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Miami Merchant Cash Advance Lawyers and Business Debt Relief
Running a small business is tough. Between managing employees, keeping customers happy, and trying to turn a profit, things can get overwhelming fast. And when cash flow starts running dry, it’s easy to panic. That’s why many business owners turn to merchant cash advances to keep their operations afloat.But merchant cash advances come with risks. The terms are often unfavorable, with extremely high effective interest rates. And if your business continues to struggle, you may end up owing more than you can realistically pay back. That’s when you may need to turn to a Miami merchant cash advance lawyer for help.
-How Merchant Cash Advances Work
A merchant cash advance (MCA) provides quick access to capital in exchange for a percentage of your future credit card sales. An MCA company purchases your future receivables at a discount. This provides you with a lump sum upfront, while the MCA company collects fixed daily payments until the purchased amount plus fees and interest have been repaid.For example, an MCA company may provide you with $100,000 upfront in exchange for $130,000 in total payments from your credit card sales over time. You would then owe the MCA company a fixed percentage of your daily credit card receipts – typically between 10-20% – until the full $130,000 is collected.
The Risks of Merchant Cash Advances
While merchant cash advances provide fast access to capital, they come with considerable risks:
- Extremely high effective interest rates – MCAs often equate to 50-400% APR when calculated as an interest rate. This makes them much more expensive than traditional bank loans.
- Daily repayment pressure – The fixed daily payments can put extreme pressure on cash flow, especially during seasonal business fluctuations.
- Possibility of owing more than received – If your business revenues decline, you still owe the fixed daily payments. You may end up paying back far more than the amount received.
- Personal liability – MCA agreements often require a personal guarantee, meaning your personal assets are on the hook if your business can’t pay.
- Aggressive collection tactics – Some MCA companies use harassment and threats to collect payments, including accessing business bank accounts directly.
Working with a Miami Merchant Cash Advance Lawyer
If your Miami business is struggling under the weight of a predatory merchant cash advance agreement, working with a lawyer may help alleviate some of the pressure. An experienced attorney can review your agreement for unlawful terms and improper collection practices. They may also be able to negotiate a settlement or payment plan that works better for your business’s financial situation.Some key reasons to contact a merchant cash advance lawyer include:
Renegotiating Unreasonable Terms
Most MCA agreements allow the funder to access your bank accounts directly to collect daily payments. If these payments exceed a reasonable percentage of your sales, an attorney can often negotiate more favorable terms.
-Disputing Harassment & Improper Collections
If the MCA company uses aggressive tactics like threats and constant phone calls, this may violate federal and Florida debt collection laws. An lawyer can get the harassment to stop and potentially eliminate some debt owed.
Challenging Confusing & Deceptive Contract Terms
Many MCA contracts include confusing terminology and misleading statements about potential costs. A lawyer can identify unlawful terms related to interest rates, fees, etc. and fight to get the agreement invalidated.
Filing Bankruptcy for a Fresh Start
If debts are totally unmanageable, filing for bankruptcy may be an option. This can eliminate or restructure debts for a clean slate. An experienced bankruptcy lawyer can advise if this is a good path forward.
Miami Merchant Cash Advance Lawyers Can Help
Predatory merchant cash advances sink countless Miami small businesses each year. If you’re struggling under the weight of a merchant cash advance agreement that is dragging you under, contact a qualified business attorney right away. They can review your agreement for any rights you may have to reduce payments, invalidate unfair terms, halt collections pressure, negotiate settlements, or wipe debts away in bankruptcy.With an attorney in your corner, you may be able to avoid business failure and get back to growth. Don’t wait – relief may be just a phone call away.
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