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Colorado Merchant Cash Advance Lawyers Can Provide Debt Relief

Running a small business is tough. You have to worry about managing employees, attracting customers, and keeping up with regulations – all while trying to turn a profit. It’s no wonder that many small business owners end up needing a quick capital injection from time to time to keep things running smoothly. That’s where merchant cash advances can come in handy.A merchant cash advance provides business owners with fast access to capital in exchange for a percentage of future credit card sales. The advantage over traditional small business loans is that repayments are tied directly to sales volumes, making it easier to manage when business is slower.

The Downside of Merchant Cash Advances

While merchant cash advances offer a convenient source of financing, they also come with downsides. The most notable is the high cost – interest rates often exceed 30% when annualized! Additionally, some providers structure agreements in predatory ways that make it nearly impossible for borrowers to pay back the advance.For example, some agreements require business owners to pay back a fixed daily amount regardless of actual credit card sales for that day. If you have a slow week, you still owe the full daily repayment amount, quickly getting businesses into financial trouble.

Understanding Colorado Laws Related to Merchant Cash Advances

Merchant cash advance providers operating in Colorado need to follow state laws regarding disclosure requirements, fee limits, and fair lending practices. However, the specific regulations are complex with a lot of nuances. Many small business owners sign cash advance agreements without fully understanding the terms and their rights under Colorado law.This lack of understanding can cause significant problems later on if you run into issues repaying the advance. The first step is consulting a Colorado small business debt relief lawyer to review your merchant cash advance agreement. An experienced lawyer can explain whether the terms comply with state laws and what options you have if you need help.

Using Colorado Debt Settlement Laws to Negotiate Relief

If you do find yourself falling behind on merchant cash advance payments, Colorado debt settlement laws may provide some relief. Under the Colorado Fair Debt Collection Practices Act, you have certain rights when dealing with debt collectors.Most importantly, you can request debt validation if collectors cannot provide proof regarding the details and origins of the debt. By law, the collection agency must cease collection efforts until they mail you debt validation documentation. This can provide some breathing room to figure out next steps.Additionally, Colorado law (HB19-1285) specifies that charges related to a merchant cash advance agreement only apply to the initial advance. Collectors cannot legally charge fees for accessing future batches of capital. Review your agreement closely to determine whether the charges follow state guidelines.If the agreement includes illegal fees or other predatory terms, that gives you leverage to negotiate debt relief directly or through legal counsel. Relief options can include reduced payoff amounts, altered repayment terms, waived fees, and more.

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Working with a Debt Relief Lawyer to Resolve Merchant Cash Advance Issues

Trying to navigate complex Colorado merchant cash advance laws and resolve debt issues on your own can be intimidating. That’s why partnering with an experienced small business debt relief lawyer is so valuable. They understand state regulations and debt collection practices inside and out.An attorney can review your specific situation, explain where providers are violating regulations, and then represent you in negotiations. Having a legal professional advocate on your behalf carries much more weight compared to trying to work out issues on your own.Additionally, lawyers have tools to further pressure non-compliant cash advance providers and debt collectors. Filing complaints with state regulators and threatening class action lawsuits often motivate these companies to offer reasonable settlement terms.The right lawyer levels the playing field so you can focus on keeping your Colorado small business up and running. Don’t hesitate to schedule a consultation if you have concerns about a merchant cash advance agreement or related collection efforts. Specialized legal help can relieve a significant amount of stress and financial pressure.

Frequently Asked Questions About Colorado Merchant Cash Advance Relief

Do I need to hire a lawyer to request debt validation?No, you can send a debt validation letter to collection agencies yourself to request proof of debt ownership. However, having an attorney draft and send the letters often compels quicker and more thorough responses.What typical relief options are available when negotiating merchant cash advance debt?Common relief options include reduced payoff amounts (sometimes 50% or more of balance), altered repayment terms like lower daily payments over longer periods, waived fees, and ceasing collection calls/letters.Can credit card sales legally be garnished to repay merchant cash advances in Colorado?No. Colorado law prohibits structuring merchant cash advance agreements so that providers can directly access business bank accounts or credit card funds regardless of the repayment terms agreed to.What state laws regulate merchant cash advances in Colorado?The main regulations are the Colorado Uniform Consumer Credit Code, Colorado Fair Debt Collection Practices Act, and Colorado Consumer Equity Protection Act. These cover allowable agreement terms, fee limits, collection restrictions, and disclosure requirements.Are there any circumstances where a merchant cash advance provider can charge fees for accessing additional capital?Yes, but only if you formally request and agree to another distinct advance in writing. The fees cannot be bundled into the original agreement. Providers cannot unilaterally take additional fees whenever they decide to release more funds.

Final Thoughts

Dealing with overwhelming merchant cash advance debt feels scary. Just remember that Colorado laws exist to protect small business owners from many unfair and predatory lending practices. Don’t hesitate to connect with an experienced debt relief attorney to fully understand your rights in resolving merchant cash advance agreements. The right legal help can guide you in negotiating much more manageable repayment terms so you can get back to growing your business.



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