Oregon Merchant Cash Advance Legal Help – Finding the Right Attorney
Running a small business can be tough, especially when cash flow gets tight. That’s why many business owners turn to merchant cash advances to get quick access to capital. But these financing agreements also come with risks – if you fall behind on payments, you could end up dealing with aggressive debt collectors or even lawsuits. Fortunately, there are attorneys in Oregon who can provide legal help defending your rights. This article will cover the basics of merchant cash advances, common legal issues that arise, and how to find the right legal help if you run into trouble.
What is a Merchant Cash Advance?
A merchant cash advance (MCA) is a form of business financing where a company purchases a portion of your future credit card sales. You get a lump sum payment upfront, and the MCA company takes a fixed percentage of your daily credit card receipts until the balance has been repaid (plus fees and interest).Unlike a term loan, there’s no set repayment schedule – the payback period depends on your sales volumes. This flexibility makes MCAs appealing for businesses with irregular cash flow. However, the costs can also quickly spiral out of control if sales drop unexpectedly.
-Common Legal Issues with Merchant Cash Advances
While MCAs provide fast access to working capital, they also come with a minefield of potential legal problems, such as:
Excessively High Effective Interest Rates
While MCA companies don’t charge “interest” per se, the fees and fixed daily payments can result in insane annualized rates exceeding 100-200% APR or more. These usurious rates may be illegal under Oregon laws against predatory lending.
Aggressive Collections and Improper Debt Collection Practices
Many MCA providers quickly resort to aggressive tactics like harassing phone calls, lawsuits, or even trying to garnish bank accounts when payments fall behind. They may violate consumer protection laws like the Fair Debt Collection Practices Act.
Confusing and Deceptive Contract Terms
Merchant cash advance contracts often contain confusing terminology and omit key details about the costs, repayment terms, and consequences of default. This can obscure the extreme risk some businesses take on.
-Personal Guarantees and Cross-Collateralization Clauses
Many MCA companies require a personal guarantee from the business owner, making them personally liable for the debt. Others include “cross-collateralization” clauses used to seize other assets or access personal bank accounts if the business defaults.
Finding the Right Attorney for Legal Help
If you’re struggling with MCA debt or an aggressive collections lawsuit, finding an experienced business attorney is critical. Look for lawyers with specific experience helping clients in MCA-related cases. Key credentials to consider include:
Background in Commercial Litigation and Contracts
An attorney well-versed in contract law can review your MCA agreement for unenforceable or predatory terms. Litigation capabilities are also key to defending collection lawsuits and even bringing countersuits against unscrupulous lenders.
Understanding of Consumer Financial Protection Regulations
Navigating consumer finance laws and regulations like usury caps, debt collection practices, and disclosure requirements requires specialized legal knowledge. Find a lawyer familiar with Oregon’s consumer lending protections.
Experience Negotiating MCA Settlements
An attorney with a successful track record settling MCA-related disputes is invaluable. Through negotiations they may resolve lawsuits or debts for a fraction of the balance. This can save your business while avoiding the risks of trial.
-Don’t Face MCA Problems Alone – Legal Help is Available
Dealing with merchant cash advance legal troubles can be overwhelming for small business owners already stretched thin. But facing the aggressive collections tactics of MCA companies alone rarely ends well. If you’re struggling with a predatory contract, harassment from debt collectors or an impending lawsuit, contact an experienced attorney. With the right legal advice and representation protecting your interests, you can resolve MCA-related disputes and save your business.