Struggling with debt?

MERCHANT CASH ADVANCE DEFAULT: HOW TO IDENTIFY AND FIX CONTRACTUAL LOOPHOLES

Delancey Street offers a money back guarantee for debt relief services, because we believe in delivering real results for businesses drowning in toxic merchant cash advance debt.

WE ARE DELANCEYSTREET.COM – A TOP TIER BUSINESS DEBT RELIEF COMPANY

We are not NYC CRIMINAL ATTORNEYS. We are a DEDICATED team of professionals, helping businesses dealing with defaulted MCAs, notices of default, and impossible daily and weekly payments.

AS SEEN ON major media outlets – we’re recognized for our ability to reduce your overall debt and help you avoid going out of business.

Here’s the bottom line
Merchant Cash Advance agreements ALWAYS have hidden terms and endless penalties. They can cripple your business with no warning, lead to lawsuits, judgments, and even personal liability if you signed a personal guarantee. Either way, we understand many of these MCA contracts are filled with complicated clauses, which can blow up the minute you miss a payment. In some cases, the lender wants you to default – because they make more money that way with penalties, and other punitive fines.

Regardless of where you stand in your MCA default process, regardless of the situation, regardless of the stage – there might be a contractual loophole we can identify and fix. Because at Delancey Street, we can help you – we’ve settled 10’s of millions of dollars.

WHAT ARE THE PENALTIES OF DEFAULT?

When you fail to make your MCA payments, the lender might immediately do any of the steps below:

• File a Confession of Judgment (COJ) – letting freeze your bank accounts almost overnight.
• Levy Your Accounts Receivable – get funds from clients and vendors.
• Attach Liens to Business Assets – using the Uniform Commercial Code (UCC) to seize your equipment or property.
• Threaten Personal Assets – this is bad if you signed a personal guarantee, meaning your home or car might be fair game for a repossession by the lender.

These penalties often occur simultaneously. If the MCA is in fact a disguised “loan,” you could be facing an outrageous interest rate, which in some states might be considered usurious.

IDENTIFYING POTENTIAL CLAUSES IN YOUR MCA CONTRACT

1. Reconciliation Clauses
   If your MCA contract includes a “reconciliation” or “true-up” provision, the lender is supposed to adjust the withdrawals if your business has a dip in its revenue. One scenario is the merchant’s revenue goes down, but the MCA lender keeps withdrawing the same daily or weekly amount. If the MCA agreement requires an reconciliation adjustment but never gave you one, that’s a potential breach. It means the lender is in default of the agreement – and you can go after the lender for defaulting on the agreement.

2. Excessive Default Penalties
   Some contracts tack on insane fees as soon as you miss the monthly payments. They might call them liquidated damages or penalty rates. Under the law, penalty clauses that aren’t tied to actual damages can be challenged. The SBA at https://www.sba.gov/ has resources – if you read it, it can help you see if you were subjected to unfair or predatory terms.

3. Ambiguous Language
   If the contract is filled with contradictory paragraphs and the daily payment schedule is impossible to follow, that ambiguity could be used against the lender. A well written contract should clearly define every party’s obligations. If not, it might be grounds to fix or dismantle the toxic clauses.

4. Potential Usury
   Many MCA lenders say they’re “selling future receivables,” but in reality, if the agreement forces you to pay a fixed sum, with no real change on your revenue, courts might reclassify the MCA as a loan. This means the MCA contract loses the protections afforded it to it as an advance. If the interest rate crosses legal limits, it could be deemed usurious – especially in states with strict interest caps.

HOW DELANCEY STREET DEFENDS YOU

We bring a team of attorneys, negotiators, and business debt specialists who focus on the best possible outcome. One solution might be a business debt settlement program. Another scenario might be a merchant cash advance consolidation. Regardless of the game plan, we aim to minimize the total you owe.

When you join our program, we:

• Review the MCA Contract First
  We identify every single hidden clause, examine how the “factor rate” is calculated, and find loopholes that might work to your advantage especially if you have to go to court.
• Check for Contractual Violations The Lender Did
  If the MCA lender never adjusted your payments despite a stated “flexible repayment” clause, that’s a potential breach of the agreement, and it puts the MCA lender in defense. We can help you use that to negotiate or defend against them in court.
• Challenge COJs or Penalties Imposed On You
  If you signed a COJ and the lender is trying to enforce it in a state that bans out-of-state confessions of judgment, we can help you.
• Negotiate a Reduced Principal And Lower Factor
  In many situations, lenders will prefer a settlement which ensures they get something rather than litigation. We can often get them to lower the total amount – sometimes by 20-60%.
• Prevent Business Shutdown And Bankruptcy
  We work to keep your bank accounts open, your receivables accessible, and your overall business functional. No lender wants you to file bankruptcy if it’s avoidable.

In short, it’s about using the law to expose and fix the flaws in the MCA contract, whether it’s by negotiation or by fighting back in court. We can help you avoid going out of business, or worse, losing your personal assets.

 RECAP

• Identify ambiguous, contradictory, or missing clauses in your agreement
• Invoke any relevant “reconciliation” or “contingency” terms that the lender didn’t abide by
• Assess potential usury and excessive penalty issues which can be used for negotiation purposes
• Challenge confessions of judgment that violate state laws, in order to release your assets
• Negotiate or settle if it’s better than protracted litigation

AT DELANCEY STREET, WE STAND BY YOU

We pride ourselves on being a DEDICATED group. We know the merchant cash advance landscape, the tactics of these MCA lenders, and the pushy collection calls they make. Our experience matters, our reputation matters, our results matter.