Ohio MCA Defense Lawyers

Ohio business owners, who work tirelessly to build their companies, should be extremely cautious and on the lookout for MCA lenders—yes, those infamous Merchant Cash Advance predators who are notorious for targeting and taking advantage of hard-working business owners like you by exploiting legal loopholes in lending practices. These predatory lenders are actively seeking opportunities to swoop in and seize your hard-earned cash and profit by using unfair tactics that burden your business with outrageous fees and suffocating repayment terms. Let’s dig deeply and thoroughly into how dedicated and passionate Ohio MCA defense lawyers, who genuinely care about protecting business owners, fight back aggressively against these unfair and unjust lending practices. These lawyers work to win cases either partially, when necessary, or fully, when possible, but always with a strategic and methodical approach based on a deep understanding of Ohio’s state laws, historical legal precedents, and the complex tactics that are used in the courtroom. Ohio’s strict usury laws, which are designed to protect borrowers from lenders who charge excessively high interest rates, serve as one of the foundational pillars in defense cases. Under Ohio Rev. Code Ann. § 1343.01, the state of Ohio has capped general loan interest at 8% unless other specific terms are agreed upon and specified in the contract, which gives borrowers some level of security and protection.

However, despite this law, MCA lenders sneak through a legal loophole in the system by claiming that their so-called financial agreements are not technically classified as “loans.” Instead, they argue that they’re merely “purchasing future receivables,” which is their way of trying to dodge and evade those important interest rate caps that normally apply to loans and protect business owners from exploitation. But, in reality, Ohio MCA defense attorneys, who are seasoned in fighting these predators, don’t let these deceptive lenders get away with such underhanded tricks. They aggressively push back in court by challenging the legal definitions and fighting to have MCAs classified as loans, which brings them under the protection of state usury laws. Past rulings matter, especially in cases like these where businesses are at risk, and Ohio courts regularly look to past legal decisions, such as the influential case of Champion Auto Sales, LLC v. Pearl Beta Funding, LLC (2017). In this New York case, which has become a crucial reference point, an MCA deal was ultimately ruled to be a loan, and this ruling was significant because it set a valuable precedent. The court found that the MCA lender acted more like a traditional lender, rather than a purchaser of receivables, and Ohio lawyers now use this precedent to frame their arguments and build their cases around the same legal principles.

Shifting Classification & Fees

This important shift in classification is crucial because it allows Ohio attorneys to apply the powerful protection of usury laws, which are designed to prevent predatory lenders from taking advantage of businesses by charging devilishly high interest rates, which regularly hit triple digits in some cases, leaving businesses drowning in debt. When courts recognize these rates for what they are—predatory lending, plain and simple—Ohio MCA defense attorneys can push for relief. To add more insight, in Fleetwood Services v. Complete Business Solutions Group, Inc., the court found that the MCA deal was, in fact, a loan because the lender had too much control over repayments and terms, which made it function as a traditional loan rather than the sale of future receivables. This case, like the one before, is leveraged by Ohio MCA defense attorneys to argue similar points and provide legal protection for vulnerable business owners.

• Let’s talk about personal guarantees—those hidden traps that MCA lenders love to sneak into contracts in order to trap business owners and force them into dire situations.
• These personal guarantees essentially mean that, when your business is no longer able to make its payments because of the overwhelming repayment demands, the MCA lenders come after your personal assets—your home, your car, your savings—everything you’ve worked hard to build.
• Thankfully, Ohio defense lawyers, who understand the emotional toll this can take on business owners, regularly get personal guarantees thrown out and dismissed from the case.

Ohio’s statute of limitations on debt collections can also come into play as a crucial defense tool. For written contracts, the statute of limitations is 8 years under Ohio Rev. Code Ann. § 2305.06, which essentially means that if the MCA lender hasn’t taken action within that 8-year timeframe, they lose their legal right to enforce the debt. And, believe it or not, MCA lenders often miss this window due to their disorganized and sometimes predatory practices. Ohio MCA defense lawyers skillfully use this to their clients’ advantage, successfully preventing lenders from collecting on debts that are legally unenforceable.

A Personal Story

Here’s a personal story from my experience: I represented an Ohio small business—let’s call them “X Construction.” They were a local family-run construction company that had been drowning in a $150k MCA debt due to the overwhelming daily repayment requirements. The lender had locked them into harsh repayment terms that left the business unable to keep up with the payments, but there was a silver lining. The MCA contract wasn’t properly disclosed under the federal Truth in Lending Act (TILA) laws, which require clear and accurate disclosures of loan terms. We carefully analyzed the contract and shredded it in court based on this violation. MCA lenders hate Ohio’s Consumer Sales Practices Act (CSPA) under Ohio Rev. Code Ann. § 1345.01, which is typically applied to protect consumers in the sale of goods and services, but clever and strategic attorneys have found ways to apply it when MCA lenders violate fair business practices by misleading business owners. MCA defense lawyers file lawsuits under this statute when lenders engage in deception and fraud.

