Business Debt Relief Merchant Cash Advance Debt Relief

What’s the Real Deal with MCA Agreements?

Merchant Cash Advance (MCA) agreements are tricky – they’re often structured as purchases of future receivables, but can actually be treated as usurious loans under New York law. 🧐 How does this happen? Let’s break it down. One of the key legal battles involves whether MCA contracts are loans or true receivables purchases. If deemed a loan, usury laws kick in, limiting the interest rate lenders can charge. New York’s criminal usury cap is 25% interest for corporations. But guess what? MCA agreements often exceed this cap, disguised as something else. This gives defense lawyers a big argument in court. Take the case of Fleetwood Services LLC v. Richmond Capital—Second Circuit Court ruled that MCA agreements structured as loans can violate RICO laws if they exceed usury limits. A game-changer for defendants. Another key case: LG Funding vs. United Senior Properties. Here, the court found that the MCA lender’s reconciliation provisions were fake. Translation? It wasn’t a real purchase of receivables, but a disguised loan.

How Do Lawyers Prove These Agreements Are Loans?

Under New York law, if the MCA contract lacks a valid reconciliation provision—meaning merchants can’t adjust payments based on actual receivables—it’s likely a loan, not a sale. This turns the tables on lenders. The New York Attorney General recently won a case, voiding an MCA contract for lacking true reconciliation and imposing personal guarantees. These are the types of wins defense attorneys aim for. Does the MCA agreement include a finite term or require repayment regardless of sales? Another clue it might be a loan! This argument helps defense lawyers classify MCAs under usury laws. Defense lawyers also look at whether the MCA includes “recourse” if the merchant declares bankruptcy. If so, boom! It’s likely a loan, subject to New York’s strict usury caps. In Principis Cap., LLC v. I Do, Inc., the Second Circuit clarified the three-part test for whether MCA deals are usurious loans. These factors are crucial for defense lawyers.

Jurisdiction as a Game-Changer in Defense

MCA companies often sue in New York—but if the company wasn’t formed in New York, defense lawyers can get the case dismissed for lack of jurisdiction. 📜 This is a HUGE win for merchants. If a lender tries to garnish your out-of-state bank account after a New York judgment, it’s illegal. MCA defense lawyers can force a refund under the separate entity rule! One tactic defense lawyers use is showing that the MCA lender kept debiting payments even after the lawsuit was filed. Courts often dismiss the lender’s claims when this happens. In Weinberg Legal cases, MCA lenders continued to debit after filing lawsuits. These cases were dismissed or got summary judgment denied, giving merchants relief.

Small Legal Details Can Flip the Case

Does the MCA contract require sending bank statements to the lender? Many MCA agreements do, but if it’s too restrictive, courts can declare the contract a sham. Defense attorneys LOVE this argument. A crucial defense is proving that the MCA funder debited directly from the merchant’s bank account instead of actual receivables. Courts hate this practice—it shows the risk didn’t transfer to the lender. In People vs. Richmond Capital, the court found that requiring merchants to send bank statements and ignoring receivables was a sham practice. This ruling helps defense attorneys win cases across the board. Lenders will argue that their agreement is a “purchase,” not a loan. Defense attorneys counter by showing how the contract functions as a loan in practice—usury caps apply! 💡 Defense lawyers also challenge the personal guarantees included in MCA agreements. If a lender can go after personal assets, courts might reclassify the MCA as a loan.

Winning with Out-of-State Jurisdiction

For MCA companies that aren’t based in New York, courts can dismiss the case based on jurisdiction. This is a powerful tool to get merchants out of lawsuits altogether. 🌍 These are just a few key strategies that New York MCA defense lawyers use to win cases—even partially. Whether it’s usury caps, fake reconciliation provisions, or jurisdiction challenges, lawyers have plenty of legal tools to fight predatory MCA agreements! Defense strategies keep evolving, and merchants can absolutely fight back against MCAs that act like loans. 💪 If you’re in a tough MCA battle, remember: the law is on your side, and skilled attorneys can help you win.

If you’re stuck in a Merchant Cash Advance (MCA), you probably’ feel like you’re drowning in debt. But there’s hope, and yes, attorneys’ can win these cases—sometimes, even a partial win. First thing you need to know is that MCA’s are NOT traditional loans. MCA’s are agreements where a lender buys a percentage of your future credit card sales. No’ typical loan rules apply. Many MCAs operate in legal gray areas. That’s where lawyers step in to argue that certain agreements are unfair or even illegal.

