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Merchant Cash Advance Attorney South Carolina

Getting financing for your small business can be tricky. Traditional bank loans require good credit and collateral, which many small businesses lack. This is where merchant cash advances come in – they provide quick financing without all the usual requirements. But merchant cash advances also come with big risks, like super high interest rates and aggressive collection tactics. If you’ve gotten a merchant cash advance in South Carolina, you may need a merchant cash advance attorney to protect your rights.

What is a Merchant Cash Advance?

A merchant cash advance (MCA) is a form of alternative small business financing. Here’s how it works:

  • The MCA company gives you an upfront lump sum of cash.
  • In exchange, they take a percentage of your future credit card and debit card sales until you pay back the advance plus a fee, which can equal a sky-high interest rate.
  • The MCA company makes daily withdrawals from your bank account for the payments.
  • There’s usually no fixed repayment schedule – the daily withdrawals continue until the MCA is repaid in full.

MCAs are popular because they provide fast cash without considering your business’s credit score or requiring collateral. The catch is that the fees and interest equivalent can be astronomical – some MCAs equate to over 200% APR!

Pros and Cons of Merchant Cash Advances

MCAs offer some benefits, but also major drawbacks:


  • Fast approval and funding, usually within a few days
  • No collateral required
  • Approval based on business revenue, not personal credit
  • Flexible daily payments rather than fixed loan payments


  • Extremely high interest rates – often over 100% APR
  • Daily bank withdrawals can lead to overdraft fees
  • Payments take priority over other business expenses
  • Aggressive collections if payments fall behind
  • Short repayment periods of 6-18 months

Common MCA Abuses

While MCAs can help businesses access capital, some providers engage in predatory and abusive practices. Here are some common problems:

  • Misrepresenting MCAs as “purchases” rather than loans to avoid usury laws
  • Charging excessive interest rates over 100% APR
  • Requiring personal guarantees making business owners personally liable
  • Aggressive collections like contacting customers to divert payments
  • No transparency about actual costs and terms
  • Taking more than the daily limit from bank accounts
  • Failing to credit repayments properly
  • Threatening borrowers to get them to sign agreements

Many of these practices violate state and federal consumer protection laws. The Federal Trade Commission recently banned several MCA companies from the industry for illegal conduct.

South Carolina MCA Laws

South Carolina regulates MCAs under the state’s consumer protection code. Key laws include:

  • Licensing: MCA providers must have a state consumer finance license.
  • Disclosures: MCA agreements must disclose the repayment amount, payment schedule, total of payments, and equivalent annual percentage rate.
  • Right to Cancel: Borrowers can cancel an MCA within 1 business day and get a full refund.
  • Unfair Practices: MCA companies cannot engage in unfair, deceptive, or abusive acts and practices.
  • Usury Cap: Interest rates on loans less than $600 cannot exceed 12% APR.

Violating these laws can result in state enforcement actions, cancellation of the MCA agreement, and liability for damages.

Challenging an Unlawful MCA

If you believe an MCA company has violated the law, you may be able to fight back. An experienced merchant cash advance attorney can help you with strategies like:

  • Demanding evidence the MCA provider is properly licensed
  • Asserting violations of state and federal consumer protection laws
  • Claiming the MCA agreement is void as an illegal contract
  • Disputing the debt and refusing payment
  • Seeking refunds of unlawful payments already made
  • Filing complaints with regulators like the state attorney general
  • Pursuing damages for financial harm caused

In some cases, these arguments can result in the MCA being cancelled, refunded, or modified to comply with the law.

Defending MCA Collection Lawsuits

If an MCA provider sues you to collect, you can raise defenses like:

  • The agreement violates state usury or lending laws
  • The company is unlicensed or failed to make required disclosures
  • The terms are unconscionable and unenforceable
  • The company engaged in unfair practices
  • Payments have not been credited properly
  • The personal guarantee is invalid

You can also file counterclaims asserting the MCA company violated consumer protection laws. This puts pressure on the MCA provider to dismiss the lawsuit on favorable terms.

Alternatives to Merchant Cash Advances

Given the risks of MCAs, you may want to consider other financing options like:

  • Bank loans – Higher approval standards but lower costs
  • SBA loans – Government-backed small business loans
  • Business credit cards – Revolving credit lines with fixed rates
  • Invoice factoring – Selling unpaid invoices for cash upfront
  • Angel investors – Wealthy individuals who finance startups
  • Crowdfunding – Raising small investments from many backers

While these may not be as fast and easy to get as MCAs, they provide cheaper access to capital without aggressive collection practices.

Consult a Merchant Cash Advance Attorney

Dealing with an unlawful MCA can be stressful. An experienced merchant cash advance attorney can help protect your rights. Look for a lawyer who understands MCA agreements and South Carolina laws regulating them. They can review your MCA agreement for violations, negotiate with the provider, defend any lawsuits, and help you find better financing alternatives.

With an attorney’s help, you may be able to cancel or modify an abusive MCA and recover any improper payments. Don’t struggle alone – consult a skilled merchant cash advance attorney in South Carolina for assistance.

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

"Super fast, and super courteous, Delancey Street is amazing"
$500,000 MCA Restructured Over 3 Years
"Thanks for helping me in literally 24 hours"
$250,000 SBA Loan Offer in Compromise
"Great choice for business owners who need a trustworthy partner"
$350,000 MCA Restructured Over 2 Years

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