Utah MCA Defense Lawyers

When you’re facing down an MCA lender, you’ve probably felt an immense amount of pressure—Utah business owners, who often find themselves in desperate situations due to unforeseen circumstances, get trapped in these predatory loans fast, and they quickly realize the consequences can be financially devastating and emotionally overwhelming. Here’s the thing: these MCA lenders operate outside traditional loan laws, often dodging usury limits and other state protections, which were put in place to protect businesses from being destroyed by high-interest, predatory lending practices. A key tool, which should always be considered as part of your defense strategy? Utah Code Ann. § 15-1-1, which is the state’s law concerning interest rate limits, and although MCA lenders claim they are not offering “loans” per se, defense attorneys who are knowledgeable and experienced in Utah law know how to use this statute effectively against these lenders by demonstrating that the excessive interest they charge is often disguised as “fees” and other misleading terms.

MCA lenders often argue that they are completely exempt from Utah’s usury laws, which are designed to limit the amount of interest that can be charged on traditional loans, by claiming that their financial products are “purchase of receivables” agreements instead of loans, but this distinction can be attacked in court with a good legal strategy. But skilled and dedicated lawyers, who are passionate about fighting for small business owners, know how to break that down—by showing in court, with well-prepared arguments and evidence, that what these MCA lenders are really doing is providing loans under a different name to avoid regulation. Case law matters: MCA lenders rely on courts upholding their contracts as “not loans.” However, the case of TBF Financial, LLC v. ECS Refining set a powerful precedent in showing that these contracts can still be subject to state lending laws, even when lenders attempt to disguise their terms. Utah lawyers, who are experienced in such cases, know how to leverage this case law to strengthen their arguments against MCA lenders, making it a critical part of their defense.

Defending against MCAs? Look at Contractual Overreach, which is an important legal concept that focuses on the unfair advantage MCA lenders often take over desperate business owners. An MCA defense lawyer in Utah, who truly understands the predatory nature of these contracts, will be able to point out unfair terms that are deeply hidden within the contract, terms that most business owners would not recognize as dangerous when they initially sign the agreement. Lenders’ contracts, which are often crafted to favor the lender and trap the borrower, can be voided or revised by proving unconscionability, meaning that the contract is so unfair that no reasonable person would have agreed to it, especially given the unequal bargaining power between MCA lenders and the business owners they target.

Attorneys, who are dedicated to protecting Utah business owners, often bring up Article 9 of the UCC, which governs secured transactions, to protect their clients. MCA lenders, who are notorious for using strong-arm tactics, like to secure their loans with personal guarantees and liens on the business’s assets. But if these lenders don’t file their UCC liens properly or follow proper legal procedure, you’ve got a legal way out that can prevent them from seizing your assets without due process. Utah courts also offer tools like equitable remedies, which allow the court to step in and restructure the repayment plan if the court sees that the MCA lender has been overly aggressive, predatory, or misleading in their practices. These remedies are particularly useful in helping business owners who are at risk of losing their livelihoods due to the harsh and often misleading terms of MCA agreements.

MCAs frequently violate Truth in Lending Act (TILA) guidelines, which is a federal law meant to ensure clear disclosure of the terms and costs of loans. Yes, TILA is federal, but Utah defense attorneys know how to argue for TILA’s application in cases where MCA lenders, who try to operate outside traditional lending regulations, attempt to dodge disclosure rules that would otherwise protect the business owner. This argument can be particularly effective in showing the court that the MCA lender intentionally misled the borrower.

MCA lenders hide behind confession of judgment clauses—but in Utah, these clauses are NOT enforceable, which is a major advantage for business owners. The law here, like in many states, sees this as a violation of due process rights, because it allows the lender to obtain a judgment without giving the borrower a fair chance to defend themselves in court. You can win by challenging those clauses, and an experienced attorney will make sure the court sees how unfair these clauses are, which often leads to favorable outcomes for the borrower. My experience? I’ve seen many business owners assume that MCAs are their last hope—until we break down those contracts and show how unfair and predatory they really are. Utah courts are more than willing to side with business owners if the terms are truly predatory and unconscionable.

One powerful tool that every good MCA defense lawyer should have in their toolbox is fraudulent inducement—Utah law, which protects against unfair and deceptive business practices, recognizes that if an MCA lender misrepresents their product, you can get out of the contract entirely. This isn’t a one-off trick that only works in rare cases; it’s rooted in basic contract law and applies to any agreement where one party has been misled into signing. Fraudulent inducement is a legal strategy that allows business owners to invalidate contracts when they were induced into signing by false promises or misleading terms.

MCA lenders often use the term “factor rate” to confuse borrowers. They know that most business owners don’t understand how this financial jargon works. But don’t fall for it. In Utah, statutory interest limits still apply when the fees equate to interest, no matter what fancy terms the MCA lender uses to hide their predatory rates. Attorneys, who are experienced in MCA cases, can argue in court that these so-called “factor rates” are actually an interest rate in disguise, and therefore subject to Utah’s interest rate caps.