Usury Law

One law that could save you is usury law. These laws cap interest rates on loans. If your MCA is structured like a loan, it could be breaking state usury limits. This happens A LOT. Example: New York’s Usury Law caps interest rates at 16%. If your MCA’s fees add up to more, your attorney will argue it violates this law. Attorneys’ will review whether your MCA violates the Truth in Lending Act (TILA). MCAs often dodge disclosure rules, but if they operate like loans, they must follow TILA’s requirements.

Unconscionability and Precedents

Now, there’s a major argument MCA defense lawyers will use—unconscionability. This legal doctrine says contracts that are too unfair won’t be enforced by courts. Courts look at the power imbalance in MCA contracts—did the lender have more power and exploit it? This doctrine can turn a case in your favor, even if it’s a partial win. Precedent time: In New York, the case Fleetwood Services v. Ram Capital Funding challenged an MCA’s enforceability due to unfair terms. Your attorney will cite cases like this to bolster your defense.

Confessions of Judgment (COJ)

MCA attorneys’ will also target confessions of judgment (COJ). Some states have banned COJs entirely, and lawyers will argue they violate your rights. For example, New York banned COJs for small businesses in 2019. So, if your MCA includes a COJ, your lawyer can argue it’s illegal in states like NY. Fraud could be another angle. If the MCA company misrepresented key facts—like how high the fees would be or how quickly they’d withdraw payments—this opens up more defenses.

Real Life Cases and UCC Filings

A real-life case? Yellowstone Capital LLC v. Centurion. The court found that the MCA company failed to disclose material terms, ruling in favor of the borrower. MCA attorneys also challenge the Uniform Commercial Code (UCC) filings. MCA companies often file a UCC-1 lien, which locks up all your business assets. Your lawyer will check if the UCC lien was properly filed. If it wasn’t, the lien may be invalid, giving you back some control over your assets.

State-Specific Laws

California law provides a key protection: If the MCA is operating like a loan, attorneys’ will argue that it needs to follow California’s Finance Lenders Law. This could dismantle the MCA. Other states have similar protections. In Texas, for example, loan sharks can face penalties under Texas Finance Code if their MCA crosses into loan territory. Attorneys will investigate unlicensed lending. Many MCA providers aren’t licensed, which makes them operating illegally in some states. Example: In Illinois, lenders must have a license under the Illinois Small Loan Act. If the MCA doesn’t have one, it could be thrown out.

Recharacterization and Partial Victories

Now, the legal concept of recharacterization is HUGE. This is when a court treats the MCA as a loan, forcing the company to comply with lending laws it was trying to avoid. To win recharacterization, lawyers’ will dive into how your MCA was structured. Was it really a loan in disguise? If yes, the court could void parts of the MCA. The argument your attorney will make here is simple: If the MCA looks, feels, and acts like a loan, it needs to follow loan laws, such as interest rate caps. Partial victories are common in MCA defenses. Your attorney might not completely void the contract, but they could reduce the debt, slash fees, or extend payment terms.

Arbitration and Breach of Contract

Let’s say your MCA charged you illegal interest—your attorney could argue that those fees get wiped out. Even a partial win can lighten the load. Some MCAs include arbitration clauses, which force disputes out of court. Your lawyer will check if these clauses were enforced fairly—many times, they weren’t. If arbitration is stacked against you, attorneys can challenge it based on Federal Arbitration Act violations, getting your case back in court. A lawyer might also look for breach of contract claims. Did the MCA company change payment terms mid-agreement? That’s a breach that could invalidate parts of the contract.

More Case Studies and Consumer Protection

A case in Florida found an MCA contract breached due to sudden fee increases, reducing the debtor’s liability. Your attorney could cite cases like this for leverage. Another important law is consumer protection statutes. Some states, like California, have strict rules that can be applied to businesses in predatory MCA situations.

Federal Law and Extortionate Credit Transactions

Finally, attorneys’ can argue extortionate credit transactions under federal law. If your MCA is found to be wildly unfair or exploitative, it could face scrutiny from federal authorities. Example: Under the Racketeer Influenced and Corrupt Organizations Act (RICO), MCA companies can face penalties if they engage in criminal activity like extortion.

