss realistic outcomes based on your circumstances.
Don’t let predatory MCA lending practices put your Baltimore business at risk. The experienced Maryland MCA debt relief attorneys at [Law Firm Name] are here to help. We understand the MCA industry and how to protect your rights. Contact us online or call [phone number] for a free consultation.
A merchant cash advance provides businesses with quick financing by purchasing a percentage of the company‘s future credit card sales. The business receives an upfront lump sum and repays it as a fixed percentage of daily credit card receipts. MCAs are advances, not loans, so they are largely unregulated.
MCAs are very expensive compared to traditional small business loans. The equivalent APR often exceeds 100%, sometimes reaching over 200%. The total cost depends on the payback period. MCA companies take a fixed percentage of daily credit card sales, so the longer it takes you to repay, the more you pay in fees.
Since MCAs are unregulated, some providers use predatory tactics like misrepresenting terms, charging excessively high rates, aggressive collections, and lawsuits. Many MCA contracts contain “confessions of judgement” allowing lenders to seize assets without notice. This can trap borrowers in debt.