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Running a small business in Minneapolis can be tough, especially when it comes to finances. Many business owners turn to merchant cash advances to help with cash flow, but these loans can come with high interest rates and confusing terms. That’s why it’s important to work with an experienced Minneapolis merchant cash advance lawyer if you get into trouble.

How Merchant Cash Advances Work

A merchant cash advance (MCA) works differently than a traditional small business loan. With an MCA, you receive a lump sum payment upfront in exchange for a percentage of your future credit card and debit card sales over a set period of time. There are no fixed monthly payments – instead, the MCA company takes a fixed percentage of your daily credit card sales until the advance has been repaid in full, plus fees and interest.For example, if you were advanced $10,000, the MCA company may take 15% of your daily credit card sales until they have collected $13,500 total (the original $10,000 plus $3,500 in fees and interest). The daily payments fluctuate based on your sales volume.

The Benefits and Drawbacks of Merchant Cash Advances

Merchant cash advances can provide fast access to capital when you need it, which is the main appeal for most business owners. Approval is generally quicker compared to a bank loan, and you don’t need strong personal credit. MCAs also scale repayment to your revenue – if you have a slow month, you pay less.However, MCAs often come with an effective annual interest rate between 60-200%. And if your business has inconsistent cash flow, you may end up paying more than double the original advance amount over the repayment period of 6-12 months. It’s very easy to get trapped in predatory loan terms if you don’t fully understand the agreement.

Working with a Minneapolis Business Debt Relief Lawyer

If you’ve already entered into a merchant cash advance agreement with unfair terms, don’t panic. There are legal defenses available under Minnesota law that an experienced Minneapolis MCA lawyer can use to protect your rights. A few key defenses include:

  • Unconscionability – If the fees or interest rates are excessively high compared to the original advance amount, the agreement may be ruled unconscionable.
  • Breach of Covenant of Good Faith – Lenders must operate in good faith with complete transparency. Hidden fees or misleading terms could violate good faith covenants.
  • Usury Violations – There are limits on allowable interest rates under Minnesota’s usury law. Rates above the legal limit may be reduced by the courts.

debt relief lawyer can evaluate the specific terms of your MCA agreement and build a case around violations of state laws. In many cases, it is possible to get unfavorable contracts voided or modified to reduce interest rates and fees.

Steps to Take if You Need Debt Relief

If you realize your business is in over its head with merchant cash advance debt, stay calm and take these steps:

  1. Stop taking out new financing – Further digging the hole deeper will only make the situation worse. Cut unnecessary expenses as much as possible.
  2. Consult an attorney – An experienced Minneapolis small business lawyer can review your situation and advise on the best path forward. They can analyze loan documents for any illegal terms.
  3. Open communication with the lender – Your attorney can contact the MCA company to attempt negotiation of better repayment terms. Be upfront about your financial situation.
  4. Consider bankruptcy if necessary – As a last resort if negotiation fails, Chapter 7 or Chapter 11 bankruptcy may discharge some business debts and give you a fresh start.

With the help of a qualified Minneapolis merchant cash advance lawyer, many small business owners have successfully reduced or eliminated predatory MCA debt. Don’t hesitate to get professional legal advice.

About Delancey Street

Here at Delancey Street, our experienced team of Minneapolis lawyers and debt specialists work directly with small business owners who have gotten trapped in unfair merchant cash advance agreements. Over the past 15 years, we’ve helped hundreds of local companies protect their rights and regain financial stability.We offer free consultations to review your situation and will always give straight answers about the best path forward. Our debt relief services include:

  • Loan document review – We dig into the fine print of any financing agreements you’ve signed to identify potential violations of state laws and build a strong legal case on your behalf.
  • Lender negotiations – Through calls, emails, and letters, our lawyers tenaciously advocate to have unfair loan terms reduced or voided completely. We leverage every legal angle to maximize debt relief.
  • Litigation services – If negotiations fail and the lender refuses reasonable compromise, we won’t hesitate to take them to court over unlawful business practices. We will fight to the end for your rights.
  • Bankruptcy assistance – If debts remain unmanageable despite our best efforts, we guide business owners through Chapter 7 or Chapter 11 bankruptcy smoothly and cost-effectively.
  • Ongoing advisory services – Even after resolving immediate debts, we remain available to consult on financial decisions, contracts, and growth planning to help prevent future issues.




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

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