Boost your cash flow, safeguard your assets, and secure your business future
A merchant cash advance (MCA) can help California small business owners secure upfront cash flow quickly. If you don’t otherwise qualify for a small business loan, this type of financing might be useful. However, MCAs aren’t technically loans; MCA lenders often charge high fees that might result in an unmanageable financial position for your business.
If you’re currently contracted with a merchant cash advance company and are struggling with this debt, an MCA attorney can help you safeguard your business interests.
A merchant cash advance is a fast alternative financing option that provides lump-sum disbursement of capital for small businesses. The extra capital might be used to keep your business afloat during seasonal slowdowns, scale your existing operations, or toward other immediate business needs.
Merchant cash advance companies usually don’t require collateral, and primarily look at your business revenue or card transactions to determine your MCA approval. This flexible eligibility criteria can be appealing, particularly for businesses that don’t have a strong credit score.
To recoup the debt, MCA providers take a portion of your future debit and credit card sales as payment, plus fees. The MCA lender is essentially purchasing a cut of your business’s future receivables.
If your business doesn’t typically receive a high amount of card transactions, some MCA lenders draw a fixed amount from your business bank account based on your monthly sales revenue. This withdrawal usually occurs in weekly or daily payments.
In California, a merchant cash advance is a legitimate and legal way to obtain an injection of cash flow for your business. The state enacted the California Financing Law (SB 1235) in 2018 to tighten licensing and disclosure requirements for MCA providers. The legislation is designed to offer borrower protections through heightened transparency regarding interest rates, financing costs, penalties, and more.
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Merchant cash advances are high-risk alternative funding solutions that aren’t as heavily regulated under federal law, compared to other types of business financing.
Some states, like California and New York, have recently put regulations into place that protect small business owners from murky MCA fees and repayment terms. Despite these efforts, MCA debt can quickly balloon, compromising California business owners’ financial stability over the long-term.
Merchant cash advance attorneys have specialized knowledge about MCAs. They offer guidance and counsel for your business before you get an MCA and afterward. Here are a few ways an MCA attorney can support your California business:
MCA attorneys read through your contracts to identify and explain how clauses, like Confession of Judgment (COJ) and Uniform Commercial Code (UCC) liens, can affect your business.
A merchant cash advance business debt attorney negotiates a restructure directly with the MCA provider to protect your business’s interests, and facilitate disputes.
They flag non-compliant practices performed by the provider, and seek redress in support of your business.
Merchant cash advance relief attorneys stay informed about the latest California regulatory changes, and provide tailored legal advice about current MCAs and future debt relief solutions.
If the merchant cash advance lender is unwilling to restructure your debt, an MCA debt help attorney helps take the pressure off of an already stressful situation by filing paperwork with the court and representing you during your case.
There are a handful of tell-tale signs that you might benefit from the guidance of a merchant cash advance debt help attorney:
If one or more of these statements hits home, hiring a merchant cash advance attorney might offer the clarity and relief you need.
As a California small business, it can be disheartening to see how a merchant cash advance can adversely impact you, if you’re unable to repay the debt. Having an experienced attorney in your corner who works regularly with MCA debt relief can help your business regain stability so you can focus on moving forward.
If you’re struggling with MCA payments, or are at risk of defaulting on an MCA debt, you need a trustworthy legal team at your side. The Tayne Law Group, P.C. is an award-winning business debt relief law firm with more than 20 years of experience negotiating debts like MCA’s. We’ve helped countless small businesses with a customized, manageable plan to tackle their MCA debt and get back on track.
Receive a free phone consultation to learn more about our services at (866) 890-7337 or fill out our short contact form to get the information your business deserves to make an informed decision on what to do with your MCA debt. All information shared during the conversation is confidential, and your information will never be sold to a third-party.
After more than 20 years of working solely in debt relief, Tayne Law Group has established healthy and long-lasting relationships with business lenders, creditors, and merchant cash advance lenders and companies. Because we’re a law firm, our process is respected, which, in the end, saves you time and money.
The owner of a local food market came to us with $58,000 in debt from his merchant cash advance loan with Everest Business Funding.
The owner of a cheerleading gym came to us as a borrower with $19,028.12 on an MCA with Lendini. She was dealing with other cash advances at the time, and this account became too much to handle.
The owner of a plumbing business was never paid on a big contract. To keep up with the bills he got an MCA with QuarterSpot. When he couldn’t pay the $72,230.64 balance, he became a client.
Yes, a merchant cash advance is a legal form of alternative business financing in California. Under regulation SB 1235, merchant cash advance providers are required to give small businesses clear disclosures about the MCA agreement. This heightened disclosure transparency includes the use of annual percentage rates (APRs) to express financing costs, instead of annualized cost of capital (ACC); it also requires a breakdown of financing details, like the total borrowing cost, repayment term, payment method and number of payments, as well as prepayment penalties.
A few ways to get out of repaying an MCA business debt includes options like getting a business consolidation loan for the MCA debt, if you have the requisite credit, settling the debt with the creditor, negotiating a new payment schedule or filing for bankruptcy- which would be an extreme option. Each of these options requires a strategic, well thought out and knowledgeable approach that is guided by an experienced MCA debt relief attorney. Getting help from a business debt solutions law firm with a focus in merchant cash advances is always advisable.
A merchant cash advance requires skilled negotiation with your MCA provider. The goal of restructuring an MCA agreement is to work out a lower, mutually agreeable payment which serves to resolve and settle the debt. MCA debt settlement may be an option where you and the provider finally part ways, but it’s a precarious situation to navigate on your own with all kinds of legalities and legal traps. If you’re considering a debt settlement, seek expert debt help legal advice to avoid further headaches and challenges to your personal credit and business cash flow.
If your business has significant debt and you’re struggling to repay it, know you aren’t alone. According to Zippia, at least 70% of small businesses in the United States have some form of debt, whether it be loans, credit cards, merchant cash advances, or something else. Another independent news organization found the average small business […]
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