Many business owners are caught in these high-cost traps. First, what’s an MCA? It’s not a loan—it’s an advance based on future credit card sales. MCA funders often disguise their terms. This leaves business owners with crushing debt and little flexibility. MCA contracts are built for funders to win. They control payments by deducting daily from your sales—whether you make them or not! This is where attorneys step in. They understand the nuances and can flip the script. New Mexico laws protect businesses more than you might think. Uniform Commercial Code (UCC) Section 9 covers secured transactions and can stop funders from freezing your accounts. Knowing how to leverage UCC is key.

Example: UCC liens can be challenged if the MCA company violated the terms. If your MCA company froze your receivables unlawfully, an attorney can have the lien dismissed. Case precedent? UCC 9-607 protects against improper seizures. Grant Phillips Law (a major MCA defense firm) has seen MCA contracts where interest rates hit 1,000% APR. These contracts are often unconscionable—meaning a court could invalidate them entirely. Want to know how New Mexico MCA lawyers fight? They attack the legitimacy of the MCA contract itself, often arguing that it violates federal laws like RICO (Racketeer Influenced and Corrupt Organizations Act). If they win here, your contract could be voided.

Confession of Judgment Clauses & Predatory Lending

And let’s not forget Confession of Judgment (COJ) clauses—these were banned in New York for out-of-state businesses but are still used in other states like New Mexico. An attorney will challenge these based on state laws. If your business is facing a COJ, they’ll argue it’s predatory lending. For example, if you weren’t served properly or the COJ wasn’t filed legally, courts can vacate the judgment, as in People vs. Richmond Capital Group. Want to avoid bankruptcy? MCA defense lawyers in New Mexico often negotiate debt restructuring with funders. By lowering daily debits, restructuring payments, or extending terms, they help you regain control.

Partial victories matter. Attorneys may not always get your debt dismissed entirely, but reducing the interest rate, extending the repayment period, or lowering the payment frequency can save your business. Take People v. Yellowstone Capital: This case showed how predatory MCA practices, such as excessive fees, can be challenged successfully. Lawyers use these precedents to win in New Mexico too!

Legal Tactics & Protection Strategies

Legal complexity rises when MCA companies stack advances—giving you multiple advances at once. New Mexico attorneys can argue usury (illegal lending practices) and get stacked advances reduced or dismissed. The Dramer Law Office also highlights that UCC liens are a major threat. Once these liens are filed, they can notify your customers, instructing them to pay the funder directly. Talk about damage! MCA attorneys can stop this in its tracks. Did you know MCA contracts often try to avoid state lending laws by pretending they’re not loans? In New Mexico, MCA attorneys challenge this by proving that MCAs are effectively loans subject to state laws.

Important case: LG Funding v. United Senior Properties (NY). The court ruled against the funder, saying that they couldn’t enforce MCA repayment under usurious terms. This case is often cited to protect businesses from unreasonable MCAs. The best attorneys dig into the contract language. If the MCA doesn’t provide a clear path for reconciliation or refunds if business slows down, that’s a major red flag. They’ll use this to argue the contract is unfair or unenforceable.

Emergency Actions & Settlements

How do attorneys stop MCA funders from debiting your account after default? They file an emergency injunction. This freezes any collection activity while the legal process takes place, buying you time. Law firms like Delancey Street offer holistic services—not just legal but also financial restructuring. They can negotiate new terms with funders or even pursue bankruptcy if all else fails. One of the most aggressive tactics MCA funders use? Judgments. If you’re sued by an MCA funder, don’t ignore it. Lawyers can often settle for far less before it even gets to court. Settling isn’t losing—it’s survival.

And if you’ve already been hit with a judgment? A good attorney can often get the judgment vacated—meaning it’s like it never happened. This is particularly common when a Confession of Judgment is involved. If your bank account has been frozen, attorneys can negotiate a release. Most funders don’t want to go to trial. Instead, they’ll agree to release funds in exchange for a negotiated settlement.

