New Mexico Merchant Cash Advance Attorneys
Let’s talk about Merchant Cash Advances (MCAs). They sound simple, but if you’re a small business in New Mexico, they can be a financial nightmare. Legal battles with MCA companies are tough—but winnable. Let’s break down why hiring a good MCA defense lawyer is crucial. MCAs are NOT loans. Instead, they involve selling a portion of future receivables. Why does this matter? Because unlike loans, where repayment is fixed, an MCA repayment depends on your sales. However, many funders push it like a loan, and that’s where the legal tricks come into play. A New Mexico MCA defense lawyer can challenge whether the MCA agreement is truly an MCA or disguised as a loan. Loans are subject to strict lending laws (like the New Mexico Small Loan Act), while MCAs operate in a legal gray area. Catching this distinction can be key to winning a case.
Legal Strategies Against Confessions of Judgment (COJs)
Confessions of Judgment (COJ)—these are brutal. Signed one? A COJ allows the MCA funder to get a judgment without you even seeing a courtroom. New Mexico law protects you here, as COJs are illegal for out-of-state funders after the New York law change in 2019 (GrantPhillips). But some MCA funders are tricky—they might call it an “Agreed Judgment.” That’s why a sharp attorney will know how to argue this, saving your business from a judgment you didn’t deserve in the first place.
UCC Liens—How Attorneys Defend You
Let’s get into UCC liens—these allow MCA companies to freeze your business’s receivables before they even hit your bank account. If your lawyer acts fast, they can challenge the lien before it devastates your cash flow. UCC Liens are often abused by MCA funders. They’re supposed to secure unpaid debt, but funders can use them to freeze payments from clients, even from services you’ve already provided. A good attorney will move quickly to vacate or contest these liens, protecting your income.
State Laws & Legal Grounds for Winning Cases
MCA defense attorneys don’t just argue that the contract terms are unfair—they look for violations of state laws. For example, the New Mexico Unfair Practices Act (NMSA 1978, § 57-12-1) protects businesses from misleading and deceptive trade practices, which often appear in MCA contracts. Your defense lawyer might also use federal laws like RICO (Racketeer Influenced and Corrupt Organizations Act) to argue against MCA companies that operate like criminal enterprises by misrepresenting their contracts.
Legal Wins & Partial Victories
So, how does your attorney win? They can attack multiple angles—unfair terms, illegal practices, or even procedural mistakes by the MCA funders. Sometimes, it’s about winning partial victories: reducing payments, vacating judgments, or extending terms. Real-world example: In the case of Cruz v. New Mexico, a judge ruled that misleading financial agreements like MCAs, when pushed as traditional loans, can be voided. Your attorney can use these precedents to argue your case.
Importance of Challenging MCA Contracts
Lawyers in New Mexico are often up against out-of-state MCA companies, usually from New York, where these funders are based. Why? Because New York is the hub of MCA financing. But that doesn’t mean New Mexico lawyers can’t challenge them using local laws. When MCA contracts push repayment terms that are unconscionable, like daily payments so high they destroy your cash flow, your attorney can argue to have those terms thrown out. Unconscionable contracts are illegal under both New Mexico and federal law.
Excessive Fees & Hidden Penalties
Let’s talk fees. MCA contracts are loaded with fees—missed payments, default fees, legal fees—you name it. But did you know your attorney can contest these fees as excessive and punitive? Sometimes, just reducing these fees is enough to keep your business afloat. A strong MCA defense can get you out of predatory contracts by proving that the terms are unfair or deceptive. Courts have consistently thrown out contracts that don’t align with state lending laws. Your attorney will dig into every detail to protect your rights.
Partial Wins & Final Thoughts
What about partial wins? In many cases, attorneys don’t need to win the whole thing to make a huge impact. Cutting payments by 50% or vacating a judgment could mean the difference between survival and bankruptcy for your business. Bottom Line: Hiring a New Mexico MCA defense lawyer means you’re not just defending your business—you’re fighting back. From challenging UCC liens to COJs, your attorney has a toolbox full of strategies to keep funders at bay.