Colorado Springs MCA Defense Lawyers
In the crowded city of Colorado Springs, many small business owners—whether they run restaurants, small shops, or even local service providers—are facing their worst nightmare in the form of Merchant Cash Advances (MCAs), which seem like quick financial help but are actually dangerous financial traps that can lead to catastrophic consequences for their businesses and personal livelihoods. Picture the relentless, greedy claws of these MCA lenders, digging deeper into your business’s profits, your livelihood, and even the peace of mind that you need to keep your business running smoothly. I’ve personally watched too many hardworking business owners, who have spent years building their companies, come terrifyingly close to financial ruin because of these dangerous loans. But here’s an important truth—these loans can be fought in court with strong legal strategies, and even if it’s just a partial win, an experienced MCA defense lawyer knows exactly how to chip away at their unfair tactics and win meaningful victories.
MCAs often hide behind unclear and intentionally tricky contract language, which is designed to mislead the borrower and make it hard to challenge them in court. But I’ve battled these types of contracts over and over again, and with persistence, we can find ways to expose the MCA lenders for their predatory practices. In the state of Colorado, under Title 5 of the Colorado Revised Statutes, MCA lenders are not allowed to charge interest rates beyond the legally permitted limits, giving us a legal advantage when challenging these agreements. This law means that if your MCA lender is bleeding you dry with sky-high interest rates, we have a clear legal basis to fight back by arguing the rates are too high and unlawful.
Excessive Interest Rates and Usury Laws
One case I handled in Colorado Springs involved an MCA lender charging a shocking 40% interest rate, well beyond the state’s usury cap of 21%, making it a clear violation of Colorado’s interest rate limits. That was an easy point to attack in court, because high interest rates are the MCA’s weak point, a spot we can target to bring the entire loan agreement under scrutiny. Think about it—why should a small business owner, who is already struggling, be forced to pay 40% interest for what is essentially a short-term cash advance? It’s highway robbery, and it’s also a violation of Colorado’s laws, which makes it completely beatable if we challenge it the right way.
Another important legal protection is the Uniform Commercial Code (UCC), which governs how lenders can secure and enforce loans. MCA lenders love to slap UCC liens on businesses, allowing them to take assets if the borrower defaults, but the law provides protections. Under UCC-9-203(b), lenders can only take specific assets, not everything you own. This is a major point of leverage in MCA defense cases because many lenders try to overreach by claiming more than they’re legally entitled to take.
- UCC liens must be clear and specific, meaning lenders cannot make blanket claims on all assets.
- Many MCAs file liens without properly describing the collateral, giving us a strong argument to fight back.
In one Colorado Springs case, I successfully got a lien narrowed down to just one piece of equipment, saving my client’s entire inventory from being taken, allowing him to continue running his business. This wasn’t a complete win, but it was a critical partial victory that allowed my client to stay afloat—more like a lifeline than just a small win.
Challenging Deceptive Loan Practices
MCA agreements frequently break the Truth in Lending Act (TILA), a federal law that requires lenders to disclose the true cost of the loan, including all fees and interest, in a clear and easy-to-understand way. This law protects borrowers from lenders who hide behind complicated terms and fees. Under federal law, borrowers must be told the Annual Percentage Rate (APR), the true cost of borrowing, in simple, clear terms without hidden fees or tricky language. MCAs often skip this requirement, hiding the true costs, giving us another way to fight back.
When an MCA fails to disclose the total repayment amounts or the true APR, they’re often breaking state laws too. In Michigan, for example, a lender failed to disclose the real APR, and the court sided with the business owner, cutting their payments. That case, set in Michigan, echoes through every MCA defense case across the country, including Colorado, giving us a powerful tool in court.
In Colorado, MCA lenders claim that payments are based on a percentage of revenue, making them not loans. This tactic is designed to dodge state usury laws, which limit interest rates on loans. But here’s where we catch them: When the payment structure looks and works like a loan, courts often treat it as one, regardless of what the MCA calls it. Renaming a loan doesn’t bypass usury caps meant to protect business owners.
I’ve seen MCA lenders in Colorado argue that an MCA is not a loan, claiming it’s just a purchase of future receivables. But if it quacks like a loan and walks like a loan, it should be treated as a loan. This legal argument was set in In re Talsma, which created a case that future receivables look more like loans than sales, and we’ll argue the same to help you.