Utah MCA defense lawyers can also challenge jurisdiction, which is where the case is heard. Many MCA contracts specify out-of-state courts (usually New York) for disputes, but your attorney, who is fighting for your business’s survival, can fight to keep the case in Utah, where the law is more favorable to small business owners. Using Utah Code Ann. § 78B-5-825, a lawyer can argue that the MCA lender acted in bad faith, potentially awarding attorney’s fees to the defendant. This law, which is designed to punish bad actors in legal disputes, is crucial in making MCA lenders pay when they’ve pushed too far, which often happens when they pursue collections in a way that violates the borrower’s rights.

There’s no right to cure under Utah law for MCAs when default happens. That means if an MCA lender comes after you aggressively, without giving you a fair chance to resolve the issue, attorneys can challenge them to show leniency—pushing for settlements that won’t destroy your business entirely. One angle I’ve seen work, time and again, is Unconscionability—showing that MCA contracts are so one-sided and take such extreme advantage of small businesses in distress that no court would reasonably uphold them. Utah courts are especially sympathetic to this argument, particularly when the contract terms are so extreme that it shocks the conscience.

Remember, MCAs love to throw personal guarantees at you. But in Utah, personal guarantees can be challenged if the terms were unclear or misleading at signing, which is often the case with these complicated contracts. Your lawyer will know how to contest this in court, arguing that the personal guarantee was obtained under false pretenses or through deceptive practices. An often-overlooked aspect is how MCA lenders violate the FTC Act by engaging in deceptive practices, which is a violation of federal law. Federal law, combined with Utah-specific defenses, can take these lenders down a peg, giving business owners a much-needed reprieve from aggressive collection tactics.

I’ve seen Utah businesses crippled by MCAs that add aggressive fees after you default. Luckily, Utah’s contract law allows attorneys to argue that these fees are punitive, not compensatory—and can get them voided by proving that the fees were meant to punish the borrower rather than compensate the lender for actual losses. Injunctions are another strategy that can be employed. Your Utah MCA defense lawyer, who is dedicated to protecting your assets, might file for an injunction to stop MCA lenders from seizing assets while the case is ongoing. This buys you precious time to prepare a defense or negotiate a better settlement.

One thing I always say to my clients: Don’t sign ANYTHING without reading it carefully. Many Utah MCA lenders use vague, confusing language that traps business owners into agreeing to terms they don’t fully understand. Let an attorney handle the negotiations—trust me, it’s a game-changer. In re Direct Lending Investments LLC, courts ruled that the MCAs weren’t acting like receivable purchasers—they were acting like lenders. That’s a win for us because it shows that courts are starting to recognize the true nature of MCA agreements, and are willing to hold lenders accountable for trying to evade lending laws.

Use Utah’s Unlawful Detainer laws if MCA lenders try to physically take your property. This law, which governs the process of reclaiming property, ensures a formal process before anything gets taken, so you can fight back with the full force of the law behind you. Receiverships are often filed by MCA lenders when they think you’re about to default. A good Utah MCA defense attorney, who understands the nuances of these agreements, can challenge this aggressively in court, questioning the need for a receiver and preventing the lender from taking control of your business’s assets prematurely.

MCA lenders often act like they’re doing you a favor, offering you a lifeline when no one else will, but in reality, they’re preying on your vulnerabilities and using your desperation to trap you in unfair terms. I’ve saved many Utah businesses by showing the courts how lenders exploit desperation to gain unfair terms that no reasonable business owner would have agreed to if they had fully understood the contract. If you’re in default on an MCA, an attorney can negotiate down the principal balance owed, often using Utah’s bankruptcy exemptions as leverage to reduce the debt and protect your business. The key is showing that the MCA’s terms were never fair to begin with.

Utah’s bankruptcy laws are also helpful in getting rid of MCA debt altogether. If you file Chapter 11, MCA debt may be restructured or discharged entirely, which can give your business the fresh start it needs to survive. Attorneys, who specialize in both bankruptcy and MCA defense, can protect your assets while reorganizing your debt, ensuring that your business has a chance to recover without being crushed by unfair debt. Utah courts are sympathetic to small businesses under pressure. If your lawyer can prove that the MCA lender failed to disclose key terms, courts may rescind the contract under fraudulent misrepresentation doctrines.

The Fair Debt Collection Practices Act (FDCPA) doesn’t always apply to MCAs, because they are technically not considered “debt” in the traditional sense, but Utah attorneys who are experienced in MCA defense know how to stretch this law to protect you from overly aggressive collection tactics that violate your rights. Utah MCA defense attorneys know how to keep your business afloat, even if the MCA lender tries to sink you by using aggressive, unethical practices. We use every tool available, from Utah’s contract law to federal statutes, to defend your rights and ensure that your business survives.