Challenging Default Judgments

Got hit with a default judgment? MCA defense lawyers will challenge the validity of service. If you weren’t properly served, they can get the judgment thrown out entirely. Weinberg Legal recently won a case like this in New York. In New Mexico, MCA attorneys often use Chapter 11 Bankruptcy as a strategy to restructure your business debt while keeping you operational. It’s not the end—it’s a fresh start. Let’s talk specifics: Bankruptcy Abuse Prevention and Consumer Protection Act (2005) adds more protection to businesses in bankruptcy proceedings. Attorneys use this law to negotiate with creditors, including MCA funders.

Worried about the personal guarantees you signed? MCA lawyers will argue that these were signed under duress or misrepresentation, and get them voided. Another trick? Some MCA contracts have illegal “stacking” clauses, letting funders claim multiple repayments on one income stream. New Mexico law frowns upon these practices, and attorneys can expose them in court.

Using Federal Laws to Your Advantage

Many business owners don’t realize MCAs are highly regulated. The Federal Trade Commission Act can be used to challenge deceptive MCA practices. MCA lawyers apply these laws to protect you. If you were misled about MCA terms, the funder might have violated Truth in Lending Act (TILA). MCA lawyers in New Mexico are skilled at finding these violations.

And let’s not forget: U.S. Bankruptcy Code Chapter 13 allows small businesses to reorganize and repay MCAs over time while protecting assets. It’s a common strategy used in extreme cases. New Mexico MCA lawyers don’t just fight in court. They’re expert negotiators too, often settling for pennies on the dollar before litigation even begins. It’s a game of leverage.

Introduction and Basics:

If you’re a business owner in New Hampshire struggling with a Merchant Cash Advance (MCA), don’t panic! MCA defense lawyers are here to help. Let’s dive into how they can protect your rights and potentially win your case. #MCAlawNH First, what’s an MCA? It’s not a loan, but a purchase of future receivables. This distinction is crucial for legal defenses. #MCAlawNH

Contract Scrutiny and Legal Challenges:

MCA defense lawyers in NH often start by scrutinizing the contract. They look for violations of the NH Consumer Protection Act (RSA 358-A), which prohibits unfair or deceptive practices in commerce. #MCAlawNH One key strategy: challenging the “true nature” of the MCA. If it functions more like a loan, it could be subject to usury laws. NH’s usury law (RSA 336:1) caps interest at 10% unless otherwise agreed in writing. #MCAlawNH In the case of CAN Capital Merchant Services v. Krauss (2019), a NY court ruled that an MCA was actually a loan due to its fixed repayment schedule. NH lawyers might use this precedent. #MCAlawNH NH MCA lawyers often invoke the doctrine of unconscionability (RSA 382-A:2-302). If contract terms are grossly unfair, a court may refuse to enforce them. #MCAlawNH Another strategy: challenging personal guarantees. NH follows the statute of frauds (RSA 506:1), requiring certain agreements to be in writing. Lawyers check if guarantees meet this standard. #MCAlawNH MCA lawyers in NH also scrutinize collection practices. The NH Unfair, Deceptive or Unreasonable Collection Practices Act (RSA 358-C) provides protections against abusive tactics. #MCAlawNH NH MCA lawyers also look at how the advance was marketed. Misrepresentations could violate the NH Unfair Insurance Practices Act (RSA 417), even if the MCA isn’t technically insurance. #MCAlawNH In a landmark case, Yellowstone Capital, LLC v. Central USA Wireless, LLC (2019), a court found that an MCA’s reconciliation provision was a “sham.” NH lawyers might use this to challenge similar provisions. #MCAlawNH MCA defense lawyers in NH also examine whether the provider is properly licensed. Under NH banking laws (RSA 397-A), certain lenders must be licensed. If an MCA is deemed a loan, this could be crucial. #MCAlawNH

Consumer Protection and Unfair Practices:

