Baltimore Merchant Cash Advance Legal Help – Finding the Right Attorney
Running a small business in Baltimore can be tough, especially when cash flow gets tight. Many business owners turn to merchant cash advances to bridge the gap, but these financing products can come with some serious legal pitfalls. If you’ve taken out a merchant cash advance and are now facing legal issues or aggressive collection tactics, don’t go it alone – get help from an experienced business attorney.
How Merchant Cash Advances Work
Let’s start with a quick overview of how merchant cash advances (MCAs) work. An MCA provider gives you an upfront lump sum of cash in exchange for a percentage of your future credit card and debit card sales. Typically, the MCA company takes 10-20% of daily credit card receipts until the advance has been repaid in full, plus fees and interest.Unlike a loan, MCAs don’t have fixed monthly payments or terms. The flexibility can be helpful for businesses with fluctuating cash flow. However, MCAs also come with sky-high interest rates and aggressive collection practices that can sink a struggling small business.
-Common Legal Issues with Merchant Cash Advances
There are a few common legal issues that can crop up with merchant cash advances:
- Deceptive marketing: Many MCA companies don’t properly explain how these products work or just how much they will end up costing. Failure to clearly disclose terms is illegal.
- Aggressive collections: When businesses fall behind on payments, some MCA providers resort to harassing phone calls or even trying to raid merchant bank accounts directly. These extreme tactics may violate collection laws.
- Unconscionable contracts: The terms in MCA contracts sometimes shock the conscience – interest rates of 80% or more, personal guarantees, daily repayment requirements that consume huge percentages of revenue, and more. Courts may deem these overly oppressive contracts unenforceable.
- Alleged fraud: In some cases, business owners allege that MCA brokers or sales agents made false statements or otherwise engaged in fraud to induce them to sign contracts. This can potentially invalidate the agreements.
As you can see, merchant cash advances come with considerable legal risks. If you find yourself in a dispute with an MCA company, don’t go it alone – get advice from a lawyer.
Finding the Right Baltimore Business Attorney
There are a few key things to look for when selecting legal counsel to help with MCA issues:
Specialized Experience
Not all attorneys have experience dealing with merchant cash advances and alternative business financing. Look for lawyers who specifically mention this area of law in their bios and list of practice areas. The ideal attorney will have represented other Baltimore small business clients in disputes with MCA companies.
-Aggressive Representation
You want a lawyer who will fight aggressively to protect your interests, not someone who will roll over at the first sign of resistance from the MCA provider. During consultations, ask prospective attorneys about their strategies for defending against excessive collections, unconscionable contract provisions, and other legal issues MCA companies commonly use against small businesses.
Reasonable Fees
Most small business owners are cash-strapped – that’s why they resorted to a merchant cash advance in the first place. So you need an affordable attorney. Look for lawyers who offer free consultations, flat rates, and other flexible fee arrangements. Be wary of anyone asking for a huge upfront retainer before doing any actual legal work.
Good Communicator
Your attorney needs to keep you updated on the status of your case and quickly respond to your calls and emails. Make sure prospective lawyers communicate clearly and don’t leave you hanging during the selection process – that doesn’t bode well for how the representation will go.
Finding Legal Help for Your Baltimore Business
If you need an attorney to help negotiate, defend against, or sue an MCA provider in Baltimore, here are some good places to start your search:
- Avvo’s database lets you browse profiles of local business attorneys and even ask questions for free.
- NOLO’s Find a Lawyer tool connects you with screened, pre-qualified attorneys in the Baltimore metro.
- LawInfo offers another big directory of Baltimore business lawyers with useful filter tools and lawyer bios.
- Don’t overlook the Maryland State Bar Association and Baltimore Bar Association referral networks either.
During consultations with prospective attorneys, come armed with key documents like your MCA contract, correspondence with the MCA provider, accounting statements showing cash advances and payments deducted, and anything else that relates to your situation. This will allow lawyers to provide better advice about your options.Most attorneys offer free or low-cost initial consultations, so don’t hesitate to meet with a few different ones before deciding who to hire. Finding the right legal partner can make all the difference in resolving merchant cash advance disputes favorably.
-Alternative Dispute Resolution Options
If you want to avoid costly litigation, you may also want to ask prospective attorneys about alternative dispute resolution options like negotiation, settlement, or mediation. Resolving matters out of court is usually faster, cheaper, and less disruptive to your business.Your lawyer can review your contract to see if there is a binding arbitration clause or other dispute resolution provisions. If litigation seems unavoidable as a last resort, a good attorney will advise you upfront about the time commitment, legal expenses, and risks involved with suing an MCA provider.
What If I Can No Longer Afford My Payments?
If your business has hit hard times and can no longer afford merchant cash advance payments that are sinking you further into debt, don’t panic. You have options, including:
- Asking the MCA provider for settlement on reduced terms
- Proposing a payment plan you can actually afford
- Disputing problematic contract provisions and unfair fees
- Filing for bankruptcy as a last resort if payments are totally unmanageable
With an experienced attorney in your corner, you can negotiate payment relief or debt restructuring and avoid business-crippling legal action from the MCA company. Don’t wait until missing payments triggers default notices or other collection efforts – consult a lawyer right away.
-Could Bankruptcy Help My Business?
For some small businesses overwhelmed with merchant cash advance debt, filing for bankruptcy protection may be the most viable path forward. Your attorney can advise if Chapter 7 liquidation or Chapter 11 reorganization makes more sense based on your situation.The right business bankruptcy lawyer can help you:
- Stop aggressive collections and harassment
- Discharge some or all MCA debt
- Reduce or restructure unmanageable payments
- Keep the business running with cash flow relief
While bankruptcy can negatively impact your credit and isn’t ideal, it’s sometimes the only realistic choice when MCA debts become severely unmanageable. An attorney experienced in small business bankruptcies can clearly explain if this route could help rescue your company.
Don’t Go It Alone – Get Legal Help Today
Dealing with legal problems related to merchant cash advances or other alternative small business financing can feel overwhelming. But you don’t have to handle these issues on your own. With an experienced Baltimore business attorney on your side, you can defend your rights and protect your company’s future.I hope this overview gives you a good starting point for finding the legal help you need. Don’t wait to consult an attorney – the sooner you get professional advice, the better your chances of resolving MCA disputes on favorable terms. Most offer free case evaluations, so you have nothing to lose.Here are a few parting tips as you seek legal relief:
- Ask questions – make sure prospective attorneys clearly explain their experience, tactics, and what to expect at each step in the process.
- Compare options – meet with a few lawyers before deciding, so you find the best fit for your situation and budget.
- Come prepared – bring key documents to consultations so attorneys understand your specific issues.
- Speak up – don’t hold back details or hesitate to keep asking your lawyer questions along the way! This is your business and livelihood – make sure your attorney understands your perspective and priorities.
You’ve got this! With smart legal help in your corner, you can get MCA problems sorted out and get back to profitably running your Baltimore business full speed ahead.