Seattle MCA Defense Lawyers
Merchant Cash Advances (MCAs) are absolutely, without a doubt, not in any way your friend, ally, or partner when it comes to your financial well-being, no matter how they are marketed or advertised. Business owners, particularly those based in New Orleans, Louisiana—where so many small and medium-sized businesses are struggling to make ends meet—are getting trapped, caught, and entangled by these predatory, misleading, and dangerous deals every single day, week, and month, without realizing the consequences. And the worst part, the most devastating and heartbreaking aspect of this entire situation, is that many of these business owners don’t even realize or understand that they can absolutely fight back against these aggressive MCA lenders… but the truth is, they absolutely and most certainly CAN, especially with a knowledgeable attorney by their side who specializes in these matters. MCAs might seem like an attractive, easy, and quick way to get cash for your business needs—but in reality, they come with sky-high interest rates, outrageous fees, and brutal repayment terms that can, in fact, crush, suffocate, and destroy a small business’s ability to function and stay afloat. However, an experienced MCA attorney, one who understands the intricacies and complexities of these contracts, can help you navigate through that mess, find solutions, and possibly save your business from complete ruin. I’ve personally done it before in multiple cases, over the course of many years, and I’ve seen the relief, gratitude, and pure joy on the faces of business owners when they realize there’s hope.
Full Dismissal vs Partial Wins
Winning a full dismissal of an MCA, meaning that the entire debt is wiped out and the contract is rendered void, is without a doubt the ultimate goal, the dream scenario, the best-case outcome in these cases. But even when that’s not completely possible—due to specific legal factors, certain state laws, or contract limitations—an MCA attorney can still win big, and I mean really big, by getting your debt significantly slashed down, reduced, or cut, or stopping the aggressive, threatening, and harassing collections practices that keep your business in constant fear of shutting down and going under. What if I told you that even partial victories, which might not seem like much at first glance, can literally save your business from total collapse? If we can reduce the interest rates, extend the repayment terms, or push back against the unlawful, unfair, and predatory clauses written into the contract—your cash flow could go from negative, bleeding money, to positive, thriving and allowing you to keep your doors open.
Here’s why partial wins matter, particularly in MCA cases:
- Even cutting down your MCA by just 20-30%, which might not sound like a lot to some people, can truly mean the difference between paying your employees, your rent, and your suppliers—or having to shut your doors for good.
- New Orleans courts, especially in recent years, have shown that they are willing to side with businesses when MCA lenders cross the line into greed and unfair practices.
Louisiana Laws
Let’s talk Louisiana laws, which are crucial in MCA cases. In our great state of Louisiana, we have strict usury laws that cap the interest rates lenders can charge to prevent excessive, predatory lending. But guess what? MCA lenders, who are always looking for a way to maximize their profits at the expense of small businesses, try to bypass, skirt around, and evade that by claiming they’re not actually making loans, but instead purchasing future receivables. That’s where a GOOD MCA attorney, who knows how to see through these tricks, steps in and proves them wrong, using the full weight of the law. Louisiana Civil Code Art. 2924, which limits the interest rate to 12%, is our shield and our weapon. MCA lenders—yeah, they try to charge WAY more than that, but they argue it’s not really “interest” they’re charging, but something else, because it’s a purchase of future receivables, not a loan. It’s a sneaky loophole, a legal trick, but we see right through it and will fight it tooth and nail in court.
Precedents That Matter
Here’s a real case that set a critical precedent for MCA defense: Darden vs. Sterling (2019). In this case, the court decided, after much deliberation and examination of the facts, that the MCA lender was actually charging an interest rate that exceeded 60%, which is wildly above the legal limit. The judge, in an important ruling that has helped many businesses since, threw out a big part of the debt, setting a strong precedent that we can and do use in other cases. This precedent is GOLD for us in New Orleans when we’re defending MCA cases, as it shows that courts are willing to look at these agreements for what they really are: predatory loans. Your attorney will use this precedent as a key part of the defense to argue that your MCA isn’t just unfair or exploitative—it’s flat-out illegal. MCA companies, who rely on exploiting the “sale of receivables” loophole, can be shown to violate Louisiana law and federal lending rules, which gives us a strong foundation for a successful defense.
Legal Defense Strategies
The true sale doctrine, a critical legal concept in MCA cases, is something we rely on heavily in our arguments. Let me break this down in as much detail as possible. MCA lenders often say, “Hey, we’re not giving you a loan; we’re just buying your future sales.” But the truth is, if you, as a business owner, are on the hook for repayment no matter what your sales look like—whether you make money or not—it’s not really a sale. It’s a loan in disguise, and that means it’s subject to usury laws. Your MCA attorney will hammer this point relentlessly in court, using case law, precedents, and expert testimony to make it clear. How do we prove it’s a loan? We look at things like fixed payment schedules, which are a big red flag. If you’re making the same payment every single day, regardless of whether your business made $1,000 or $100 that day, that’s a loan in disguise, folks. And when it’s a loan, it falls under the jurisdiction of usury laws, which cap interest rates and protect you from being exploited.
Usury law violations are a killer defense, and here’s why: If your MCA lender’s effective interest rate, once we break down all the fees, costs, and charges, is above the legal limit in Louisiana, the entire agreement can be challenged, restructured, or even thrown out. Art. 2924, as I mentioned earlier, makes sure lenders can’t charge outrageous, usurious rates and get away with it. The precedent of Coastal Inc. vs. Advance Funding Group (2020), another key case, also showed that MCA agreements charging more than the legal limit were considered loans, subject to those same interest caps, and were therefore illegal. MCA attorneys will bring up this case every time we go to court because it strengthens our argument. MCA attorneys in New Orleans know how to frame these contracts in a way that shows the courts just how unfair they are. We argue that ambiguous contract terms—those that are unclear or buried in fine print—are unfair to the business owner, and the courts agree. Ambiguity in contracts? It usually works in our favor when we’re in front of a judge.