Have you been contacted by Velocity Capital Group about your business debt? Here’s how to make sure the communication is legitimate, what your next steps should be, and whether it’s a good idea to hire a debt relief attorney to help.
Who is Velocity Capital Group?
Velocity Capital Group is a small business lender specializing in offering revenue-based financing, also known as merchant cash advances (MCAs).
Is Velocity Capital Group Legitimate?
Yes, Velocity Capital Group is a legitimate company. It’s been in business for six years and has provided business financing for more than 15,000 borrowers. The company is also accredited by the Better Business Bureau (BBB), further proving its legitimacy.
However, just because the company is legitimate doesn’t mean there aren’t risks for borrowers. Velocity Capital Group specializes in revenue-based financing, which often comes with lenient eligibility requirements, high fees, and short repayment terms, which can often lead to borrowers being unable to repay their debts.
Before working with Velocity, it’s important to research your options and ensure that revenue-based financing is the right choice for your company.
Overview of Velocity Capital Group
Velocity Capital Group was founded in 2018 in New York. Its founder, Jay Avigdor, had worked in the merchant cash advance industry for several years and decided to strike out on his own.
Today, the company has more than 20 team members and has served more than 15,000 clients. According to the company’s website, it aims to merge finance with technology to provide funding to its clients more quickly.
Velocity Capital Group Reviews and Complaints
Velocity has generally positive reviews from its past borrowers. First, the company has an A+ rating from the BBB. It has only a handful of reviews across the BBB and Trustpilot, but those are overwhelmingly positive.
As for complaints, Velocity has just one with the BBB within the past year — three within the past three years — and none with the Consumer Financial Protection Bureau. This suggests that the majority of past borrowers are at least somewhat satisfied with their service.
Understanding How Velocity Capital Group Operates
Velocity Capital Group specializes in offering revenue-based financing in the form of merchant cash advances. A merchant cash advance is an advance on your company’s future receivables. This type of funding provides working capital to businesses. In exchange, the lender will withdraw frequent — often daily or weekly — payments directly from your bank account based on your credit card sales or other revenue.
Merchant cash advance fees typically come in the form of a factor rate, which is the percentage you’ll pay on the entire amount funded. It’s typically higher than the rates on traditional loans and is the same amount regardless of whether you pay off the loan early.
Like other small business lenders, Velocity has relatively lenient eligibility requirements for its merchant cash advances, including a credit score of at least 500, monthly revenue of at least $20,000, and at least three months of bank statements. Velocity also offers same-day funding.
Unfortunately, because of their high fees, short repayment terms, and lax requirements, merchant cash advances often result in business owners who can’t repay their debts. In that case, the MCA company may try various debt collection tactics, including lawsuits.
Dealing with Velocity Capital Group
If you’re a past or current Velocity Capital Group borrower, it’s important to understand what you should do if the company contacts you and what your rights are.
What Should I Do If I Receive a Letter or Call from Velocity Capital Group?
If Velocity Capital Group contacts you, first make sure the communication is actually coming from the company. Unfortunately, the merchant cash advance industry is a common target for scammers, and you want to make sure that’s not the case here.
Once you’ve confirmed the letter or phone call is legitimate, make sure you understand what they’re asking for. If they’re contacting you about a debt, you can ask the company to validate the debt in writing. You may also consider speaking with a merchant cash advance attorney.
Handling Communications from Velocity Capital Group
It’s important to document all of your communications with Velocity Capital Group. Keep copies of all letters and emails, and take thorough notes of all phone calls, documenting the time, date, nature of the call, and the name of the person you spoke with.
If Velocity ends up taking legal action against you due to your unpaid debts, you’ll want to have these records.
Knowing Your Rights Against Velocity Capital Group
Merchant cash advances aren’t regulated the same way as other forms of business loans, which can lead to some legal gray areas. However, you still have rights when dealing with Velocity as a business owner. Here are some basic rights to be aware of:
- Transparent terms: Velocity Capital Group is required to provide you with transparent loan terms and conditions, including your loan amount, repayment term, factor rate, and any other fees you could be responsible for.
- Fair treatment: Any lender you’re dealing with must treat you fairly. That means they can’t discriminate against you and can’t use deceptive or dishonest practices.
- Legal representation: You can hire an attorney to represent you with Velocity at any time, regardless of whether the company has sued you.
- Recourse: Velocity must promptly correct any errors in your account. And if the company treats you unfairly, you have the right to legal recourse.
The Legal Side of Velocity Capital Group
Common Legal Issues with Velocity Capital Group
Merchant cash advance agreements can result in legal issues, such as disputes over the terms of the financing, difficulty repaying the debt due to high fees, or unfair or aggressive collection practices.
The merchant cash advance industry isn’t as well-regulated as traditional business loans and credit card debt, which could make legal issues more frequent. If you run into issues with Velocity or any other merchant cash advance funder, consider speaking with an MCA debt relief attorney who is experienced in dealing with these types of agreements.
What Happens If You Get Sued by Velocity Capital Group
If you owe unpaid debt to Velocity Capital Group, the company may resort to a lawsuit to try to collect it. You’ll know you’re being sued because you’ll be served with a legal complaint and summons. Here’s how to proceed if that happens:
- Review the complaint: Before proceeding, thoroughly read the complaint to understand exactly what claims Velocity is making and what they’re seeking from the lawsuit.
