Chat with us, powered by LiveChat

Illinois Merchant Cash Advance Lawyers and Business Debt Relief

Running a small business is tough. Between managing employees, keeping customers happy, and trying to turn a profit, things can get overwhelming fast. And when cash flow starts running dry, it’s easy to panic.Many business owners in this situation turn to merchant cash advances to keep things afloat. But these financial products come with their own set of problems. Excessive fees, sky-high interest rates, and aggressive collection tactics are par for the course.If you took out a merchant cash advance in Illinois and are now facing legal threats from the funder, don’t go it alone. Read on to learn how an experienced business debt relief lawyer can help.

How Merchant Cash Advances Work

Unlike a small business loan from a bank, a merchant cash advance (MCA) is actually the purchase of a business’s future credit card sales at a discount. Here’s a quick rundown of how it works:

- -
  1. A funding company gives the business owner an upfront lump sum of cash
  2. In exchange, the business agrees to pay back the funder by allowing them to withdraw a set percentage of daily credit card sales until the balance is repaid (plus fees/interest)
  3. There is no set repayment schedule – the funding company collects payments automatically from credit card settlements

This quick access to capital can be a lifeline for struggling companies. But the costs can spiral out of control if sales take a dip.

The Ugly Side of Merchant Cash Advances

While merchant cash advances provide fast money, they come at a steep price. Here are some of the common issues business owners face:Exorbitantly high interest rates – MCAs typically charge the equivalent of 60-200% APR or more in fees.Daily debits from bank account – The funder has direct access to withdraw payments from sales, which puts cash flow at risk.No concrete payoff date – Since payments depend on credit card sales, struggling businesses can end up paying far more than the advance.Aggressive collections – When the business can’t keep up with payments, funders often sue, garnish bank accounts, or send accounts to debt collectors.Many small business owners don’t fully understand the risk and get trapped in predatory MCA deals. If this happened to your company, you need an attorney on your side.

Fighting Back Against Merchant Cash Advance Abuse

The good news is that many of the abusive tactics funders use violate state and federal law. An experienced lawyer can help you:

  • Negotiate a settlement for a fraction of the balance
  • Craft defenses to defeat lawsuits or collection efforts
  • Attack the MCA agreement as predatory lending
  • Recover damages for violations of lending rules

Don’t wait until you get a court summons or collectors start calling. Reach out to an Illinois business debt relief attorney as soon as possible after signing an MCA agreement. The sooner you act, the more leverage you’ll have.

- -

4 Defenses Against Merchant Cash Advance Lawsuits

If legal action has already been filed, all hope isn’t lost. Here are some of the most powerful defenses lawyers use:

1. Violations of Illinois Lending Laws

In Illinois, merchant cash advances fall under the state’s Payday Loan Reform Act and Consumer Installment Loan Act. If the funder fails to follow strict rules on lending limits, disclosures, etc. the agreement may be void.

2. Unconscionable Contract Terms

If the fees, rates, or repayment terms are outrageously unfair, courts can refuse to enforce the agreement. The business may still have to return the upfront cash, but won’t owe any interest or penalties.

3. Fraud and Misrepresentation

When funders mislead the business about costs, consequences for late payments, or other key terms, it can amount to fraud. This can invalidate the entire agreement.

4. Usury Violations

Usury laws cap the maximum allowable interest rates lenders can charge. MCA companies often exceed rate caps which courts frown on.

- -

Turning the Tables in MCA Lawsuits

Rather than just defending against collection lawsuits, some businesses go on the attack with counterclaims against the funder for:

  • Predatory lending
  • Fraud
  • Usury violations
  • Racketeering
  • Breach of contract

This aggressive offense can force the MCA company to settle the debt for pennies on the dollar.

Finding the Right Illinois Business Debt Relief Lawyer

As you can see, merchant cash advance lawsuits are complex. Don’t waste money on a random law firm that dabbles in commercial litigation. Look for attorneys with specific experience fighting MCA lenders, such as:

- -

Reach out to several top-rated MCA lawyers for free case evaluations. Many work on a contingency fee basis, so they only get paid if you win or settle the case.

Other Business Debt Relief Options

If you can no longer afford merchant cash advance payments, bankruptcy or debt settlement may be smart alternatives:Business Bankruptcy – Filing Chapter 7 or Chapter 11 stops collections and wipes out debt. Just beware that it also tanks your business credit.Debt Settlement – Debt relief companies negotiate lump-sum settlements with creditors for 30-50% off what you owe. This avoids court but hits your credit report.Talk to a small business debt relief attorney to explore all options. Acting quickly gives you maximum leverage against aggressive MCA collectors.

Don’t Face Cash Advance Lenders Alone

Getting sued or harassed by merchant cash advance companies is stressful enough without going it alone. The experienced business debt relief lawyers at Delancey Street have the knowledge and resources to fight back against predatory lending.We custom-tailor robust legal defenses to fit your situation. Our zealous advocacy has helped countless companies invalidate unfair MCA agreements and defeat abusive collection tactics.Don’t wait until it’s too late or the damage is already done. Schedule your free case review today – we’re always just a phone call away.

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"
Leo
$500,000 MCA Restructured Over 3 Years
"Thanks for helping me in literally 24 hours"
Jason
$250,000 SBA Loan Offer in Compromise
"Great choice for business owners who need a trustworthy partner"
Mary
$350,000 MCA Restructured Over 2 Years

In The Media

Delancey Street CEO discusses ways to reward employees
Delancey Street CEO discusses the benefits of franchising on Forbes.
Delancey Street CEO discusses management on AMEX.
Is JSZ Financial Co., Inc. a Scam?

In today’s financial landscape, it is crucial to be cautious…

Is Kansas Counselors, Inc. a Scam?

In today’s world, where debt collection agencies are prevalent, it’s…

Is KAPS & CO LLC a Scam?

In today’s world, where debt collection agencies play a significant…

Is KASON CREDIT CORPORATION a Scam?

In today’s financial landscape, consumers are increasingly concerned about the…

Is Kauai Credit Adjusters, Limited a Scam?

Debt collection agencies play a crucial role in the financial…

Delancey Street simply gets it. You're talking to experts.
Steven Norris
Get Help Today

Ready To Get Started?

If you have questions, feel free to shoot us an email, or fill out our live chat.

Schedule Consultation