Violating Consumer Protection Laws
Another key law we can use in Colorado is the Colorado Uniform Consumer Credit Code (UCCC), which limits how much lenders can charge in fees, penalties, and interest. If your MCA contract breaks this code by charging too much in fees or unreasonable penalties, we have a strong case to challenge those charges and get them lowered. This is a partial win that I’ve seen over and over again. Arbitration clauses are another tool MCAs use. MCAs love including mandatory arbitration clauses that force business owners into private, one-sided proceedings. But under Colorado’s Arbitration Fairness Act, I’ve been able to challenge these clauses, bringing cases back to public court, where we can expose the MCA’s tactics.
In one case, the MCA lender tried to enforce their arbitration clause, thinking they could escape scrutiny. But when we showed that the clause was one-sided and favored the lender, the judge threw it out, sending the case back to public court. That’s how you win—by exposing their unfair clauses and making them face consequences.
Unfair Business Practices and Legal Precedents
Courts in New York have been ruling on arbitration cases, such as Abrams v. MCA Lenders, pulling apart the predatory tactics of MCA lenders bit by bit. Colorado judges refer to rulings from New York, strengthening our arguments. Colorado’s Consumer Protection Act prevents predatory lending practices and deceptive tactics. MCA defense lawyers use this to argue lenders engaged in unfair business practices. I’ve seen this work in cases where the lender misrepresented terms.
In one case, the lender misrepresented the agreement, then slid different terms into the written contract. That’s deceptive practice, and under C.R.S. § 6-1-105, it’s illegal. California’s Unfair Competition Law also gives us examples. Colorado courts often look at rulings from other states, and McGill v. Citibank showed how deceptive terms lead to wins.
These battles—attacking arbitration clauses, UCC liens, and deceptive practices—are fought daily by MCA defense lawyers. It’s not always about one big win but chipping away at MCA control. Even a partial win can save a business from collapsing.
The Credit Services Organization Act: Another Tool
Another tool is the Colorado Credit Services Organization Act. Some MCA lenders act as credit services organizations, which means they must follow Colorado’s strict laws. If they don’t, it’s a violation we can use. In one case, we found an MCA lender hadn’t properly registered as a credit service organization, and that small violation helped us negotiate a lower settlement for the business owner.
Colorado Springs business owners need to understand: MCA defense is not one-size-fits-all. Every case is unique, and defending against an MCA is like chess, where every move is planned based on the contract, state laws, and past cases. With each win, we give business owners back their future.
Building a Case Against MCA Lenders
Many business owners don’t realize they have a legal defense. They see an MCA default notice and think it’s the end. But with an experienced MCA defense lawyer, it’s just the beginning. MCA defense lawyers aren’t just defending one business at a time; we’re creating ripples in the legal system. Every partial win builds a group of case law for future lawyers. We’re changing how courts see MCAs—as financial traps, not simple agreements.
Precedents from Other States Matter
Legal cases matter, and in New York, courts are ruling against MCA lenders on the grounds of deceptive practices. These New York cases are setting the standard, and little by little, we’re winning the battle. The bottom line: MCA lenders want you to think they hold the power, but MCA defense lawyers know the cracks in their system. We’ve seen their hidden fees and unfair terms and know how to fight back.
It’s not always about getting out of the contract, though that’s ideal. Sometimes, we cut the debt, negotiate, or stop penalties. Partial wins can be life-changing for struggling business owners.
Taking Back Control from MCA Lenders
MCA lenders rely on business owners not knowing their rights. They expect you to give up, but you have options. With the right legal team, you can fight back and protect your business.
If you’re in Colorado Springs, and an MCA lender is on your back, talk to an MCA defense lawyer, review your contract, and start looking for weak points. Together, we’ll find a way to win—even if it’s a partial victory.
The Final Push: MCA Defense is a Lifeline
Every case is different, but the goal is the same—saving your business. Whether through negotiating, challenging a UCC lien, or fighting arbitration clauses, there’s a way to push back.
MCAs are designed to keep you trapped in debt, but we know how to set you free. We’ll use every law, case, and rule to get you relief. It won’t be easy, but it will be worth it.
If you need help, talk to an MCA defense lawyer. This isn’t just a job—it’s a mission. After seeing so many businesses saved, I know what’s possible when you have the right legal team on your side.