Philadelphia Merchant Cash Advance Legal Help – Finding the Right Attorney
Getting a merchant cash advance can seem like an easy way for a business to get quick funding. But sometimes, businesses struggle to pay back these advances as agreed. When legal issues arise, working with an experienced attorney is key. This article covers tips on finding the right legal help if you run into problems with your Philadelphia merchant cash advance.
Understanding Merchant Cash Advances
First, what exactly is a merchant cash advance (MCA)? Essentially, it‘s a lump sum payment provided to a business in exchange for a percentage of future credit card sales. There are usually no fixed monthly payments – the business pays back the advance as a percentage of daily credit card receipts.MCAs appeal to many small businesses because:
-- Funding can happen quickly, sometimes in as little as 24 hours
- There are typically no fixed monthly payments
- Personal credit scores often don’t matter
- Collateral isn’t required
However, the costs and terms of MCAs can also create legal issues down the road:
- Extremely high effective interest rates – often over 100% APR
- Aggressive daily repayment that takes a huge bite out of cash flow
- Vague contract terms that favor the MCA provider
So if your Philadelphia business runs into repayment issues or disputes with an MCA provider, where do you turn? An experienced business attorney can help you understand your rights and navigate the legal system.
Key Reasons to Work with a Lawyer
Here are some of the main reasons to connect with a lawyer if facing merchant cash advance legal problems:
Navigating the Contract
MCA contracts tend to strongly favor the funder and may contain terms that violate state laws. An attorney can review your agreement and identify areas that may be challenged from a legal perspective. For example, Pennsylvania has laws capping interest rates on loans, which may apply to MCAs.
-Communicating with the MCA Company
Once you fall behind on payments, communications with MCA providers often become aggressive and threatening. However, you maintain certain rights under state and federal debt collection laws. An lawyer can take over communications and ensure the MCA company follows fair debt practices.
Assessing Litigation Risk
If talks break down, MCA providers may threaten or even file a lawsuit to recover their investment. An attorney can evaluate the risk level here based on the contract terms and your specific situation. In many cases, businesses have strong defenses that can be presented in court.
Weighing Bankruptcy
While bankruptcy may damage your business’ credit, it can also discharge or eliminate debts like MCAs. An lawyer experienced in small business bankruptcy can advise if this path makes sense for your situation. They can handle the bankruptcy paperwork and process from start to finish.The key is acting quickly when issues arise by consulting an attorney right away. Early legal guidance can help minimize business disruptions and financial damage.
Finding the Right Philadelphia Merchant Cash Advance Attorney
If considering legal help for your MCA issues, make sure to choose an attorney with specific experience in this unique area. Here are important credentials to look for:
Specialized Expertise
Ask if the lawyer has handled MCA or business financing cases in the past. You want someone already familiar with the language and legal nuances surrounding merchant cash advances.
-Track Record of Results
Do some research online to read past client reviews and testimonials. Look for examples where the attorney has successfully resolved business disputes with MCA companies.
Affordable Fees
Be upfront about your budget constraints and find a lawyer who can tailor their services to your situation. Many attorneys offer free initial consultations and flexible payment plans.
Local Knowledge
Opt for an attorney familiar with Pennsylvania laws and the Philadelphia legal community. They can best leverage local resources and regulations to strengthen your case.Doing some due diligence here makes a big difference in the level of legal support you receive.
-Key Laws & Precedents Impacting MCAs
There are a variety of laws and legal precedents that may apply to MCA contract disputes or collections efforts:
Usury Laws
Pennsylvania usury law caps interest rates on loans under $50,000 at 6%. Rates up to 24% are allowed for business loans above $10,000. Since MCA repayments can translate to over 100% APR, arguments may exist that portions violate state law.
Fair Debt Collection Practices Act
This federal law limits certain aggressive collection tactics used by lenders and debt collectors. Violations may include deception, harassment, or threats.
Unfair Trade Practices
If MCA terms grossly favor the lender or contain intentional misrepresentations, claims may exist under state consumer protection laws.
Contract Defenses
Common law contract principles like unconscionability, duress, or incapacity can potentially invalidate questionable MCA agreement terms.So depending on the specifics of your case, a number of legal arguments may empower business owners against predatory merchant cash advance practices. The key is connecting with an experienced attorney to advise on the options.
What to Expect from Your Lawyer
Once you retain counsel, what exactly can you expect in the legal process? This may vary case-by-case, but some typical steps include:
- Reviewing Documents – The lawyer will analyze your MCA contract, communications, financial records, etc.
- Sending Letters – To start, your attorney may send letters disputing the repayment terms or amounts.
- Negotiating Settlement – They will likely attempt negotiations to reach a reasonable settlement or payment plan.
- Assessing Court Options – If talks fail, your lawyer will examine the risks and benefits of potential litigation.
- Managing Bankruptcy – If appropriate, they can initiate and handle declaring business bankruptcy to discharge the MCA debt.
Throughout the process, your attorney should provide clear legal advice in everyday language, not confusing legalese. Don‘t hesitate to ask plenty of questions. And make sure you understand the potential outcomes before agreeing to any offers or deals.
Don’t Delay Getting Help
Dealing with merchant cash advance legal issues can be stressful for any business owner. But the financial and operational impacts only grow worse over time if you ignore the problem. Connecting with an experienced attorney quickly is key to understanding your rights and resolving matters on favorable terms. So don‘t delay – seek out legal guidance right away if facing MCA repayment or collection disputes. The right lawyer can make a big difference in getting your business back on track.