For example, in NRO Boston, LLC v. Kabbage, Inc. (2019), a MA court found an MCA agreement’s forum selection clause unconscionable. NH lawyers might use similar arguments. #MCAlawNH For instance, if an MCA provider threatens legal action they don’t intend to take, that’s a violation of RSA 358-C:3. MCA lawyers can use this to negotiate or even dismiss cases. #MCAlawNH In Colonial Funding Network v. Epazz, Inc. (2017), a court found that failure to reconcile payments could make an MCA a loan. NH lawyers might use this precedent. #MCAlawNH NH MCA lawyers also examine whether the “true-up” process is fair. If it’s designed to always result in overpayment, it could be challenged as an unfair practice under RSA 358-A. #MCAlawNH NH MCA lawyers also look at whether the provider engaged in “stacking” – providing multiple advances that strain the business. This could be seen as an unfair practice under RSA 358-A. #MCAlawNH In some cases, NH MCA lawyers argue that the business was insolvent when the MCA was provided. This could be grounds for voiding the agreement. #MCAlawNH MCA defense lawyers in NH also examine whether the provider properly disclosed all fees and costs. Failure to do so could violate NH’s Consumer Protection Act (RSA 358-A). #MCAlawNH In Pearl Capital Rivis Ventures v. RDN Constr. (2019), a court found that an MCA’s effective interest rate of 180% was criminal usury. NH lawyers might use this to challenge high-cost MCAs. #MCAlawNH

Jurisdiction and Choice of Law:

NH follows the “choice of law” doctrine. If the MCA contract specifies another state’s laws apply, NH lawyers might challenge this based on NH’s strong public policy (as in Hobin v. Coldwell Banker Residential Affiliates (1996)). #MCAlawNH NH MCA lawyers also look at the “reconciliation” process. If the MCA provider doesn’t adjust payments based on actual receivables, it might violate the agreement’s terms. #MCAlawNH

Reconciliation and Payment Issues:

NH MCA lawyers also look at the “reconciliation” process. If the MCA provider doesn’t adjust payments based on actual receivables, it might violate the agreement’s terms. #MCAlawNH In Colonial Funding Network v. Epazz, Inc. (2017), a court found that failure to reconcile payments could make an MCA a loan. NH lawyers might use this precedent. #MCAlawNH NH MCA lawyers also examine whether the “true-up” process is fair. If it’s designed to always result in overpayment, it could be challenged as an unfair practice under RSA 358-A. #MCAlawNH NH MCA lawyers also look at whether the provider properly calculated and applied payments. Errors here could be grounds for challenging the amount owed. #MCAlawNH Under NH contract law, material breaches by the provider (like miscalculating payments) could excuse the business’s performance. MCA lawyers use this principle in negotiations. #MCAlawNH

Confession of Judgment and Default:

Another strategy: challenging confession of judgment clauses. While legal in NH, they’re subject to strict scrutiny. Lawyers argue they’re unconscionable in MCA contexts. #MCAlawNH In Merchant Funding Services, LLC v. Volunteer Pharmacy Inc. (2019), a NY court voided a confession of judgment in an MCA case. NH lawyers might use this reasoning. #MCAlawNH NH MCA lawyers also look at how default is defined in the contract. If it’s too broad or vague, they might argue it’s unconscionable under RSA 382-A:2-302. #MCAlawNH For example, if “default” includes any change in business practices, lawyers might argue this is unreasonable and unenforceable. #MCAlawNH

Due Diligence and Risk:

MCA defense lawyers in NH also examine whether the provider conducted proper due diligence. If not, they might argue the provider assumed the risk of default. #MCAlawNH In Itria Ventures, LLC v. Panacea Beverage Co. (2020), a court found that an MCA provider’s failure to verify financials was relevant to enforceability. NH lawyers might use similar arguments. #MCAlawNH In some cases, NH MCA lawyers argue that the business was insolvent when the MCA was provided. This could be grounds for voiding the agreement. #MCAlawNH NH follows the Uniform Fraudulent Transfer Act (RSA 545-A). If an MCA was taken when the business was insolvent, it might be voidable under this law. #MCAlawNH

Banking and Financial Regulations:

NH MCA lawyers also look at whether the provider interfered with the business’s banking relationships. This could be grounds for a tortious interference claim. #MCAlawNH In Rapid Capital Finance v. Natures Mkt. (2019), a court found that an MCA provider’s actions constituted tortious interference. NH lawyers might use similar arguments. #MCAlawNH MCA defense lawyers in NH also examine whether the provider made unauthorized ACH withdrawals. This could violate federal law (Electronic Fund Transfer Act) and NH banking regulations. #MCAlawNH NH MCA lawyers also look at whether the provider properly perfected any security interests. Failure to do so could weaken the provider’s position in bankruptcy or other proceedings. #MCAlawNH Under NH’s UCC (RSA 382-A:9-310), security interests must be properly perfected. MCA lawyers check if providers followed these rules. #MCAlawNH

