Los Angeles MCA Defense Lawyers
You are small business owner in LA, working hard to keep your dream alive. Suddenly, that merchant cash advance you took to cover difficult time becomes big problem. Aggressive collectors call your phone often, high fees eat your profits, and you wonder if your business will survive next month. We understand your situation. It is scary and overwhelming. But listen: you are not alone, and you have legal options available to you.
Let us explain what you are facing with MCAs and how to fight against it using legal means.
Understanding Merchant Cash Advances
First, we must define MCA. It is not loan in traditional legal sense. It is more like selling part of your future income. You receive money now, and MCA provider gets portion of your daily credit card sales until you repay advance plus their fees.
This may sound simple, but it becomes legally complex. Because MCAs are not technically loans, they often avoid normal lending laws. This results in very high interest rates that would be illegal for standard loans. We are talking about annual percentage rates (APRs) that can exceed 100%.
It is like playing high-risk game where rules are unfair. You might get quick money, but legal risks are significant from beginning.
Legal Risks for Los Angeles Businesses Taking MCAs
You may think MCA is just another business expense. But from legal perspective, these agreements can be very dangerous and could harm your entire business.
Some MCA providers use practices that may be considered predatory lending under law. They offer cash when you are desperate, knowing you will struggle to repay. The fees are often hidden in lengthy documents, designed to confuse and possibly violate disclosure laws.
Legal problems do not end there. If you fall behind on payments, collection methods can become aggressive and possibly illegal. We have seen cases where MCA providers harass business owners, violating debt collection laws, and threaten to seize assets illegally.
Your business credit is also at risk. Defaulting on MCA might lead to legal actions affecting your credit for many years.
Your Rights as Small Business Owner Under Law
You may feel trapped legally, but you have rights. There are laws to protect you.
In California, Financing Law (Cal. Fin. Code § 22000 et seq.) sets legal rules for alternative lending. It may not apply directly to all MCAs, but it provides legal standards to challenge unfair agreements in court.
Federal law also helps. FTC Act (15 U.S.C. § 45) prohibits unfair or deceptive business practices. If MCA provider misled you about terms or fees, you can fight back using federal law.
Recent legal developments are promising. Some courts now see through “not a loan” argument. In New York case Fleetwood Services, LLC v. Ram Capital Funding, LLC (2022), court ruled some MCAs are actually loans subject to usury laws. While not binding in California, it shows legal thinking may be changing.
Main point: you have legal power. There are ways to challenge these agreements and protect your business using law.
How MCA Defense Lawyer Can Help
If you face legal trouble with MCA, skilled defense lawyer can make big difference. Here is what we do as lawyers:
- Contract analysis: We examine MCA agreement carefully, looking for violations of state or federal law.
- Legal negotiation: We negotiate with MCA provider to get better terms or settlement using legal arguments.
- Court litigation: If necessary, we take your case to court. We have experience with difficult cases and know how to find legal weaknesses in MCA provider’s arguments.
- Debt relief options: We explain all legal choices, including Chapter 11 reorganization if appropriate.
For example, we helped restaurant owner who took MCA for equipment. When provider threatened legal action, we challenged agreement based on deceptive practices. We reduced repayment amount by 40% through legal negotiation. Now business thrives without legal problems.
This is our job: we use law to fight for small businesses against entities that may violate laws.
Choosing Right MCA Defense Attorney in Los Angeles
When fighting MCA provider legally, you need experienced lawyer. Look for:
- Legal experience with MCA cases in court
- Knowledge of California MCA laws and regulations
- Successful history in reducing debts, cancelling contracts, or getting settlements
- Focus on clients’ specific legal needs
Our law firm meets these qualifications. We have fought hard legal battles, helping small business owners against lenders who may break laws.
Taking Legal Action: Steps to Protect Your Business
If you are ready to challenge MCA provider legally, consider this strategy:
- Recognize signs of potentially illegal MCA:
- Pressure to sign quickly without full explanation (may violate disclosure laws)
- Confusing language about fees and repayment (possible contract law violation)
- Promises that seem too good legally (often violate some law)
- Document everything for legal purposes: payments, communications, business impacts.
- Seek legal help early. More options exist when you act quickly.
We offer free legal consultations to discuss your situation and choices. Remember, you do not face this alone in legal system. We are ready to fight for your business using all legal means.
Do not let MCA take everything you worked for through possibly illegal methods. Call us for legal help. Together, we can show these entities that LA small businesses will not give up without legal fight.