Tampa Merchant Cash Advance Legal Help – Attorneys, Debt Settlement
Merchant cash advances can be a great financing option for small businesses, but they also come with legal risks. If your Tampa business took out a merchant cash advance and is now facing legal issues or debt problems, don’t panic. You have options. This guide will walk through the common legal issues around merchant cash advances, your defenses, and how to get reliable legal help in Tampa.
The Problem with Merchant Cash Advances
A merchant cash advance (MCA) provides quick financing by buying a portion of your future credit card sales. You get a lump sum, and the MCA company takes a fixed percentage of daily credit card revenue until the balance is repaid (plus fees). Unlike a loan, MCAs don’t have fixed monthly payments.This flexibility comes at a price – literally. MCAs typically charge the equivalent of 60-200% APR when fees are included, making them one of the most expensive financing options out there. And if your business has a slow season or unexpected drop in revenue, you can end up owing far more than expected.Many MCA companies use aggressive collection tactics, like remotely accessing your credit card terminals to take more of your money. Some providers even sue merchants over breach of contract if they fall behind on payments.
-Common Legal Issues Around Merchant Cash Advances
As an MCA provider takes more of your revenue, you may face cash flow issues, late payments to vendors, or problems making payroll. Many merchants realize too late how the MCA contract works against them.
Breach of Contract Lawsuits
If you fall behind on your payments, the MCA company may claim you breached your contract and sue for the remaining balance plus fees. Some providers even try to garnish merchant accounts or other assets.Defending against an MCA lawsuit takes legal experience. For example, showing that the agreement is “unconscionable” due to unfair terms or misrepresentations can invalidate the contract. An attorney can also review the agreement for violations of state laws around usury (excessive interest rates) or lending practices.
Unfair Lending Practices
Merchant cash advance companies are largely unregulated compared to banks. But some federal and Florida consumer protection laws still apply.For example, the FTC’s Telemarketing Sales Rule forbids advances providers from taking payment without your signature on a written agreement. The Truth in Lending Act also requires disclosure of fees and APRs on financing products – which many MCA companies fail to provide.If you didn’t get the proper disclosures or signed the contract under false pretenses, these violations may provide leverage to reduce what you owe.
Deceptive Sales Tactics
While some MCA brokers provide a valuable service, others use deception and pressure tactics to sign merchants up for terrible deals.Some common complaints are brokers misrepresenting terms, falsifying applications to lock in more financing, or claiming the money is an investment rather than a loan.Under Florida law, victims of fraud can recover damages from brokers or lenders who intentionally misled them. Proving fraud requires experienced legal help, but it can lead to a settlement or contract voiding.
-How Can a Lawyer Help?
If you’re struggling with an MCA contract gone wrong, don’t fight it alone. An attorney experienced with merchant cash advances can provide defense strategies and negotiate settlements. Potential options include:
- Reviewing the MCA agreement for violations you can leverage
- Drafting responses to breach letters or lawsuits
- Building a case around deceptive sales tactics or predatory lending
- Negotiating with the MCA provider for reduced payoff amount
- Creating a long-term payment plan that works for your business
- Helping restructure finances to retain assets and avoid bankruptcy
The right lawyer will thoroughly analyze your situation, explain your rights and options, and fight to put your business back on steady footing.
Finding the Best Attorney for Your Case
Florida has no shortage of lawyers, but you need someone who specifically understands the complexities around merchant cash advances. Here’s how to find the right fit:
- Search for attorneys with MCA experience – Many business lawyers can help with contracts or debt relief, but look for those who list merchant cash advances directly. They should be familiar with the common disputes and relevant caselaw.
- Read reviews and ask for case examples – Any lawyer can say they know how to defend MCA cases, but look for proven experience. Check reviews and testimonials, or ask for examples of related cases they’ve handled successfully.
- Understand the fee structure – Every lawyer charges differently. Some may take a flat rate to review your case or attempt settlement negotiations. Others will charge hourly with rates ranging from $100-500+ per hour depending on experience. Be clear on costs before moving forward.
- Click with your attorney – You’ll be sharing sensitive financial details and trusting their judgment. Make sure you choose someone who you feel comfortable with and who responds promptly to questions.
Finding the right legal partner can help turn the tables on an exploitative merchant cash advance company and pave the way to financial stability. Don’t wait – relief starts with a simple conversation about your options.
Common Legal Defenses Against Merchant Cash Advance Lawsuits
If you get hit with a breach of contract lawsuit over a merchant cash advance agreement gone bad, all hope isn’t lost. Experienced attorneys have had success defending similar cases using arguments like:
-Unconscionability
If the agreement’s terms unreasonably favor the MCA company or the contract is impossible to reasonably comply with, courts may rule it invalid. Proving unconscionability depends on specifics of the case.
Misrepresentations
If the broker or sales rep misled you on repayment terms, interest rates, or other key details, that may invalidate the contract. Recording calls and saving written correspondence is key to proving misrepresentations later.
Illegal Lending
Excessive rates or fees might violate state laws against usury (illegal interest rates). Additionally, some MCA companies should be licensed lenders but try to skirt laws that limit rates.
-Statute of Limitations
If too much time has passed between your last payment and the lawsuit, the court may dismiss the case. But complicated contract law means determining the cutoff date requires legal review.
Finding the Right Tampa Attorney for Your Merchant Cash Advance Case
If you’re struggling with a merchant cash advance debt spiral or unfair lawsuit, finding the right Tampa attorney is critical. Avoid handing your case over to just any lawyer. You need someone with specific experience defending small business clients against predatory MCA companies.Look for lawyers with proven success negotiating settlements or getting favorable rulings in MCA disputes. Check reviews and ask for case studies. Meet with attorneys before retaining one to ensure you click and they understand the nuances of defending merchant cash advance cases.The right partner can help expose unlawful lending practices, misleading sales tactics, or contract violations to invalidate debts or win dismissals. They may also negotiate reduced payoff amounts or affordable long-term payment plans.Don’t wait to seek legal help. You have rights, and a knowledgeable attorney can strategically apply pressure points to resolve merchant cash advance disputes favorably. The sooner you start those conversations, the faster you’ll find financial relief.