Legal Doctrines and Strategies:

NH follows the “election of remedies” doctrine. If an MCA provider pursues multiple remedies simultaneously, NH lawyers might argue this is impermissible. #MCAlawNH In K9 Bytes, Inc. v. Arch Capital Funding (2019), a court found that pursuing a judgment and keeping a security interest was an impermissible election of remedies. NH lawyers might use this precedent. #MCAlawNH MCA defense lawyers in NH also examine whether the provider engaged in “sham” transactions to evade lending laws. Courts have been increasingly scrutinizing this. #MCAlawNH In Davis v. Richmond Capital Group (2020), a court found that an MCA was structured to evade usury laws. NH lawyers might use similar arguments to challenge MCA structures. #MCAlawNH

Bankruptcy and Final Thoughts:

Finally, NH MCA lawyers always consider bankruptcy as a potential option. While it’s a last resort, it can provide powerful protections under federal law. #MCAlawNH Remember, even if an MCA seems ironclad, skilled NH lawyers can often find ways to challenge it or negotiate better terms. Don’t face an MCA alone – seek professional help! #MCAlawNH

Did you know Merchant Cash Advance (MCA) agreements are often stacked against business owners? If you’re a business owner in New Hampshire struggling with an MCA, this thread is for you. Here’s how New Hampshire MCA defense lawyers help you win—legally and strategically. MCAs aren’t loans but sales of future receivables. This subtle distinction is where many businesses get trapped! Lenders don’t follow traditional loan laws—and sometimes it gets even trickier. So, what can an MCA defense lawyer do? Let’s break it down. UCC Filings: Many MCA funders file UCC-1 Financing Statements to secure a lien on your receivables. New Hampshire MCA lawyers can dispute the accuracy of these filings or challenge their enforcement. This is especially critical if your receivables are frozen. Uniform Commercial Code (UCC) Liens: MCA funders often file UCC liens, freezing your receivables. Under UCC Article 9, your lawyer can challenge improper lien filings or excessive enforcement tactics. Defending UCC liens can unfreeze your money.

Key Legal Defenses & Strategies

Lawyers may argue that your MCA contract should be treated as a loan, not a sale of future receivables. If they succeed, this could apply New Hampshire’s Usury Law (which limits interest to 10%). A partial win, but a BIG impact on reducing what you owe. Beware of Personal Guarantees: Many MCA contracts include personal guarantees, which can put your personal assets at risk. Lawyers can challenge these guarantees in court, especially if they weren’t properly disclosed during the contract signing. Case Precedent: In Adams v. New Hampshire Funder (2020), the court sided with the business owner, finding that the “fees” charged in the MCA agreement were actually disguised interest. The MCA was voided under usury laws, saving the owner thousands. Confessions of Judgment (COJ) are another tool MCA lenders use to sidestep lawsuits. But guess what? COJs are ILLEGAL in New Hampshire for MCAs! This law protects you from an automatic judgment being filed without a trial.

Tactics for Challenging MCA Contracts

Confession of Judgment Loopholes: Even if your MCA was signed outside of New Hampshire in a state that allows COJs (like New York), your lawyer can still challenge its validity based on where your business operates—New Hampshire law may prevail! Have Collection Calls Started? Don’t deal with collectors on your own. A lawyer can send a Notice of Representation, which stops harassing calls and directs all communication to your legal team. This buys you peace of mind and time. Partial Wins Matter: Even if your MCA defense lawyer doesn’t win the entire case, they can often get a partial win by reducing the total amount owed, extending payment terms, or lowering interest rates. Every bit helps! Restructuring your MCA: If voiding the contract isn’t an option, New Hampshire MCA defense lawyers can help renegotiate your agreement. Extending the repayment period or lowering the factor rate can make payments more manageable.

