Steven Raiser is Chief Legal Officer, and Legal-Counsel at Delancey Street. Steven is a native of Long Island and has also resided in Manhattan and the Bronx.
Since being admitted to the New York Bar, Steven has represented the city of New York, serving as a Special Assistant Corporation Counsel. He handled all aspects of litigation in child neglect cases there, representing the interests of the children and the city. He then served as an Assistant District Attorney, where he successfully prosecuted hundreds of criminal cases, from violations of the Vehicle and Traffic Law to homicides. During his time as a prosecutor, Steven was involved in high-profile cases such as those involving Rapper DMX and NY Rangers’ Defenseman Sandis Ozolinsh.
While serving as a prosecutor, he joined the U.S. Army. As a commissioned officer in the Army National Guard Judge Advocate General’s Corps, Steven volunteered for active duty in Iraq. There he served in the office of the Staff Judge Advocate, defending soldiers from actions instituted by the federal government, making probable cause determinations for the command, and assisting in the training of Iraqi soldiers in legal proceedings. In recognition of his service in Iraq, he earned the Global War on Terrorism Expeditionary Medal for meritorious service in support of Operation Iraqi Freedom and the Army Commendation Medal for exceptional meritorious service during combat operations. He, along with his unit, received the New York State Bar Association’s Award for Excellence in Public Service and was presented with our state flag by Senate Majority Leader Joseph Bruno.
-Steven M. Raiser is admitted to practice law in the state courts and federal court in the Eastern District. On November 14, 2010, he was sworn in to the United States Supreme Court by Chief Justice John Roberts in Washington, D.C. Steven has appeared as a legal analyst for FOX, CNN, and Court TV (TRU TV). His interviews on CNN and FOX have been posted to their websites and have been showcased under “must see videos.”
Finding Relief from Merchant Cash Advance Debt
Merchant cash advances (MCAs) can seem like an easy way for small business owners to access capital quickly. However, the high fees and short repayment terms can trap businesses in a cycle of debt. If your business took out an MCA and is now struggling to make the daily or weekly payments, there are solutions available to find relief.
-Understanding Merchant Cash Advances
A merchant cash advance is a form of business financing where a company purchases a portion of your future credit card sales. You receive a lump sum payment upfront, and the MCA company takes a fixed percentage of your daily or weekly credit card sales until the balance has been repaid (plus fees and interest).Unlike a term loan, there is no set repayment schedule. The amount deducted fluctuates based on your credit card processing volume. This flexibility seems attractive at first, but can become problematic if your sales drop. Since repayments are taken as a percentage of each credit card transaction, it is easy to get caught in a debt trap if your volume decreases.
Falling Behind on Payments
When you entered into a merchant cash advance agreement, the payments seemed affordable. But for many small business owners, a slow season or economic downturn resulted in lower sales and an inability to make the high daily or weekly payments.You may now be facing aggressive collection calls, threats of a lawsuit or even bankruptcy. This can be an incredibly stressful situation. The first step is acknowledging there is an issue that needs to be addressed. Ignoring the problem will only make things worse.
Seeking Relief From MCA Debt
If making the payments is no longer feasible for your business, there are solutions to seek relief from the burden of MCA debt. Here are a few options to consider:
Debt Consolidation
One potential path is to consolidate your merchant cash advance balance into another form of financing with lower fees and more manageable payment terms. This can potentially help reduce some of the pressure and give your business more breathing room when money gets tight.A business line of credit or SBA loan may offer lower rates than an MCA. Working with a financing advisor can help you identify the most strategic debt consolidation options for your unique situation. They have experience negotiating with MCA providers to settle balances at a discount and move the remaining debt to a more affordable loan product.
Debt Settlement
If the MCA payments are completely unworkable for your business‘s current financial situation, debt settlement may be an option. This involves negotiating directly with the MCA provider to settle your outstanding balance for less than what is owed (sometimes as low as 50% of the remaining amount).The catch is that a settlement payment must be made upfront as a lump sum. For some businesses, offering 20-50% of what is owed is more affordable than continuing with the full payments. And it allows you to move forward debt-free.A small business lawyer familiar with MCA contracts can handle these negotiations on your behalf. They have the right experience fighting to get MCA debts reduced or dismissed. An alternative is hiring a debt settlement firm to secure the best possible settlement offer. Just make sure to vet anyone carefully before sharing sensitive financial details.
-Bankruptcy
While bankruptcy is certainly not an ideal outcome, it exists as a last resort if your business truly cannot recover from crippling MCA debt. Filing for Chapter 7 or Chapter 11 bankruptcy will put an immediate stop to collection efforts from creditors. MCA debts can potentially be discharged fully or in part.Of course, bankruptcy also comes with major damage to your business and personal credit. And there are legal fees associated with navigating the complex process. Seek advice from a qualified bankruptcy lawyer before making any filing decisions. Understand all the pros and cons for your situation.
Legal Action
In some cases, unfair or even illegal lending practices may have been used by an MCA provider. If you feel scammed or misled when signing your agreement, exploring legal action could be warranted.An experienced commercial litigation lawyer can review your MCA contract and the full history of communications with the lender. They can then advise if grounds exist to invalidate the agreement and relieve you of repayment obligations. Should a lawsuit be recommended, legal funding may even be available to finance attorney fees.
Getting Help
As you can see, multiple options exist for negotiating, reducing or eliminating difficult merchant cash advance debt. The key is being proactive and deciding on the most strategic approach for your small business.For advice and legal help tailored to your unique situation, consider posting on r/legaladvice or reaching out to attorneys in your state through Avvo. Relief from MCA debt is possible with the right guidance and representation.
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