Montana Merchant Cash Advance Legal Help
Montana merchant cash advance legal help header imageMerchant cash advances (MCAs) can provide quick access to capital for small businesses in Montana, but they also come with risks. If your business has struggled to repay an MCA, you may need legal help to negotiate a settlement or defend against a lawsuit. This article provides an overview of MCA laws in Montana and how attorneys can assist.
How Merchant Cash Advances Work
A merchant cash advance is a form of business financing where a company purchases a portion of your future credit card sales. The MCA provider gives you an upfront lump sum, which you repay by allowing them to collect a fixed percentage of daily credit card receipts.Unlike a loan, MCAs do not have fixed monthly payments or interest rates. The total cost depends on how quickly you repay the advance from card sales. However, MCAs often translate to very high annualized rates exceeding 100% APR.
-Potential Legal Issues with Merchant Cash Advances
While MCAs seem straightforward at first, several issues can trigger legal problems down the road:
- Excessively high repayment costs – Some MCA contracts extract 2-3 times the original advance amount. Attorneys can review if terms are unconscionable.
- Declining credit card sales – If sales volumes drop, payments may spiral out of control. This can accelerate default.
- Allegations of fraud or misrepresentation – MCA providers might claim you misled them about sales volumes to secure financing.
- Contract disputes and violations – Disagreements over repayment terms, billing practices, allowable deductions, and other issues can end up in court.
- Debt collection harassment – MCA providers are aggressive with collections. Attorneys can stop harassment.
- Personal guarantees and collateral – Owners who sign personal guarantees or put up collateral are at risk if the business defaults.
Having experienced legal counsel in your corner levels the playing field when disputes arise over an MCA contract.
Montana MCA Laws and Regulations
Montana has specific laws governing merchant cash advances and other alternative small business financing:
- No interest rate caps – The Montana constitution prohibits limits on business loan rates. So there are no interest rate caps for MCAs in the state.
- Licensing requirements – MCA providers must have a Montana consumer loan license to operate. Unlicensed activity can invalidate contracts.
- Disclosure mandates – By law, MCA agreements must disclose annualized rates, total repayment amounts, and other key terms. Missing disclosures may provide contract defenses.
- Right to cancel – Small businesses have a 3-day right to cancel an MCA contract under Montana’s “cooling off” rules. This option expires quickly so timing is critical.
- Ban on confessions of judgment – MCA contracts cannot require business owners to admit fault or liability upfront. Attorneys can leverage this provision.
- Other consumer protections – As financial products, MCAs are subject to state lending and consumer protection laws against unfair/deceptive practices.
Having an attorney review your MCA agreement for compliance with Montana laws can uncover important defenses and arguments.
-Working with an MCA Attorney
Here are some key ways a Montana business attorney can help if you face legal issues with an MCA provider:
- Contract review – Carefully analyze MCA terms for weaknesses and violations of state law.
- Renegotiate terms – Approach the MCA company to try to reduce repayment amounts to affordable levels.
- Rescind contract – Exercise right to cancel if cooling-off period still open.
- Defend lawsuits – Fight back if sued for breach of contract over non-payment.
- Stop harassment – Send cease and desist letters if excessive collection efforts.
- Dispute debts – Challenge validity of debts through formal dispute processes.
- Explore bankruptcy – File Chapter 7 or Chapter 11 bankruptcy if appropriate to eliminate debt.
Having legal counsel levels the playing field when contesting adverse actions taken by merchant cash advance providers. Don’t hesitate to contact an attorney if your business faces MCA legal troubles.
Finding the Right MCA Attorney
If you need legal help with a merchant cash advance in Montana, look for an attorney with specific experience assisting clients with MCA issues.Ask prospective lawyers about their track record helping other businesses:
- Renegotiate unfair MCA agreements
- Rescind contracts within cooling-off periods
- Defend breach of contract lawsuits
- Stop collection harassment
- Dispute debts through legal processes
Avvo, FindLaw, and Justia provide directories to search for qualified local MCA attorneys.During consults, come prepared with a copy of your MCA contract and documentation of communications with the financing company. This helps lawyers review your situation faster.
Don’t Delay Getting Help
The most important thing is not to delay in seeking legal help at the first sign of problems with a merchant cash advance. MCA issues rarely resolve on their own. Having skilled legal counsel can pressure companies to offer settlements and protect your interests in court.With an experienced Montana attorney assisting you, there are many ways to defend against excessive repayment demands or even rescind contracts within regulatory cooling-off windows. But you must act quickly once cash flow problems start with an MCA contract.
-Montana Merchant Cash Advance Help Is Available
Unaffordable merchant cash advance payments can crush a promising Montana small business. But legal options exist to reduce debts and defend your rights. Connect today with a qualified local attorney to discuss your situation during a free consultation. With the right legal strategy, you can regain control of your finances and move forward on steadier footing.