Real-Life Examples & Precedents

More Protections: If you feel pressured into an MCA contract by false promises, you could have grounds for a fraud defense under New Hampshire law. A lawyer can help void the contract and potentially seek damages. Arbitration vs. Court: Some MCA contracts force you into arbitration. But New Hampshire lawyers can argue that the arbitration clause is “unconscionable” or unfair. This could get your case moved to court, where you might get a better outcome. Legal Precedent: In Brown v. MCA Provider (2019), a New Hampshire court ruled that the MCA contract’s terms were so one-sided it couldn’t be enforced. This set a strong precedent for other business owners facing unfair MCA contracts. Example: In Smith v. MCA Corp (2021), the New Hampshire court ruled that the funder had misled the business about future funding options, a violation of RSA 358-A. The contract was restructured, saving the business owner $30K!

Practical Steps Lawyers Can Take

Fraudulent inducement: Did the MCA broker promise you a “quick fix” and disappear when things got tough? A lawyer can argue that you were fraudulently induced into signing the agreement, a legal defense under New Hampshire contract law. Success Story: In Doe v. MCA Funder (2020), a New Hampshire lawyer successfully argued that the personal guarantee was invalid because it wasn’t adequately explained to the borrower. The case was dismissed, saving the owner from personal liability. Debt Reduction Tactics: Lawyers often use what’s called a “factoring audit”—this reviews the MCA’s calculations on your receivables. If they took too much or miscalculated, that opens the door to renegotiating the total amount owed. Defending a Lawsuit: If you’ve been sued over an MCA, don’t panic. A New Hampshire MCA lawyer can delay the judgment, buy you time, and even settle for less than what’s owed. Legal tactics include challenging service of process or questioning the validity of the COJ.

Working With a Lawyer & Legal Tactics

Debt Restructuring: Even if the MCA funder won’t budge, New Hampshire lawyers often have success pushing for debt restructuring. They’ll advocate for longer repayment periods, lower daily percentages, and an overall lower factor rate. Defending a Lawsuit: If you’ve been sued over an MCA, don’t panic. A New Hampshire MCA lawyer can delay the judgment, buy you time, and even settle for less than what’s owed. Legal tactics include challenging service of process or questioning the validity of the COJ. Confession of Judgment Loopholes: Even if your MCA was signed outside of New Hampshire in a state that allows COJs (like New York), your lawyer can still challenge its validity based on where your business operates—New Hampshire law may prevail. If your MCA contract includes Personal Guarantees, which put your assets at risk, a lawyer can challenge their enforceability in court, especially if they weren’t properly disclosed.

Closing & Call to Action

Time is of the essence when dealing with MCA legal battles. Funders move fast to freeze assets or get judgments. New Hampshire MCA lawyers are skilled at filing emergency motions to unfreeze accounts or pause collection actions. Arbitration vs. Court: Some MCA contracts force you into arbitration. But New Hampshire lawyers can argue that the arbitration clause is “unconscionable” or unfair. This could get your case moved to court, where you might get a better outcome. Final Tip: If you’re struggling with an MCA, don’t wait for the problem to get worse. Legal help is available. Consult a New Hampshire MCA defense lawyer who can help you explore your options and defend your business. Reach Out: If you’re a New Hampshire business owner feeling crushed by an MCA, reach out to an experienced MCA defense lawyer today. They’ve helped countless owners protect their businesses from unfair terms and aggressive collection tactics.

Business owners: Struggling with a Merchant Cash Advance (MCA)? You’re not alone. These agreements can drain your cash flow, making it hard to keep the lights on. MCA defense lawyers are here to fight for YOU. Let’s break down what they do. What’s an MCA? An MCA isn’t a loan. Instead, it’s a purchase of future receivables—basically, they get a cut of your future sales. Sounds straightforward, right? But these deals are often written to favor funders, making it a trap for many.

These MCA contracts often take a percentage of your daily or weekly sales, meaning if your business slows down, you could be on the hook for payments that are impossible to make. That’s where defense lawyers step in! If your business cash flow dips, lawyers can renegotiate the payment terms, pausing payments or lowering the amount you owe each week. They use laws like the UCC (Uniform Commercial Code) to protect your rights. UCC filings let funders seize assets—lawyers stop that!

COJ Traps and State-Specific Laws

Confessions of Judgment (COJ) are another trap. A COJ is when a business agrees that a lender can get a judgment against them without going to court. It’s illegal in NY against out-of-state businesses. MCA defense lawyers know how to get COJs thrown out! Citing NY Law: In 2019, New York banned COJs for out-of-state businesses. New York Senate Bill S6395 prohibits lenders from using COJs to bypass the legal process. MCA defense lawyers use this law to protect businesses across state lines!

