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Los Angeles Merchant Cash Advance Lawyers Provide Debt Relief

Running a small business is tough. Between managing employees, keeping customers happy, and trying to turn a profit, it’s easy to feel overwhelmed. And when cash flow gets tight, it can be tempting to turn to merchant cash advances to keep things afloat. But those quick cash fixes often lead to spiraling debt and financial disaster down the road.If you‘re a Los Angeles small business owner struggling under the weight of merchant cash advance debt, don’t panic. There are experienced business debt relief lawyers who can help you regain your financial footing. Keep reading to learn more about how merchant cash advances work, the downsides of these financing options, and how the right legal team can help you find the light at the end of the tunnel.

How Merchant Cash Advances Work – And Why They Can Be So Risky

Unlike small business loans, merchant cash advances aren‘t really loans at all. Instead, cash advance companies provide you with a lump sum of cash upfront. In exchange, they take a cut of your future credit card and debit card sales over a set period of time – often 6-12 months – until the advance has been repaid in full.Because cash advance companies aren’t lending you money in the traditional sense, they aren‘t bound by the same regulations as banks and other financial institutions. This means they can charge outrageously high fees and interest rates, often equivalent to over 90% APR!What’s worse, most cash advance contracts require you to give the funder daily or weekly access to your merchant processing statements. They take their cut automatically based on your credit card sales volume, leaving you powerless to control the repayment terms.If business slows, you still owe the same repayment amount to the company. And because there’s often no fixed end date to the agreement, struggling business owners can remain trapped under these oppressive repayment terms for months or even years longer than expected.This vicious cycle plunges many merchants deeper and deeper into debt, eventually forcing them to close up shop completely. But it doesn’t have to end this way.

LA Business Debt Relief Lawyers Can Help You Break the Cycle

If you‘ve found yourself caught in the seemingly endless spiral of repaying a business cash advance debt, don’t lose hope. The experienced Los Angeles small business debt relief lawyers at Delancey Street can help you regain control of your finances.Our legal team takes a compassionate, ethical approach to assisting LA merchants who have been taken advantage of by predatory cash advance companies. We’ll start by thoroughly analyzing your merchant cash advance agreement to identify any unlawful or unethical provisions we may be able to fight to have voided or amended.For example, some merchant agreements violate California’s business finance lending laws by:

  • Failing to clearly disclose fees, rates, payment amounts, total repayment costs, etc.
  • Charging rates or fees above the legal limits
  • Requiring borrowers to waive certain rights or legal protections
  • Including confusing, contradictory, or misleading clauses

If we can prove violations like these, we may be able to get the problematic contract invalidated so you can walk away from all or part of the debt.

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Additional Strategies for Relieving Merchant Cash Advance Debt

Beyond analyzing cash advance agreements for violations, our Los Angeles small business debt relief lawyers have additional tricks up our sleeves too. We take a holistic approach to addressing merchant cash advance debt that may involve:

  • Negotiating settlements – We can negotiate directly with cash advance providers to reduce the total repayment amount and create a fixed payoff date. Many funders would rather take a smaller payout upfront than battle things out in court.
  • Restructuring payments – If the monthly payments are simply unmanageable, we may be able to get the term length extended and/or have fees and interest rates reduced so payments are more affordable.
  • Filing bankruptcy – While bankruptcy certainly isn’t the ideal outcome, Chapter 7 or Chapter 11 bankruptcy can eliminate or restructure oppressive debts to give struggling LA small business owners a fresh start.
  • Challenging debt ownership – In some cases, predatory cash advance companies sell off debts to third-party debt buyers. We can challenge whether those buyers truly own the right to collect the debt.
  • Contesting confession of judgment clauses – Many merchant cash advance agreements contain dangerous confession of judgment clauses allowing the funder to obtain a judgment against you without notice or due process. We can fight to overturn improper judgments like these.
  • Freezing repayments – If the cash advance company has violated regulations or otherwise acted unlawfully or unethically, we may be able to get a court order temporarily halting the automatic repayments so you regain control of your merchant processing while we pursue further legal action.

The key is finding the right balance of legal strategies to fit your unique situation. Through compassionate counseling and aggressive representation, we create customized debt relief solutions for LA small business owners feeling trapped and overwhelmed.




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