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Maine Merchant Cash Advance Attorney

Merchant cash advances have become a popular alternative to traditional small business loans in Maine. A merchant cash advance provides a business with an upfront sum of money in exchange for a percentage of future credit card sales. This can be an attractive option for businesses that need quick funding and may not qualify for a bank loan. However, merchant cash advances also come with some major drawbacks that Maine business owners should understand before signing an agreement. The costs and terms of merchant cash advances can be predatory, trapping business owners in debt cycles they can’t escape. That’s where working with an experienced Maine merchant cash advance attorney can help.

How Merchant Cash Advances Work

A merchant cash advance provides funding upfront in exchange for a fixed percentage of future credit card sales

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. It works like this:

  • The business owner applies to a merchant cash advance company. Approval is usually quicker than a traditional loan.
  • If approved, the company provides a lump sum upfront. This can range from $5,000 to over $500,000.
  • In exchange, the business agrees to pay back the advance through daily or weekly payments. This is done by allowing the lender to withdraw a fixed percentage of credit card sales directly from the business’s merchant account.
  • Payments continue until the full advance amount plus fees and interest is repaid. This is usually done over 3-18 months.

Merchant cash advances seem easy to obtain. Some key advantages over traditional small business loans include



  • Faster application and funding process
  • Approval based on credit card sales versus personal credit scores
  • No collateral required
  • Fixed daily payments rather than lump sum monthly payments
  • Payments adjust up and down with sales

However, the costs and risks are much higher compared to traditional loans.

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High Costs and Risks

While merchant cash advances seem easy to obtain, the costs are extremely high. Advances typically have an annual percentage rate between 60-200% 


. This is much higher than even credit cards or online lenders.Other risks include:

  • Daily payments are taken regardless of actual sales, which can quickly drain a business’s accounts
  • It’s easy to get trapped in debt cycles, taking new advances to pay off old ones
  • Advances have vague terms that let providers change payments and seize assets if they aren’t satisfied
  • Providers have first priority access to credit card sales ahead of other expenses

Unfortunately, many Maine business owners don’t realize how dangerous merchant cash advance agreements can be until it’s too late. That’s why it’s critical to have an experienced attorney review any proposed agreement first.

How a Maine Merchant Cash Advance Attorney Can Help

A Maine merchant cash advance attorney understands the legal side of these complex financial products. They can help business owners in several important ways:

  • Review the full agreement and explain all terms, costs, conditions and risks in plain language
  • Negotiate more favorable terms like lower payments or longer repayment periods
  • Add protective provisions to the agreement
  • Develop strategies to limit personal liability if the business defaults
  • Dispute predatory lending practices
  • Defend against collection lawsuits and asset seizures

Having an attorney involved before signing an agreement can potentially save a Maine business owner thousands of dollars and prevent devastating lawsuits down the road.

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Important Maine Legal Protections

There are also some important Maine state laws that provide protections around merchant cash advances:

  • Maine usury laws cap interest rates on loans at 30% APR

    . Merchant cash advances often far exceed this rate.

  • The Maine Uniform Commercial Code requires disclosures for sales of future revenue transactions like merchant cash advances


  • Maine has laws against unfair trade practices that may apply to predatory lending tactics.
  • Maine also has strong consumer debt collection laws that regulate what tactics lenders can use to recoup debts.

A Maine merchant cash advance attorney will know how to leverage these protections for the business owner’s benefit.

Beware of Scams

Unfortunately, the merchant cash advance industry is also ripe with scams and predatory schemes. Many so-called lenders are not actually registered businesses. They lure in business owners with promises of fast money, then disappear with the upfront fees and leave the applicant with nothing.Warning signs of a scam include:

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  • Requests for upfront fees before funding is provided
  • Refusal to provide documentation or company information
  • High-pressure sales tactics
  • Too-good-to-be-true offers of approval
  • Lack of transparency around rates, terms and costs

Reputable merchant cash advance providers should be transparent, registered Maine businesses willing to fully explain their products. Having an attorney vet any agreement is the best way for a business owner to avoid scams.

Alternatives to Consider First

Because of the high costs, it’s smart for Maine business owners to consider alternatives before turning to a merchant cash advance. Some options include:

  • Traditional SBA loans with lower rates
  • Business lines of credit
  • Invoice factoring
  • Asking vendors for better terms
  • Crowdfunding
  • Friends and family loans
  • Credit cards

While not perfect, these options likely come with lower costs than a merchant cash advance. An attorney can help weigh the pros and cons of each.


Merchant cash advances allow quick access to financing but also come with risks and complex legal implications. Working with an attorney is key to avoiding pitfalls. Look for a Maine lawyer experienced specifically with merchant cash advance laws and regulations. They can help ensure you understand the full agreement, negotiate better terms, and defend your rights. With proper legal review, a merchant cash advance may be beneficial for some Maine small businesses.

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