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Georgia Merchant Cash Advance Lawyers Can Provide Debt Relief

Running a small business is tough. You have to worry about paying employees, keeping customers happy, managing inventory, and a million other things. With all those plates spinning, it can be tempting to take out a merchant cash advance loan to keep things running. But those loans come with sky high interest rates and aggressive collection tactics if you fall behind. If you took out a merchant cash advance in Georgia and are struggling to pay it back, there are debt relief options available. Keep reading to learn more.

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How Merchant Cash Advances Work

A merchant cash advance (MCA) works differently than a traditional small business loan. With an MCA, a lender provides you with a lump sum of cash upfront. In exchange, they take a percentage of your future credit card and debit card sales until the advance is paid back – plus very high fees and interest charges.The catch is that MCA loans don’t have a fixed payback period. The lender will keep taking their cut of your sales until the balance reaches zero. And they’ll add extremely high fees and interest rates over 20-30% along the way. If business slows down, you could end up locked into this arrangement for years struggling to pay it back.

The Problem With Merchant Cash Advances

Merchant cash advances appeal to small business owners because they are easy to qualify for. The lender doesn’t really care about your credit score or business fundamentals. As long as you have steady credit card and debit card sales volume, you can likely get approved.But while MCAs may provide quick access to capital, they come with a number of downsides:

  • Astronomical interest rates – MCAs typically charge interest rates over 20-30%. And that interest keeps accruing until the balance is paid off.
  • Short payback periods – Many MCA contracts require paying back the advance quickly, sometimes in as little as 9 months. This can put a huge strain on cash flow.
  • Aggressive collections – If you fall behind on payments, MCA lenders are quick to sic aggressive third-party collection agencies on you. It’s not uncommon for them to try calling your customers or freezing bank accounts.
  • No consumer protections – MCA loans fall under commercial lending guidelines. That means you don’t have the same consumer protections like rate caps or fee limits that apply to other lending products. Lenders can basically set whatever terms they want.

As you can see, merchant cash advances can quickly spiral out of control if you aren’t bringing in consistent sales volume. Many small business owners have found themselves buried under massive MCA debts they have no hope of paying off.Luckily, there are options available if you find yourself in this situation. An experienced business debt relief attorney can help negotiate a settlement or restructure the payback terms.

Georgia Merchant Cash Advance Laws

Compared to other states, Georgia has very limited regulations when it comes to merchant cash advances and other commercial financing products. There are no caps on interest rates or fees lenders can charge. The only real requirement is that lenders must be licensed with the Georgia Department of Banking and Finance.However, just because something is technically legal doesn’t make it ethical. Georgia lawmakers on both sides of the aisle have started proposing bills to rein in predatory lending practices by the merchant cash advance industry.In the 2023-2024 legislative session, State Senator Brian Strickland introduced SB 53, which would:

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  • Require truth-in-lending disclosures so business owners understand the full cost of an MCA
  • Cap interest rates at 30%
  • Limit payments to no more than 2.5% of future credit card sales
  • Bar confessions of judgement that allow lenders to seize assets without due process

Meanwhile on the Democratic side, State Rep. Matthew Wilson put forth HB 232 with similar reforms. Both bills remain tied up in committee for now. But there is growing recognition that the “Wild West” environment around commercial financing in Georgia needs more guardrails.

Finding a Georgia Business Debt Relief Lawyer

If you feel trapped paying back a predatory merchant cash advance, know that you have options. An experienced Georgia debt relief attorney can help you:

  • Negotiate with the lender for better repayment terms
  • Reduce the overall payback balance
  • Consolidate multiple loans into more manageable payments
  • Explore bankruptcy if negotiations fail

The key is finding an attorney who specializes in this area of law. Look for lawyers with specific experience helping:

  • Renegotiate or discharge MCA loans
  • Defend against aggressive collections lawsuits
  • Unwind confessions of judgement
  • File complaints over deceptive lending practices

Good places to start your search include AvvoLawInfoFindLaw, and the State Bar of Georgia.

What a Business Debt Relief Lawyer Can Do

An experienced commercial debt relief attorney has a number of strategies at their disposal to help you get out from under a predatory merchant cash advance. Here are some examples:

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Negotiating a Settlement – Your lawyer can negotiate directly with the lender or their attorneys to reduce the total repayment balance. This gets rid of some of the principal and can help you pay off the loan quicker.

Improving Repayment Terms – If the lender won’t agree to a settlement, your attorney may still be able to get the repayment terms changed to your benefit – reducing the fixed daily payment or extending the payback period.

Consolidating Loans – If you have multiple merchant cash advances or other commercial loans, your lawyer can work on consolidating everything with better rates/terms. This simplifies things into one manageable payment.

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Disputing Confessions of Judgement – MCA lenders often get business owners to sign a confession allowing them to seize assets without going to court first. A good lawyer can dispute and reverse these.

Defending Against Lawsuits – Lenders will often sue if you fall behind on payments. An experienced litigator levels the playing field and fights back against excessive fees/charges.

Filing Complaints – In some cases, lenders make misrepresentations or violate Georgia laws. Your attorney can file official complaints to apply pressure and gain leverage.

Exploring Bankruptcy – For some small business owners, bankruptcy may be the most viable path to eliminating unpayable debts. A seasoned bankruptcy lawyer can advise if this makes sense.Having an expert business debt relief lawyer on your side can make all the difference. They understand complex commercial lending laws and know how to negotiate effectively with lenders. Don’t hesitate to seek legal assistance if merchant cash advance debts threaten the viability of your Georgia small business. Help is out there!


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