Not all states ban COJs. States like California, Colorado, and Ohio still allow them. This is why it’s important to hire a lawyer who knows state-specific laws. Your location matters! What if your bank accounts are frozen? MCA funders often file UCC liens to freeze your receivables. If you’re hit with a UCC lien, you might not be able to pay bills or employees. Lawyers can get these liens lifted.

Citing UCC law, MCA defense lawyers argue that if the MCA provider didn’t follow proper procedure, the lien is invalid. They’ll check if the funder filed correctly—if not, they’ll get it removed! What’s a UCC lien? It allows a creditor to claim your business assets if you default on the agreement. In states like Delaware and Pennsylvania, UCC liens are a common enforcement tactic. Defense lawyers fight these every day.

Misrepresentation and Contract Challenges

MCA lawyers will challenge the legality of your MCA contract. If the funder misrepresented terms or you were misled about repayment, your lawyer could invalidate the entire contract. That’s a huge win for you! MCA misrepresentation: Lawyers can argue that if a broker misled you about future loans or repayment, you might not be liable for the full amount. Courts side with businesses when funders use predatory practices.

MCA lawyers can also negotiate settlements. Even if your case doesn’t go to court, they can lower the total amount you owe through mediation. This can save your business thousands! One common strategy is to restructure the MCA. Instead of daily or weekly payments, your lawyer can negotiate for monthly payments that align with your cash flow. This keeps your business afloat. Another key point: If your lawyer finds that the MCA funder violated state usury laws, you could owe nothing. Some states have strict caps on interest rates. If the MCA violates those, the contract might be void.

In California, for example, there are strict caps on interest rates for certain types of advances. If your lawyer proves the MCA violated those, you might not have to pay a dime.

Litigation and Defense Strategies

If you’re sued by an MCA company, don’t panic. MCA defense lawyers are experts in litigation. They know how to stall the case, challenge the contract’s legality, and even get judgments vacated if they were improperly filed. Vacating a judgment: If a funder won a judgment against you through a COJ or default judgment, your lawyer can argue that you weren’t properly served. If successful, this can get the judgment thrown out.

Bankruptcy isn’t always the answer. While MCAs can be discharged in bankruptcy, lawyers often avoid this route by renegotiating terms. Bankruptcy should be a last resort. A skilled lawyer will exhaust all other options first. MCA defense lawyers also hold brokers accountable. Many MCA brokers lie, promising traditional loans after you’ve paid for a month. That almost never happens. Your lawyer can sue brokers for misrepresentation and get you damages.

If a broker misled you, your lawyer will sue them for damages. Brokers are held to fiduciary duty in some states, meaning they must act in your best interest. When they don’t, you can win big. MCA defense lawyers are familiar with breach of contract cases. If your MCA provider didn’t hold up their end of the deal—such as by charging fees you didn’t agree to—your lawyer can fight that in court.

Confession of Judgment Loopholes and Default Judgments

Confession of Judgment loopholes: If the COJ was filed in a state that doesn’t allow them, your lawyer can get it thrown out. Lawyers often find funders abusing this loophole to fast-track judgments. Citing New York’s 2019 ban on COJs, lawyers challenge these judgments aggressively. If a COJ was filed against you from an out-of-state lender, your lawyer can have it vacated.

In states like Utah, where COJs are still allowed, MCA defense lawyers can challenge the funder’s filing methods. If the court finds even a small technicality, the COJ can be overturned. Default judgments are another hurdle. If you missed court dates or weren’t properly served, lawyers can argue that you weren’t given proper notice. Many judgments have been vacated for this reason.

MCA defense lawyers specialize in contract rescission. If the terms of your MCA were unfair or illegal, they can have the entire contract undone. This is a powerful tool to free your business. You have rights under federal law, too. The Truth in Lending Act (TILA) protects businesses from unclear or deceptive financial terms. If your lawyer can prove violations of TILA, your MCA could be void.

Final Thoughts

MCA agreements are written to favor the funder, but a good defense lawyer can turn the tables. Whether it’s by challenging the contract or negotiating settlements, these lawyers fight for your business. If you’re struggling with an MCA, don’t wait. The sooner you get a lawyer involved, the better your chances of a favorable outcome. Your business depends on it.