Struggling with debt?

ARE MERCHANT CASH ADVANCES ILLEGAL?

Delancey Street OFFERS A MONEY BACK GUARANTEE for our debt relief services, because we believe in delivering results you can trust.

Are you worried your merchant cash advance might be illegal?
We get it. MCAs can feel like the wild west of business financing. They aren’t technically “loans,” which means they might sidestep certain banking regulations—and that’s where confusion often begins.

Anyway—let’s dive in.

Understanding Merchant Cash Advances
A Merchant Cash Advance (MCA) is an advance on your future business receivables. Typically, you receive a lump sum upfront, and the MCA lender collects a percentage of your sales each day (or week). Because it’s called an “advance,” many of the usual lending laws (like certain usury protections) might not apply. But in some cases, MCAs can cross the line and end up being considered disguised, high-interest loans.

Regardless – we can help you navigate whether yours is truly legal or not.

When MCAs Might Become Illegal

1. Hidden or Exorbitant Interest Rates
   • If the “factor rate” effectively jacks up your repayment to an outrageous APR, some states might say it’s usury, which could be illegal.
2. Deceptive Terms
   • If the contract misleads you or buries crucial details in fine print, federal agencies like the Federal Trade Commission (FTC) or Consumer Financial Protection Bureau (CFPB) might label the MCA’s practices as unlawful.
3. Unauthorized Bank Debits
   • Some MCA lenders dip into your account more aggressively than agreed upon, which could violate state or federal consumer protection laws.

If you suspect any of these red flags—we can help you explore your legal options and defense strategies.

Penalties and Legal Risks

• If your MCA is deemed a disguised, illegal loan, you could end up:
  • Facing civil lawsuits over contractual breaches.
  • Battling potential criminal issues if fraud is alleged.
  • Wrestling with regulatory investigations, which can lead to massive fines or forced contract cancellations.

Anyway, no MCA lender wants you to file bankruptcy. They’d prefer to collect something, rather than lose everything. That’s why debt negotiation can be so effective.

Could Merchant Cash Advances Get Dismantled Entirely?
It’s possible. If enough courts or lawmakers decide MCAs function as high-interest loans, regulators might crack down. There could be new rules requiring lower interest rates, clearer disclosures, or direct oversight by banking commissions. Imagine a world where MCAs must follow strict guidelines—many “advance” providers could vanish overnight.

But that’s speculation. Right now, many MCAs operate freely, and business owners often have no choice but to deal with them.

Now – that debt is toxic, and it’s impossible to keep up.
Are you in that situation? We can help you.

Our Two-Pronged Approach
Delancey Street is owned by an attorney, which means we bring a legal edge to your MCA issues. Over 80% of our clients enter into a monthly payment plan, get an additional 1-3 years added to their terms, and reduce their overall balance.

1. In-Depth Contract Analysis
   • We review your MCA agreement. Is there a Confession of Judgment? Are there illegal interest rates?
2. Aggressive Negotiation
   • We talk to the MCA lender on your behalf—pointing out potential legal vulnerabilities which might force them to settle.
3. Legal Defense if Needed
   • If the MCA lender sues, we have a sister law firm ready to step in and defend you.
4. Transparency
   • We keep you informed at every stage. You’ll know exactly where things stand.

We saved a business owner over $400,000
They had multiple MCA debts, each costing them huge daily payments. Through our negotiation and consolidation strategies, we restructured their entire debt load, stabilized their cash flow, and rescued them from a potential bankruptcy. This is exactly how we can help you too.

What You Should Do Right Now

• Gather All MCA Contracts: Check for any suspicious terms, especially confessions of judgment or balloon payments.
• Review Bank Statements: Confirm the lender isn’t withdrawing more than agreed upon.
• Speak to an Expert: Delancey Street offers a money back guarantee. We’ll evaluate your options and tell you how we can fix the situation.

Bottom line
Merchant Cash Advances aren’t automatically illegal. But if there’s fraud, inflated rates, or unfair terms—they could be challenged in court or by regulators. Either way, we can help you figure out the right path forward.

Need help immediately?
Visit DelanceyStreet.com and schedule a free consultation to discuss how we can help you. We want you to focus on running your business while we handle the lenders.

Disclaimer: This article is for informational purposes and doesn’t create an attorney-client relationship. For personalized legal advice, consult a qualified attorney.