When it comes to excessive fees and penalties, Ohio courts have little tolerance for unreasonable charges. In O’Brien v. Blue Sky, Inc., an Ohio court ruled that fees imposed by lenders should be reasonable and directly related to the actual damage suffered by the lender, not arbitrary penalties that serve only to enrich the lender at the expense of the borrower. Ohio MCA defense lawyers love to argue that excessive fees violate UCC Article 9, which governs secured transactions and is used to regulate the relationship between debtors and secured creditors. It’s argued that the penalties MCAs charge are not legitimate secured interest charges but instead function as money grabs, and the courts are willing to listen when this argument is presented clearly and effectively.

Good Faith & Arbitration Clauses

Have you ever heard of good faith and fair dealing? This is a powerful legal doctrine that Ohio MCA defense lawyers wield like a weapon to fight back against unfair lending practices. In Ohio Rev. Code Ann. § 1301.304, it’s required that every contract must be performed in good faith, meaning that the parties involved must act honestly and fairly with one another. When MCA lenders shift terms, hide fees, or suddenly change repayment schedules without proper disclosure, they violate this principle of good faith, and Ohio lawyers can use this violation to get the terms changed or even get the contract thrown out entirely. Now, let’s talk about arbitration clauses—those sneaky little clauses that MCA contracts love to include, binding business owners to resolve disputes privately through arbitration, which is often held in the lender’s backyard and favors the lender. But Ohio lawyers, who truly care about fairness, know how to argue that these clauses are unconscionable and should be nullified. This keeps the case in Ohio courts, where business owners have a much better chance of getting a fair outcome.

In Taylor Building Corp. of America v. Benfield, the Ohio Supreme Court ruled that arbitration clauses can be unconscionable, especially when there’s a significant imbalance of power between the parties, such as when a large, powerful lender imposes unfair terms on a small, struggling business. We’ve leveraged that precedent to bring MCA cases into our courtrooms, where they belong. Ohio courts also allow for affirmative defenses that MCA defense lawyers regularly use, such as fraud in the inducement, which means that the MCA lender misled the business owner about the terms of the deal or concealed the devastating consequences of the contract.

Fraud in the Inducement & Forum Shopping

For example, in one case where I defended a Cincinnati-based retailer, we used fraud in the inducement to show that the MCA lender had outright lied about the repayment burden, hiding key details in the fine print. The judge agreed with our argument, and the result was a 70% reduction in the debt owed, saving the retailer from going out of business. Here’s where MCA lawyers get crafty—forum shopping. MCAs often try to force cases out of Ohio and into other jurisdictions where the laws are more “favorable” to lenders. But Ohio Rev. Code Ann. § 2307.39 allows courts to refuse jurisdiction if it’s clearly unfair to the Ohio-based business.

To stop this tactic, Ohio MCA defense lawyers argue “inconvenient forum” by gathering strong evidence to show that moving the case would be unjust and overly burdensome for the business owner. This important legal tactic keeps cases local and under Ohio law, where business owners have a much better chance of standing up to the predatory lenders in their own state.

Receiverships & Debt Restructuring

When Ohio business owners feel like they have no more options and think that all hope is lost, receivership can come into play as a strategic tool. Ohio MCA defense lawyers sometimes petition the court to appoint a receiver to manage the business’s finances, preventing MCA lenders from collecting directly and giving the business some much-needed breathing room to stabilize.

Receiverships are a strategic and temporary move, giving businesses the time they need to stabilize, reorganize, and ultimately exit from under the crushing pressure of MCA debt without experiencing total financial collapse. What’s absolutely critical here is MCA lenders’ misrepresentations—they rarely, if ever, disclose to businesses the full scope of the contract or the true impact of fluctuating daily payments. Ohio MCA defense lawyers meticulously point out every misleading statement or lack of transparency, from hidden fees to unclear repayment terms.

Ohio courts regularly rule against these predatory practices when an attorney can clearly show that the MCA lender acted deceptively. This often results in partial wins for the business owner, such as lowering the repayment amount or restructuring the terms to make them more favorable to the business. Let’s not forget the importance of debt restructuring, which is a key strategy that Ohio MCA defense attorneys often use in collaboration with financial consultants to propose alternative repayment plans that allow the business to survive and continue operating.

Bottom Line

Ohio MCA defense lawyers like myself don’t just defend, we save businesses—over 1000 businesses that were on the brink of closing due to MCA lender predation. We step in, stop the financial bleeding, and create real, workable solutions for businesses that are drowning in debt. Bottom line? The fight against MCA lenders is an incredibly tough battle, but with Ohio’s state laws, powerful legal precedents, and the determination of a tough defense attorney who genuinely cares about helping business owners, you can stand up and fight back. Don’t let MCA lenders crush your business. Need help fighting an MCA lender? Ohio MCA defense lawyers are here, ready and fully prepared to protect your business and help you win your case. Reach out today, and let’s work together to ensure that the predators don’t win.