Miami Merchant Cash Advance Legal Help – Attorneys, Debt Settlement
Merchant cash advances can be a great financing option for Miami businesses, but they also come with legal risks. If your business has fallen behind on payments or gotten into other legal issues with a merchant cash advance company, you may need the help of an attorney to protect your rights. This article will provide an overview of merchant cash advances, common legal issues that arise, defenses business owners can use, and how to find the right legal help in Miami.
What is a Merchant Cash Advance?
A merchant cash advance (MCA) is a form of business financing where a company purchases a portion of your future credit card sales in exchange for an upfront lump sum payment. It is not technically a loan, but rather the purchase of future receivables at a discount.Here’s a quick rundown of how merchant cash advances work:
- MCA company provides a lump sum upfront in exchange for a percentage of future credit card sales
- Fixed daily or weekly payments are taken automatically as a percentage of credit card sales
- Payments continue until the lump sum is repaid plus fees and interest equivalent
- MCAs are faster and easier to qualify for than bank loans
While MCAs may be easier to obtain than traditional loans, they often come at a higher cost. Interest rates can range from 30-300% APR when fees are included. And if your business has a slow period, you still owe the fixed daily/weekly payments which can lead to a debt spiral.That’s why it’s critical to understand the legal implications before signing a merchant cash advance agreement.
Common Legal Issues with Merchant Cash Advances
Some of the most common legal issues that arise with Miami merchant cash advances include:
Excessively High Interest Rates
While there are no interest rate caps on MCAs in Florida, rates can still be deemed unlawful if excessively high. Rates above 100% APR may be subject to litigation. An experienced attorney can review your agreement and determine if the rates are exploitative.
Breach of Contract
If either party violates terms of the MCA agreement, it can constitute breach of contract. Common claims include failing to make payments, improperly withdrawing funds, or not delivering the lump sum. An attorney can help you interpret the contract and build a case for breach if applicable.
Deceptive or Misleading Practices
Some MCA companies engage in predatory actions such as misleading statements about costs, harassing or threatening collection tactics, improperly reporting to credit bureaus, or forcing borrowers to sign confessions of judgement. These may violate state and federal debt collection laws.
Unfair or Unconscionable Agreements
Under Florida law, contracts can be rendered void if found to be unfair or unconscionable. This includes deceptive terms, excessive costs, lack of understanding, and other elements that make the agreement unjust. An attorney can review and determine if a contract is unlawful.As you can see, Miami business owners have ample legal defenses in disputes with MCA companies. But building a strong case requires experienced legal guidance.
Legal Defenses for Miami Business Owners
In working with an attorney, there are several defenses business owners can raise to get out of an unfair merchant cash advance agreement or get charges reduced:
No Meeting of the Minds
If one party did not fully understand terms of the contract or important information was left out, you can claim no meeting of the minds occurred. This can render the agreement void or voidable.
As mentioned, if a contract contains unfair, deceptive or exploitative terms, it may be legally unconscionable. This serves as grounds for the court to void or modify the agreement.
If interest rates exceed Florida’s usury laws, the associated fees and interest may not be collectible. An attorney can review and provide an opinion on potential usury violations.
Improper Account Withdrawals
If a merchant cash advance company withdraws the wrong amounts from your accounts, withdraws after being paid in full, or violates other account guidelines, you have grounds for halting payments. An attorney can force corrective action through litigation or negotiations.
Harassment or Misrepresentation
If collection efforts involve unlawful harassment, threats, or misstatements about legal options, statutory damages may be awarded under debt collection laws.
Breach of Duty
Cash advance companies have a legal duty to fully disclose costs, terms, and provide statements in good faith. Failure to do so can constitute breach.With an in-depth understanding of these defenses, Miami business owners can gain leverage in legal disputes over merchant cash advances.
Finding the Right Miami Attorney for Your Business
If you find your business embroiled in a legal dispute over a merchant cash advance in Miami, finding the right attorney is critical. Be sure to research and retain an attorney with specific experience in the following areas:
- Commercial litigation – You want a business attorney used to handling contract disputes and business-related lawsuits. Merchant cash advance cases have unique elements that general attorneys may not grasp.
- Financial services litigation – An attorney should have a strong working knowledge of lending regulations, usury laws, debt collection practices, and consumer finance disputes. Experience fighting banks and lenders is a plus.
- Contract review – The attorney should offer contract review services to analyze cash advance agreements for weaknesses, loopholes, and potential defenses. This informs overall litigation strategy.
- Negotiations – Many merchant cash advance cases settle out of court through negotiations between attorneys. Yours should have a strong track record of favorable settlements.
- Reputation – Only work with an attorney who has a stellar reputation with past clients, peers, and judges. Check reviews, awards, and professional certifications.
- Free consultation – Most attorneys offer free initial consultations. Be sure to ask plenty of questions to vet their experience before hiring.
Finding the right legal help can mean the difference between a favorable outcome or major financial damage for your Miami business. Do your due diligence to retain the top cash advance attorney you can. Reach out today to learn more about your rights and options.