Seattle Merchant Cash Advance Legal Help – Attorneys, Debt Settlement
Merchant cash advances can seem like easy money for small business owners, but they often come with predatory terms and sky-high interest rates that can quickly spiral out of control. If you’re a Seattle business owner struggling under the weight of merchant cash advance debt, don’t panic – help is available.In this article, we’ll walk through the ins and outs of merchant cash advances, your legal rights and defenses as a borrower, and how an experienced business debt attorney can help you negotiate settlements or defend against lawsuits.
What is a Merchant Cash Advance?
A merchant cash advance (MCA) is a form of business financing where a lender provides a lump sum of cash in exchange for a percentage of future credit card and debit card sales. It’s not technically a loan under Washington law, but functions similarly.Here’s how it works:
-- The MCA company provides an upfront sum, usually between $5,000 – $500,000
- In exchange, the business agrees to pay back the advance through daily or weekly debits from their credit card processing account
- The total amount repaid is a multiple of the original advance (often 1.2x – 2x)
- There’s no set repayment schedule – the debited amounts fluctuate based on credit card sales volume
This quick access to capital can be a lifeline for struggling small businesses. But merchant cash advance companies often target desperate business owners with misleading claims and fail to adequately disclose the risks.
Predatory Tactics in Merchant Cash Advances
While not all MCAs are predatory, many rely on aggressive and deceptive tactics, including:
- Exorbitant interest rates – MCA rates often translate to over 100% APR when calculated as interest
- Overestimating repayment ability – MCA companies may advance too much cash for the business to reasonably pay back
- Failing to disclose terms – Key details like rates, repayment amounts, and fees are often obscured in fine print
- Reselling debt – MCA debts may be repackaged and resold to third-party collectors
- Aggressive collections – Tactics like daily debiting or threats of bankruptcy may be used to strongarm repayment
These predatory practices sink countless small businesses – so if you’ve been targeted, what are your options?
Legal Rights & Defenses Against Predatory Merchant Cash Advances
The good news is that Washington law provides important protections and defenses for small business owners facing MCA debt collection pressure.Potential claims include:
-Usury Defenses
- MCA agreements may violate state usury laws against excessively high interest rates
- Usury claims can invalidate debts or lead to damages for improper lending
Deceptive Practice Protections
- Predatory MCA marketing and contracting likely violates consumer protection laws
- Businesses may sue for damages related to deceptive interest rates or repayment terms
Unconscionability Claims
- One-sided MCA contracts that unreasonably favor lenders may be ruled unenforceable
- This contract defense relies on showing shockingly unfair terms and bargaining conditions
RICO Violations
- MCA companies increasingly face Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuits
- RICO claims allege that predatory lending relies on criminal schemes to defraud small businesses
So if you believe an MCA company has acted illegally or deceptively, you have options. But gathering evidence and navigating complex state and federal laws is difficult without legal guidance.
How Can A Business Attorney Help?
The business attorneys at Delancey Street specialize in representing Seattle small business owners against MCA harassment and lawsuits. We leverage our in-depth knowledge of Washington lending laws, contract defenses, and creditor negotiations to protect our clients.Our services include:
- Contract review – We thoroughly analyze MCA agreements to spot unlawful terms and build legal arguments
- Demand letters – We send formal demands to the MCA company outlining violations of law and demanding remedy
- Lawsuit defense – If sued over MCA debt, our lawyers defend clients in court against breach of contract and other claims
- Settlement negotiation – We negotiate directly with MCA lenders and debt collectors to reduce balances and create affordable payment plans
- Credit repair assistance – We help document MCA predatory behavior to dispute negatives on your business credit report
The complexity of merchant cash advance litigation favors companies with teams of aggressive attorneys. But by partnering with our firm, Seattle small business owners can go toe-to-toe against even the most ruthless MCA lenders.
You Have Options – The Fight Starts Here
If an MCA has your business teetering on the edge, take back control today. Schedule a free case review with our team to discuss your situation confidentially. We’ll help you understand your rights, review your contract line-by-line, and outline your best path forward.You invested blood, sweat and tears into building your Seattle business – don’t let predatory lenders steal your American dream. Fight back with the help of a dedicated legal team on your side.