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Oklahoma City Merchant Cash Advance Legal Help – Attorneys, Debt Settlement

Merchant cash advances have become an increasingly popular way for small businesses to access quick capital. Unlike traditional bank loans, merchant cash advances provide funding in just days or weeks, often with minimal paperwork. However, they also come with considerable risks if your Oklahoma City business struggles to keep up with payments.If you default on repaying a merchant cash advance, the consequences can be severe. That’s why it’s critical to understand your rights and defenses. Working with an experienced Oklahoma City business debt relief lawyer provides vital guidance and support to protect your interests. This article outlines key legal considerations when facing merchant cash advance default.

Consequences of Defaulting on a Merchant Cash Advance

When a business defaults on its merchant cash advance repayments, there are a few potential defenses to avoid or mitigate the consequences:

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  • Improper contract terms – Some merchant cash advance contracts contain illegal or unenforceable provisions that a lawyer can leverage.
  • Usury violations – If the interest rate exceeds Oklahoma usury laws, the contract may be void. Rates over 10% are generally illegal here.
  • Lending law violations – Experienced lawyers can leverage violations of state lending and finance laws.
  • Unconscionability claims – Courts sometimes rule contracts “unconscionable” if the terms unreasonably favor the lender. This can invalidate parts of the contract.
See also  Oklahoma City Merchant Cash Advance Attorney

However, the consequences are usually swift and severe if you don’t quickly assert legal defenses:

  1. Account locks – The provider will likely immediately lock your merchant account so you can’t process credit card sales. This instantly cuts off a revenue stream.
  2. Bank levies – Providers may place holds on linked bank accounts or seize funds.
  3. Harassment from collectors – Aggressive third-party debt collectors start calling and showing up in person to demand repayment.
  4. Damaged business relationships – Providers can legally contact your vendors and customers about the defaulted debt, harming relationships.
  5. Lawsuits and judgments – The lender will probably sue for breach of contract and obtain judgments allowing seizure of assets.

Protect Your Business Before Default Occurs

Before defaulting, businesses should explore options to resolve merchant cash advance debt:

  • Ask for modifications – Request an extended term, lower payments, or interest rate reduction. Most lenders would rather get repaid slowly than risk default.
  • Debt consolidation loan – A bank loan or line of credit can pay off the high-interest merchant cash advance debt, replacing it with something more affordable.
  • Shift business focus – Change your model to rely less on credit card sales so the impact is reduced if your merchant account is locked.
  • Sell assets – Selling unused equipment or other assets can generate funds to get caught up if struggling with payments.
  • Consider graceful business closure – If the financial damage is irreparable, closing down may be the best path forward vs. fighting lawsuits.

What to Do Immediately if You Default

If your Oklahoma City business defaults on merchant cash advance payments, prompt legal action can help minimize damage:

  • Consult a lawyer immediately – An experienced business attorney can advise you regarding your rights and defenses to avoid the harshest consequences.
  • Respond to all legal notices – If the lender obtains judgments or places liens, follow court orders and attend hearings. Failure to respond can result in assets being seized.
  • Open new bank accounts – Deposit revenues into accounts at different banks so the provider can’t freeze your operating accounts.
  • Review personal assets at risk – If you personally guaranteed the advance, unprotected personal assets may be pursued. LLCs and trusts can shield some assets.
  • Negotiate settlements – In some cases, lenders will negotiate discounted settlements to avoid litigation risk. A 20-50% settlement is sometimes possible.
  • Consider business bankruptcy – Filing for bankruptcy can halt collections activity and discharge qualifying debts. Consult attorneys to explore if a Chapter 7 or Chapter 11 bankruptcy could help.
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Finding the Right Legal Help in Oklahoma City

Navigating merchant cash advance default is complex. Having an attorney experienced with these instruments is critical to assert your rights while limiting risks.Key things to look for when selecting legal counsel:

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  • Deep MCA expertise – Thorough knowledge of merchant cash advance agreements and aggressive collection practices is vital.
  • Local experience – Find Oklahoma City lawyers familiar with state laws and courts. Out-of-state firms often lack this.
  • Proven track record – Look for numerous successes helping other local businesses defend against MCA default consequences. Check reviews.
  • Reasonable fees – Avoid lawyers charging hefty retainers before doing anything. Make sure fee structure incentivizes resolving your situation economically.

Relying on legal self-help resources often proves ineffective against seasoned merchant cash advance collectors. Having expert attorneys on your side can make all the difference.

Alternatives to Merchant Cash Advances

While merchant cash advances provide quick access to capital, the risks of default make them precarious. Traditional bank loans usually offer cheaper, more flexible financing.Potential alternatives for Oklahoma City businesses to consider:

  • SBA loans – Government-backed small business loans feature long terms and reasonable interest rates. Approval considers factors beyond just credit card volume.
  • Business lines of credit – Revolving credit lines let you access funds as needed. Pay interest only on amounts used.
  • Equipment financing – Loans using owned equipment as collateral can provide lump sums or revolving credit. Payments are fixed regardless of business fluctuations.
  • Invoice factoring – Sell unpaid customer invoices to quickly access 85-90% of their face value. The balance minus fees releases upon customer payment.
  • Asset-based loans – Pledge real estate, vehicles, or other property as collateral in exchange for affordable loan terms.
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Review financing options carefully before accepting merchant cash advances. Consult both lawyers and financial advisors to determine the best funding strategies for your business while limiting legal and financial risks from potential repayment challenges.

Don’t Wait to Get Help

Facing merchant cash advance default can be overwhelming for Oklahoma City business owners. Fears of legal action, bank levies, and asset seizures often paralyze people from taking action.But seeking qualified legal and financial help promptly gives you the best chance of resolving debts favorably while avoiding long-term damage. With proper guidance, many small businesses navigate these situations successfully.Connect today with experienced Oklahoma City business debt relief lawyers. They offer free consultations to review your situation, explain all options, and build a customized action plan. The sooner you call, the quicker you can move towards financial freedom!

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