Omaha MCA Defense Lawyers
Omaha MCA Defense Lawyers, who focus on helping business owners in Nebraska and beyond, are often considered the hidden champions when it comes to pushing back against the aggressive and sometimes unfair methods used by Merchant Cash Advance (MCA) collections companies, which try to overwhelm small business owners with heavy repayment schedules. Many people might not know that Nebraska’s Uniform Commercial Code (UCC) laws offer unique and important defenses for small business owners who may have been unknowingly trapped by these complicated MCA agreements. These MCA agreements usually claim to be simple purchases of future receivables, but when you take a closer look at Nebraska Statute 45-1209, you’ll see that MCA companies can actually be caught under strict usury laws in Nebraska if the so-called “purchase” ends up looking more like a loan in disguise, especially in situations where the repayment is almost guaranteed, leaving the business with no room to negotiate.
Key Legal Strategies for MCA Defense
One of the most important and often-used strategies that MCA defense lawyers use is proving, through careful legal arguments, that the MCA agreement in question is really a loan and not a purchase of receivables, which completely changes the nature of the legal fight. This vital strategy shifts the battle away from being governed by contract law and places it firmly within the more regulated area of lending law, which provides business owners with far more legal protections. Take, for example, New York’s McKay v. Lenders Funding, LLC (2020), a key and game-changing case where the courts ruled that a similar MCA agreement, which was supposedly a purchase of receivables, was really a loan. This important legal case has had far-reaching consequences for small businesses, including those in Omaha, giving them an advantage in court. Another highly effective approach involves using defenses under Nebraska’s Deceptive Trade Practices Act, a powerful state law designed to protect consumers and business owners alike from tricky, misleading, or unfair business practices. MCA companies often fail to fully share key terms, especially about Annual Percentage Rates (APR), and this failure to provide critical information can give a solid ground for a winning defense that takes full advantage of this law.
The Unfairness Doctrine and Precedent
MCA defense attorneys will often also rely on what’s called the Unfairness Doctrine, a legal idea that lets courts throw out contracts that are so unfair and one-sided that they make the court take notice. If a court sees that the terms of the MCA agreement were extremely unfair or tough on the business owner—such as excessive fees or relentless repayment schedules that make it nearly impossible for a business to stay financially afloat—the court might decide to throw out the contract completely. This idea is especially strong when used along with other defenses. The key to making this argument work well is showing just how unequal and unfair the deal really was by pointing out the big difference in the contract terms. For example, the court case Fleetwood Servs., LLC v. Complete Bus. Sols. Grp., Inc. (2021) is especially important here. In that case, courts were willing to look at the fairness of an MCA contract when it became clear that fraud, lying, or unfair terms were involved in the deal. This gives Omaha attorneys strong leverage, as they can point to this case when building their defense strategies for small businesses in similar situations.
Nebraska’s Unique Legal Rules
Nebraska law, like every state, also has some unique rules, especially when it comes to how secured transactions are handled under UCC Article 9. MCA companies, which often secure their future receivables as a promise for the money given, must follow certain steps to correctly file a UCC-1 financing statement. If they fail to do it right, or if they make an error in the filing process, their claim on your assets could be invalid, providing a potential way out for the business to escape some of the MCA company’s demands. Additionally, defense lawyers in Omaha often challenge the issue of arbitration clauses that are buried in MCA agreements. These agreements typically force businesses into arbitration, where decisions are made outside of court, and MCA companies tend to have the upper hand. However, under Nebraska law, these arbitration agreements can be challenged if they are found to be too one-sided or if they try to take away important rights that the business owner would otherwise have under state or federal law.
Partial Wins Matter
MCA defense isn’t always about getting a full and total win—sometimes partial victories are just as important when trying to save a small business from financial disaster. Lawyers can often work out debt restructuring, which means lowering the amount of principal owed or removing excessive and unfair fees, which can make the repayment terms easier for the business. These small victories add up when you are working to protect your business and keep it running in tough financial times. The truth is that MCA defense takes a deep understanding of both state and federal law, as how these laws work together often decides the result of a case. When you’re backed into a corner, knowing and fully understanding your legal rights—down to every last detail—can make the difference between surviving or going out of business for a small company.