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Boston Merchant Cash Advance Lawyers and Business Debt Relief

Running a small business can be extremely difficult, especially when it comes to managing finances and cash flow. Many business owners in Boston turn to merchant cash advances to help ease some of their financial burdens, but these loans can also create legal issues that require the expertise of experienced attorneys. This article will provide an overview of merchant cash advances, common legal issues surrounding them, and how Boston business lawyers can help.

What is a Merchant Cash Advance?

A merchant cash advance (MCA) is a form of business financing where a company sells a portion of its future credit card sales in exchange for an upfront lump sum payment. Essentially, MCA companies provide capital in exchange for a fixed percentage of future credit card receivables until the advance has been paid back in full, plus fees and interest.Unlike traditional small business loans, merchant cash advances do not feature set repayment schedules. Instead, the borrowing business makes payments by allowing the MCA company to withdraw daily payments from their credit card processing account. Payments are taken as a percentage of daily credit card sales, typically ranging from 10-20%.

Why Do Businesses Use Merchant Cash Advances?

There are a few key reasons why small businesses may opt for a merchant cash advance rather than a conventional bank loan:

  • Faster funding – MCAs can provide funding in as little as 24-48 hours, while bank loans can take weeks or months to secure. This quicker access to capital can be invaluable for businesses with urgent cash flow needs.
  • Flexible payments – Repayment amounts fluctuate based on daily credit card sales volumes. This structure helps accommodate seasonal sales fluctuations that small businesses often experience.
  • Easier to qualify – MCA approval decisions emphasize credit card processing history over personal credit scores. This helps businesses unable to qualify for bank loans gain access to financing.

Risks and Common Legal Issues with Merchant Cash Advances

While merchant cash advances offer useful benefits, they also come with considerable risks and legal complications, including:

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Excessively high interest rates

MCAs are often extortionately expensive, with some featuring annual percentage rates exceeding 200%. These egregious rates are often obscured by a lack of clear fee disclosures and can cripple cash-strapped businesses.

Deceptive sales tactics

Many MCA providers use high-pressure and deceptive sales tactics to push expensive advances on unsuspecting businesses. Some misrepresent repayment terms or fail to disclose total costs. These predatory practices may violate consumer protection laws.

Aggressive collections

MCA providers are notoriously aggressive with collections, continuing to siphon high percentages of sales even after taking exorbitant interest and fees. Some go so far as to threaten or actually sue merchants over non-payment.

Violations of state laws

Many states have laws capping maximum interest rates or governing loan disclosure requirements. MCA companies frequently skirt these laws and lure in merchants with illegal financing offers.As you can see, the MCA industry is rife with predatory actors happy to take advantage of cash-strapped small business owners through legally dubious practices. If you feel your business has been wronged by an MCA provider, contacting a qualified business attorney is crucial to protect your interests.

How Can a Boston Business Lawyer Help?

Boston has no shortage of business lawyers ready to assist local merchants combat predatory merchant cash advances. They can provide services including:

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Reviewing MCA agreements

Experienced attorneys can carefully analyze MCA contracts to identify exploitative clauses and ensure full compliance with Massachusetts laws governing business financing. This protects you from agreeing to illegal terms hidden in the fine print.

Advising on litigation strategy

If an MCA provider has already ensnared your business in an abusive arrangement, an attorney can map out litigation approaches to fight back. They can also defend against aggressive collections lawsuits levied against your company.

Negotiating settlements

In many cases, negotiating a settlement with an MCA company presents the best path forward for a struggling business. An attorney serves as an experienced intermediary, working to secure the most favorable settlement terms for the merchant.

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Recovering damages

For businesses victimized by particularly egregious MCA scams, filing lawsuits to recoup losses may be warranted. Qualified legal counsel can build strong cases demonstrating damages from predatory lending practices. If successful, these suits can recover all extracted payments and related financial harm inflicted on the business.

Finding the Right Boston Merchant Cash Advance Lawyer

As the MCA industry continues proliferating, more and more Boston small businesses will likely have need for legal services. When searching for counsel, keep the following tips in mind:

  • Ask about experience handling MCA cases – This is a highly specialized field, so verify that prospective lawyers carry expertise directly applicable to your situation.
  • Discuss fee structures – Every firm charges differently, so understand billing details upfront before retaining counsel. Some lawyers work on contingency, taking a percentage of recovered damages as payment.
  • Look for passion – The lawyer you choose should demonstrate authentic concern for the plight of local small businesses harmed by predatory MCA companies. This personal investment often drives the best results.
  • Check credentials – Only work with currently licensed lawyers in good standing with the Massachusetts Bar Association. Unqualified or unscrupulous attorneys may further complicate your situation.
  • Read reviews – Check sources like GoogleYelp, and Avvo to gauge client satisfaction levels of potential hires.

By thoroughly vetting counsel candidates with the above criteria, you can identify reputable Boston MCA lawyers ready to help your business address merchant cash advance disputes. Don’t hesitate to leverage their expertise as soon as any legal concerns emerge.

Final Thoughts

As useful of a financing mechanism merchant cash advances represent for cash-strapped small companies, they unfortunately also provide opportunity for predatory lending practices that can severely harm Boston businesses. If your company feels unfairly treated or endangered by an MCA provider, contacting qualified legal counsel should become an urgent priority. Experienced Boston business lawyers specializing in MCA cases can help review contracts, negotiate settlements, and pursue litigation to rectify your situation. With their assistance, justice has a much better chance of being served, providing your company the relief it deserves. Don’t wait to enlist the support of specialist counsel at the first sign of legal trouble.




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