Louisiana Merchant Cash Advance Legal Help – Attorneys, Debt Settlement
Merchant cash advances have exploded in popularity in recent years as a quick funding option for small businesses. Unlike traditional bank loans that can take weeks or months to secure, merchant cash advances provide capital in days in exchange for a share of future credit card sales.But merchant cash advances come at a steep price, often with equivalent annual interest rates exceeding 100%. And for businesses whose revenues take a hit, the fixed daily repayments can rapidly spiral out of control.If you took out a merchant cash advance in Louisiana and are now facing burdensome debt payments that are straining your business, there are legal options to seek relief. An experienced business attorney can help you negotiate a settlement, fight fraud or improper lending practices, and devise solutions to save your company.
How Merchant Cash Advances Work in Louisiana
Merchant cash advance companies provide lump sum payments to Louisiana businesses in exchange for a fixed percentage of daily credit card receipts. A typical contract deducts between 10-20% of sales until the advance is fully repaid plus fees and interest.For example, a New Orleans restaurant that took a $50,000 merchant cash advance may have to pay back $750 per day representing 15% of $5,000 in daily credit card transactions. At that rate, the restaurant would repay over $273,000 over the course of a year.While cash advances provide fast access to capital for marketing, equipment purchases, renovations or operating expenses, they can bury companies in debt if revenues decline. And they fall into a legal gray area in Louisiana.
-Louisiana Merchant Cash Advance Default Consequences
If your Louisiana business defaults on its merchant cash advance payments, the consequences escalate quickly:
- Account locks – The provider will freeze your merchant credit card processing account and any linked bank accounts. This instantly cuts off revenue streams.
- Harassment from collectors – Aggressive debt collectors start calling and visiting your business demanding repayment. This disrupts operations.
- Damages business relationships – The merchant cash advance company can legally contact your customers and vendors about the debt, harming goodwill.
- Lawsuits and judgments – The lender will likely sue your company for breach of contract. If they win a judgment, they can pursue bank levies, property liens, and asset seizures.
- Crippling debt – Between fees, interest, and legal costs, your original advance amount can double or triple rapidly. This debt burden can force businesses into bankruptcy.
While the situation appears bleak after a default, Louisiana companies do have legal defenses to reduce or negate merchant cash advance debt.
Louisiana Merchant Cash Advance Defenses
Skilled Louisiana business attorneys can raise arguments to invalidate all or parts of your merchant cash advance contract:
- Improper terms – Some agreements contain illegal provisions that courts won’t enforce. For example, confessions of judgement that waive your legal rights.
- Usury violations – Louisiana caps interest rates on loans at 12% APR. If the implied rate on your merchant cash advance exceeded this, the contract may be voidable.
- Lending violations – Since merchant cash advances fall into a legal gray zone in Louisiana, lenders may have failed to comply with state consumer lending laws.
- Unconscionable contracts – If the terms unreasonably favor the lender, courts can rule the agreement “unconscionable” and unenforceable. Elements like absurdly high interest rates can prove unconscionability.
In addition to legal arguments, skilled attorneys can negotiate favorable settlements in default situations:
-- Payment reductions – Your lawyer may convince the lender to lower the fixed daily repayment percentage to something more affordable. This avoids account locks while gradually repaying.
- Settlement discounts – Lenders often agree to reduced lump-sum settlements to avoid further legal costs. Settlements of 25-50% off the balance are sometimes possible.
- Favorable repayment terms – Attorneys can negotiate extended repayment terms at lower interest rates. This reduces the burden while keeping accounts open.
Finding Louisiana Merchant Cash Advance Legal Help
The experienced Louisiana business lawyers at Avvo can provide tailored legal guidance for your situation. They know Louisiana laws and can quickly analyze your merchant cash advance agreement to spot potential violations.After identifying possible defenses, attorneys negotiate expertly with lenders leveraging their legal arguments. In many cases, they secure greatly reduced settlements or improved repayment terms.Don’t wait until you are facing lawsuits and asset seizures to seek legal relief. The sooner you consult experienced counsel, the more leverage they have in negotiations. Louisiana merchant cash advance attorneys can often resolve situations before accounts get frozen or sent to collections.
Alternatives to Merchant Cash Advances in Louisiana
Rather than resorting to predatory merchant cash advances, Louisiana small businesses have safer funding alternatives:
- SBA loans – The federal Small Business Administration offers affordable loans with reasonable terms to qualifying companies. Loan amounts up to $5 million are available for working capital, equipment, renovations, and other uses.
- Business lines of credit – Louisiana banks provide revolving credit lines to businesses at competitive interest rates. You only pay interest on amounts drawn instead of fixed repayments. Lines up to $100,000+ are available.
- Business credit cards – Basic business credit cards offer 0% intro APR periods up to a year or more. This buys you time to pay for purchases interest-free.
- Invoice factoring – Funders purchase your unpaid customer invoices for immediate cash, then collect from your customers directly. Fees are usually less than merchant cash advance rates.
- Angel investors – Wealthy individuals and investor groups may inject capital into promising Louisiana startups in exchange for equity stakes. This avoids debt completely.
Conclusion – Seek Legal Relief for Louisiana Merchant Cash Advances
While merchant cash advances offer fast business funding, they can bury companies in crippling debt. If you face burdensome payments or account freezes, experienced Louisiana attorneys can help.Leveraging their expertise negotiating settlements and arguing legal defenses, lawyers often secure greatly reduced balances or improved repayment terms. Don’t wait to seek relief – skilled counsel can resolve many situations before lawsuits and judgments.With practical legal guidance, Louisiana businesses can resolve merchant cash advance troubles and get back to growth. Consult an attorney today to save your company.