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Raleigh Merchant Cash Advance Lawyers Can Provide Debt Relief

Running a small business is tough. You have to worry about paying employees, keeping customers happy, managing inventory, and a million other things. With all those plates spinning, it can be tempting to take out a merchant cash advance loan to keep things running smoothly when cash gets tight. But those loans come with sky high interest rates and aggressive collection tactics if you fall behind on payments. If you took out a merchant cash advance loan and are struggling to pay it back, Raleigh merchant cash advance lawyers may be able to help.

How Merchant Cash Advances Work

Merchant cash advance loans seem like an easy way to get quick cash when you need it to cover short term cash flow issues. The lender provides you an upfront lump sum of cash in exchange for a percentage of your future credit card and debit card sales. There’s no set repayment schedule – instead, the lender takes a fixed percentage of your daily credit card receipts until the balance has been repaid in full plus fees and interest.That flexibility makes merchant cash advances appealing. If business is good, you repay the advance quickly. When sales dip, your payments dip too. But there’s a dark side to that flexibility for the borrower – sky high interest rates often exceeding 100% APR when all the fees are included. By tying repayment directly to credit card sales, the lender also gains unprecedented access to the financial workings of your business. They can monitor credit card batches in real time and take their cut off the top before you ever touch the money. If they don’t like what they see, they can raid your bank account directly to get what they say you owe.

Aggressive Collection Tactics

Many merchant cash advance lenders rely on aggressive – sometimes harassing or even illegal – collection tactics. They may:

  • Call you constantly demanding repayment
  • Threaten to ruin your credit score
  • File an illegal confessions of judgement
  • Freeze or raid business bank accounts
  • Go after personal assets even if you formed an LLC or corporation
  • Charge outrageous fees if a payment is late or comes up short

Most business owners who take out a merchant cash advance loan just want temporary help paying the bills while they get back on sound financial footing. They don’t expect predatory collection practices that seem more like strong-arm mob tactics than reasonable debt collection.

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Your Legal Options

If you’re struggling to repay a business cash advance in Raleigh, Raleigh merchant cash advance lawyers may be able to help in a few key ways:

Disputing Harassment

Debt collection harassment violates state and federal law. Your lawyer can send a cease and desist letter demanding the harassment stop immediately. Failure to comply can lead to statutory damages of $500 – $4,000 per violation.

Identifying Unfair Lending Practices

Shady merchant cash advance lenders often fail to properly disclose terms like the annual percentage rate and total repayment costs. That may make the loan void or allow you to sue for violations of lending transparency laws.

Challenging Confessions of Judgement

Lenders will sometimes get business owners to sign a confession of judgement admitting default on the loan and allowing the lender to seize assets. But those documents violate due process rights when used to freeze bank accounts or otherwise collect debt without filing a lawsuit. Your lawyer can challenge enforcement to regain control of raided business accounts.

Forcing Debt Validation

Under the federal Fair Debt Collection Practices Act, you have the right to demand verification if you believe you do not actually owe the amount claimed or that the creditor lacks documentation to back up the debt. The collector must cease collection efforts until they provide proof the debt is valid.

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Filing for Bankruptcy

Declaring bankruptcy stops collection activity in its tracks, eliminating harassment. It can also discharge part or all of the merchant cash advance debt so you can make a fresh start. Your lawyer will assess whether Chapter 7 or Chapter 13 offers the best path forward.

Turn to Raleigh Merchant Cash Advance Lawyers for Help

Falling behind on repaying a business cash advance loan doesn’t make you a deadbeat. It means you need legal help standing up to predatory lenders. The skilled business attorneys at Delancey Street offer compassionate guidance tailored to your situation. We’ll listen to your story, answer your questions in plain English, then map out a game plan to resolve merchant cash advance debt. Reach out today online or call (919) 828-5250 to schedule a free consultation.


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