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-Chicago Merchant Cash Advance Lawyers Can Provide Debt Relief
Running a small business in Chicago can be tough. Between keeping up with regulations, managing employees, and trying to grow your customer base, expenses have a way of piling up quickly. When cash flow gets tight, many business owners turn to merchant cash advances to bridge the gap. But while these financing options provide fast access to funds, they also come with high fees and strict repayment terms that can wind up causing more harm than good over the long run.If you took out a merchant cash advance loan and are now facing aggressive collection efforts from the lender, don’t panic. You have rights under Illinois law. An experienced Chicago merchant cash advance lawyer can help you understand all your options for finding relief from your business debt.
How Merchant Cash Advances Work
Unlike regular small business loans, merchant cash advance loans don’t come with fixed monthly payments. Instead, the lender takes a percentage of your daily credit card and debit card sales until the full loan amount plus fees and interest have been repaid. Typically the lender will withdraw between 10-20% from your merchant account each day via ACH transfer.Because payments fluctuate based on sales volume, there is no set payoff date for a merchant cash advance loan. However, agreements usually stipulate that the full amount must be repaid within 9-12 months.
The Problem with Merchant Cash Advance Loans
While the flexibility of making payments as a percentage of sales seems appealing at first, many business owners later find themselves overwhelmed by the repayment terms of merchant cash advances. Reasons these financing arrangements can quickly become problematic include:
- High interest rates – Merchant cash advances typically carry an annual percentage rate of 60-200%. At these rates, a $50,000 loan could wind up costing over $100,000 to repay.
- Short payback periods – Needing to fully repay the loan in less than a year puts considerable strain on cash reserves for most businesses.
- Daily debits from merchant account – Having 10-20% withdrawn daily, regardless of actual sales or profits that day, makes it incredibly difficult to cover operating expenses.
- Aggressive collections – When payments fall behind, lenders unleash aggressive collection efforts including harassing phone calls, lawsuits, and threats to contact customers about unpaid debts.
Facing collections on a merchant cash advance loan you can no longer afford to repay? Don’t let abusive lenders push you around. Get advice from an experienced Chicago small business debt relief attorney regarding your options.
-Legal Protections for Chicago Small Businesses
If you’re struggling to keep up with payments on a predatory merchant cash advance loan, know that Illinois law provides certain protections that can aid with debt relief.Potential defenses a knowledgeable lawyer may be able to assert on your behalf include:
- Unconscionability – If the terms of the agreement are unduly harsh or one-sided, courts have the power to void or reform the contract.
- Fraudulent inducement – If the lender misled you about key loan terms or failed to adequately explain fees, the contract may not be enforceable.
- Breach of contract – If the lender did not honor all promises made related to the loan, it may constitute breach of contract.
- Violations of lending laws – Failure to comply with state caps on interest rates or other consumer protection laws can invalidate the debt.
Rather than continuing to endure daily payments you can’t afford in order to satisfy an unlawful merchant cash advance agreement, partner with an attorney to analyze the validity of the loan and potential defenses. An experienced lawyer adept at dealing with merchant cash advance lenders may negotiate an affordable settlement or debt restructuring on your behalf. Or if defects in the loan itself exist, they may be able to get it invalidated in court so you face no further obligation to the predatory lender.Don’t let unlawful debts drag your Chicago small business under. Fight back with the help of a knowledgeable merchant cash advance lawyer. Reach out for a free case review to discuss your situation confidentially today.
What a Merchant Cash Advance Lawyer Can Do To Help
Specifically, a qualified Chicago small business attorney can provide assistance with merchant cash advance debt by:
- Reviewing the loan agreement – Analyzing the fine print to identify any unlawful terms, hidden fees, or instances of fraud.
- Assessing potential defenses – Determining if the contract fails to comply with Illinois lending laws or if other grounds exist to contest its validity.
- Negotiating with the lender – Leveraging identified weaknesses to negotiate reduced payoff amounts or alternate repayment plans.
- Restructuring finances – Helping rework budgets and cash flow to enable affordable merchant loan payments going forward.
- Settling debts – Negotiating lump-sum settlements for a fraction of the balance owed.
- Pursuing litigation – If needed, suing the lender over lending violations or representing you if the merchant cash advance company files a collection lawsuit.
Rather than waiting for an aggressive merchant cash advance lender to take legal action against your business, take control of the situation yourself with the help of a commercial debt relief lawyer. An experienced attorney can strategically apply pressure points to curb harassment from collectors while working to resolve your business debt on favorable terms.
Finding the Right Chicago Business Debt Relief Lawyer
If you borrowed a merchant cash advance loan that now seems impossible to repay without severely harming your Chicago business, don’t waste another minute stressing over it. Consult an experienced small business debt relief attorney as soon as possible to understand all your options for finding relief.Look for a lawyer with specific experience assisting Chicago companies negotiate, settle, or invalidate predatory merchant cash advance loans. Be sure to ask about their track record obtaining favorable resolutions with lenders. And find out what strategies they employ to halt aggressive collection efforts while working to resolve debts on your behalf.Armed with expert legal advice, you can take back control and make the best decisions for ensuring your Chicago small business survives this cash crunch. Don’t go it alone against intimidating merchant cash advance lenders. Partner with a knowledgeable debt relief attorney so you can keep calm and focus on operating your business profitably going forward.
-Frequently Asked Questions
What are some warning signs I should avoid a merchant cash advance loan?
Some red flags to watch for include interest rates over 50%, payback periods under 12 months, daily payment amounts over 10%, lack of detail on fees, or refusal to provide documentation ahead of time. High-pressure sales tactics are also a major warning sign.
What happens if I just stop making payments on my merchant cash advance loan?
-The lender will likely unleash aggressive collection efforts against both your business and you personally, including lawsuits, credit damage, bank levies, and more. Rather than ignoring the debt, work with a lawyer to contest the loan’s validity or negotiate alternate repayment terms.
Can my Chicago small business file for bankruptcy to eliminate merchant cash advance debt?
While it is possible to discharge this type of financing debt through bankruptcy, doing so also eliminates access to future credit and can seriously undermine customer confidence. An experienced lawyer can often negotiate similar debt relief through settlement while avoiding the damages of actual bankruptcy.
What basic information should I gather before meeting with a lawyer about merchant cash advance debt?
Useful items to have on hand include a copy of your loan agreement, bank statements showing payments/debits made to date, recent sales records, and copies of any legal demands or threats received from the lender.
Get Relief from Chicago Business Debt Today
If predatory merchant cash advance loans have trapped your Chicago small business in a debt spiral, take back control of your finances with help from an experienced commercial debt relief attorney. Contact our team for a free consultation to discuss your situation and options confidentially today.
IF YOU’RE LOOKING FOR A BUSINESS DEBT SETTLEMENT COMPANY, VISIT DELANCEY STREET. CLICK HERE NOW.