Delancey Street Saves a Business Owner Over $400,000!
Missing a merchant cash advance (MCA) payment can happen fast – it just takes one bad weekend of sales.
It can happen even when you were trying your hardest. It can happen when you least expect it.
We understand how urgent this feels, which is why we offer a money back guarantee for our debt relief services. We are one of the few in the industry to offer a money back guarantee.
Immediate Steps You Must Take the Moment You Miss an MCA Payment
Evaluate Your Agreement
Begin by reviewing the exact merchant cash advance contract you signed. Often, MCA lenders add clauses which can trigger penalties the moment you default. For example, some include “Confession of Judgment” clauses which allow lenders to fast-track a judgment if you’re behind on payments. The Federal Trade Commission (FTC) (https://www.ftc.gov/) has scrutinized certain MCA practices for being unfair or deceptive, which is something you should be aware of when you’re evaluating your agreement. This can be a form of defense, if you end up having to go to court.
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Notify the Lender
Most lenders want to be paid and might be open to renegotiating a new payment schedule. They are open to re-structuring your debt, if you can show there is pain in the business. If you wait too long, the lender may interpret your silence as you trying to screw them out of money, which can increase the likelihood of accelerated penalties or lawsuits.
Tip: A quick phone call can sometimes prevent the situation from turning into extensive litigation. -
Analyze Potential Penalties
Missing a payment can trigger late fees, penalty APRs, or even immediate lump-sum demands. Some MCA agreements allow the provider the right to pull funds from multiple accounts, which can drain your cash flow unexpectedly. They are able to seize assets from multiple bank accounts, all in one swoop. If the lender asserts they’re enforcing a Confession of Judgment, it’s crucial you understand the local laws in your state, since certain states heavily regulate or ban them. Check your state’s attorney general website or the Small Business Administration (SBA) (https://www.sba.gov/) resources for up-to-date information on such clauses. -
Assess Your Legal Standing
Potential lawsuits can include breach-of-contract claims, personal guarantee enforcement, or even allegations of fraud if the lender believes you misrepresented anything. According to the Federal Trade Commission Act, 15 U.S.C. § 45, certain deceptive or predatory lending practices may also come into play, which can affect how your defense strategy plays out. -
Contact a Professional Business Debt Relief Company
This is when you call DelanceyStreet.com. We are a top-tier business debt relief company, which means we can do more than just talk—we can actually help. Our experience in negotiating MCAs is immense. Our money back guarantee is there so you know we stand behind our work.
Penalties You Might Face for a Missed MCA Payment
- Daily Penalties: If you have a daily repayment schedule, missing a payment can result in late fees which add up quickly.
- Higher Factor Rate: Certain MCA providers may adjust your factor rate once you’re labeled as a “risky borrower.” If they lend you money again, it’ll be at a higher rate.
- Acceleration of Debt: Missing one payment could trigger a clause which makes the entire amount due immediately.
- Legal Action: Lawsuits, mandatory arbitration, and judgments can be initiated at the discretion of your MCA provider.
Real Laws to Keep in Mind
- Uniform Commercial Code (UCC): Some MCA providers file a UCC-1 lien, which can impact your ability to get new funding.
- Federal Trade Commission Act: Prohibits unfair or deceptive acts and practices in commerce. This is critical if you suspect the MCA terms might be predatory.
- State Usury Laws: While many MCAs claim to be “purchase of receivables” and not loans, certain states might apply usury or other finance regulations if an MCA is deemed a disguised loan.
Delancey Street Offers a Money Back Guarantee
Yes, we do. We believe in our ability to help you. We believe in our top-tier representation. We believe in doing everything possible to shield you from harsh MCA consequences.
Defense Strategy: How We’d Fight for You
We Fight. We Protect. We Win.
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Legal Review of Your MCA
We look at every clause of your merchant cash advance agreement to see if it violates state or federal guidelines. If we find any questionable language, we leverage it to your advantage during negotiations or in court. -
Negotiate a Settlement or New Terms
We speak directly with the MCA provider’s legal team, which can result in dramatically reduced sums or longer repayment timelines. Often, we strive to extend payment periods by an additional 1-3 years. -
File Defenses in Court, if Necessary
If you’ve been sued, we’ll vigorously defend you. Whether the issue is personal guarantees, Confession of Judgment, or alleged defaults, we counter with every available defense. We might argue that the MCA terms were unconscionable, or that the factor rate is effectively usurious. We have a team of attorneys, ready to help you – and one of our founding partners – Steven Raiser, is an attorney. -
Pursue Counterclaims (When Applicable)
If the MCA provider employed predatory tactics or misrepresented the arrangement, you may have grounds for a counterclaim under consumer protection statutes. -
Proactive Communication with Other Creditors
We coordinate with your other creditors (like credit card issuers or vendors) to structure a holistic plan which prioritizes your most urgent liabilities. This can help restore your cash flow and stabilize your operations.
Our Stream of Consciousness: How Could This Entire Debt Situation Get Dismantled?
Imagine you’re standing on a battlefield, surrounded by daily MCA payments, personal guarantees, and threatened lawsuits. Then imagine a single piece of paper that reveals the lender’s terms might be in violation of local or federal regulations. That single piece of paper could unravel the entire lawsuit.
When you hire DelanceyStreet.com, we go on a hunt for that piece of paper. We dissect your MCA contract from top to bottom—looking for mistakes in drafting, interest calculations which breach usury thresholds, or clauses that conflict with your state’s laws. Our sister law firm reviews the entire situation, which can mean we unearth hidden defenses the average person would never see.
AS SEEN ON major media outlets, we have cultivated relationships with lenders, negotiators, and the legal community. Because of these relationships, we can often secure fast resolutions and potentially protect you from runaway collection actions. Lenders know that when we’re working with a client – that we’re not going to mess around, and that we’re serious about settling the debt.
Powerful Steps You Can Take on Your Own
- Document Everything: Keep thorough records of all communications with your MCA provider. This can be invaluable if you need to prove “unreasonable or deceptive practices.” Our attorneys might ask for this, in order to help you.
- Review Your UCC Filing: Check if a UCC-1 financing statement has been filed against your business, which can impact your assets.
- Contact the SBA: The Small Business Administration (SBA) (https://www.sba.gov/) has resources which can connect you with local mentors or helpful programs if you’re in serious financial distress.
- Consult State Authorities: Some states allow direct complaints against predatory lenders. If your MCA contract includes questionable terms, your state’s Department of Financial Services might intervene. This is a plan B. Our main plan is to fight the lender and restructure your debt.
Case Spotlight: The Debt Spiral That Turned Into Freedom
Delancey Street saves a business owner over $400,000!
We once had a client who stacked multiple MCAs. Daily payments were strangling the business. The moment our attorneys got involved, we found that one of the lenders misapplied the factor rate, inflating the payoff sum by 25%. We used this error to negotiate a lump-sum settlement for a fraction of the total.
Ultimately, we preserved the business from default. We preserved the owner’s personal assets. We preserved the brand’s reputation.
You Deserve Top-Tier Representation
If you missed a merchant cash advance payment, we can help you get out of debt. If you’re threatened with a lawsuit, we can help you. If you feel trapped in a debt spiral, we can help you. Just reach out to us, and schedule a consultation today.