- Seek legal advice: When dealing with the court system, you may feel more comfortable working with a merchant cash advance attorney experienced in these matters. Most offer free consultations to help you decide if legal representation is right for you.
- Respond to the complaint: You’ll be required to respond to the complaint within a certain number of days. Failing to respond could result in a default judgment against you.
- Discovery: Before trial, you and the lender will undergo the discovery process, during which you (or your lawyer on your behalf) will exchange relevant information and documents about the case.
- Negotiations and settlement: Before going to trial, you’ll have the opportunity to negotiate with Velocity to come to a settlement agreement. If you hire an attorney, they’ll negotiate on your behalf.
- Trial: If the negotiations aren’t successful, you’ll have to go to trial, where both you and the lender will present your arguments and, if relevant, counterclaims.
- Judgment: Once the trial is complete, the judge will issue a judgment. You may be ordered to pay your unpaid debts and could be subject to wage or bank account garnishment.
How to Negotiate with Velocity Capital Group
Check to Make Sure Velocity Capital Group Isn’t a Scam
As we mentioned, Velocity Capital Group is a legitimate company, but the merchant cash industry is a frequent target of scams. Therefore, it’s always important to make sure any letters or phone calls you receive actually come from Velocity and not from a bad actor impersonating the company.
To confirm whether a communication is really from Velocity, start by comparing the contact information in the letter or phone call to what’s on the company’s website. You can even call the company directly to make sure they’re the ones who contacted you. If you’re working with a merchant cash advance attorney, they can look into this on your behalf.
Strategies for Negotiating with Velocity Capital Group
Once you’ve verified you’re actually communicating with Velocity, it’s worth trying to negotiate with the company before taking the case to court. While you will likely still end up having to pay some of your unpaid debt, you could get away with paying less and could also avoid paying Velocity’s legal fees and other financial penalties.
When you begin your negotiations, start by thoroughly reviewing your merchant cash advance agreement, how much you still owe, and what Velocity is asking for. Once you know what Velocity is requesting, consider what your ideal scenario would be.
In many cases, you can negotiate your debt to a lower amount and pay it back in either a lump sum or installment payments. Keep in mind that you can likely negotiate a lower amount if you can pay it in one lump sum but either way they are likely to make you sign another agreement. This is where you should consider using an experienced MCA attorney who represents businesses in these matters to negotiate for you.
Finally, remain professional throughout the process and maintain copies of all communications, especially if you come to a settlement agreement. Don’t just agree because you feel pressure. If you’re working with a business debt attorney, they can maintain documentation and will ensure the negotiations work out in the best possible way.
How to Protect Against Velocity Capital Group
Steps to Take If You’re Contacted by Velocity Capital Group
As a quick recap, here are the first things you should do if Velocity Capital Group contacts you about an outstanding business debt:
- Verify the communication: If you receive a letter or phone call from Velocity, start by confirming it’s actually the lender contacting you.
- Ask the lender to validate the debt: Ask Velocity to validate your debt, which they should do in writing. Compare the information you receive to your own records.
- Consult an attorney: If you feel more comfortable having someone help you through this process, consider hiring a debt relief attorney.
- Decide on your next steps: Weigh your options and decide what to do next, whether it’s pay the debt, negotiate with the company, or go to court.
Filing a Complaint Against an MCA
If you feel like an MCA has violated your rights in any way, whether they’ve discriminated against you, been deceptive, or anything else, you can file a complaint against the company in a few different ways. Here’s where you can file complaints:
- Consumer Financial Protection Bureau (CFPB)
- Federal Trade Commission (FTC)
- State Attorney General
- Better Business Bureau (BBB)
Velocity Capital Group Contact Phone Number and Address
If you need to contact Velocity about your outstanding debt, here’s how to get a hold of them:
- Phone: 833-824-3863
- Email: info@velocitycg.com
- Address: Pearsall Ave, Cedarhurst, NY 11516
How Can an MCA Debt Settlement Attorney Help?
If you’re dealing with an outstanding debt to Velocity Capital Group, or any MCA you don’t have to go it alone. A debt relief attorney experienced in dealing with merchant cash advance lenders with Velocity and can advise you on your next steps and negotiate with the company on your behalf for a new agreement.
Tayne Law Group offers a free phone consultation with an experienced staff member which can include a well versed debt relief attorney. Whether you’ve already been sued or are simply worried about the best way to handle your debt, we may be able to help. Contact our offices today by calling (866) 890-7337 or filling out our short contact form. We never share or sell your information, and all conversations are confidential.
FAQs
What does Velocity Capital Group do?
Velocity Capital Group specializes in revenue-based financing, specifically merchant cash advances. In other words, it gives small businesses loans based on their future revenue rather than their creditworthiness.
Are merchant cash advances illegal?
No, merchant cash advances aren’t illegal. However, they aren’t regulated as heavily as traditional loans, meaning they may be riskier for borrowers.
What happens if you don’t pay a merchant cash advance?
If you don’t pay back a merchant cash advance, your credit could take a hit. Your lender may also try various debt collection practices, including letters and phone calls, sending your debt to collections, or even filing a lawsuit against you.
Can a merchant cash advance company sue you?
Yes, a merchant cash advance company can sue you if you don’t repay your debt. If your lender sues you, you’ll have the option to either take the case to court or negotiate a settlement ahead of time.
