Boost your cash flow, safeguard your assets, and secure your business future
If you’re a small business owner in Georgia, you’ve probably explored many different financing options. One increasingly popular source of financing you may have come across is a merchant cash advance (MCA).
This is a common source of financing among Georgia small business owners. An MCA can provide funds fast without a traditional credit check. And the funds can be used for just about anything, from buying equipment to covering payroll to filling the gap when cash flow gets tight.
The downside is that these seemingly attractive sources of money often come back to bite Georgia business owners. High fees, a short repayment timeline, and frequent withdrawals from your receivables mean an MCA can place even more strain on your business. It’s not uncommon for Georgia business owners to find themselves behind on payments and even face a breach of contract, which can result in legal repercussions such as being sued.
If that’s the case, working with an experienced attorney who understands how to handle Georgia merchant cash advance attorney-related matters is important. An attorney can help you navigate the world of merchant cash advance contracts, defaults, and UCC liens. They can help you resolve any issues you’re facing with MCA debt located in Georgia.
A merchant cash advance is a form of alternative financing for businesses targeted toward small to mid-sized companies that regularly conduct a significant volume of credit card transactions.
Instead of receiving a fixed loan amount and repaying it over time with interest, businesses receive an advance against their future credit card sales. That means that MCAs are not loans but advances on future receivables. So, they’re not subject to the same laws that govern traditional business loans or consumer debt.
An MCA provider or purchaser will give a business an upfront sum of money in exchange for a percentage of the business’s future credit card sales or receivables. The agreed-upon percentage (known as the holdback rate) is automatically deducted from the business’s daily or weekly sales until the advance, plus a fee, is paid back in full.
This fee, also known as the factor rate, is predetermined and effectively represents the cost of the advance. It’s not an interest rate but rather a flat fee that gets added to the borrowed amount. For example, if a business receives a $10,000 advance with a factor rate of 1.3, the business will have to repay $13,000 (the $10,000 advance plus a $3,000 fee).
The repayment period for MCAs is not fixed like that of traditional loans. Instead, the duration of the repayment period depends on the volume of the business’s credit card transactions and other income. If business is booming, the advance might be paid back sooner. On the other hand, if sales slow down, it might take longer to repay the advance. It could also cause challenges when meeting your day-to-day expenses since the MCA is paid first. Usually, however, MCAs must be repaid within a short period — anywhere from a few months to a couple of years.
An MCA may require fixed weekly payments instead, based on the business’s estimated monthly revenue. This is more common for businesses with few debit or credit card sales.
Yes, merchant cash advances are legal in Georgia. There currently aren’t any laws that render a merchant cash advance contract illegal in the state. Merchant cash advances are a form of alternative financing for businesses, and in Georgia, they are not considered loans.
It’s important to note that a common clause in MCA contracts known as a Confession of Judgment (COJ) has been outlawed in some states. But COJs are still legal in Georgia. This allows a merchant cash advance provider to obtain a judgment against you if you breach your contract without ever notifying you of a lawsuit or allowing you to defend yourself in court. When a default judgment is obtained, the creditor can take additional measures to collect your debt, such as seizing assets or freezing your bank account.
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Georgia’s usury laws prevent lenders from charging excessively high interest rates. However, although merchant cash advances seem like loans, they technically are not. This is a loophole that MCA providers use to get around usury laws and charge as much as they want.
Some states have been instituting new MCA regulations to prevent predatory lending. Georgia, however, is not currently one of them. Interestingly, Georgia has laws to protect consumers from predatory lending, such as payday loans. The same is not true for businesses, though, and there are no specific regulations surrounding MCAs in Georgia.
If you are struggling with MCA payments or have defaulted on the advance, it’s a good idea to enlist the help of an experienced MCA attorney. Here are a few signs you need MCA legal help:
Tayne Law Group is based in New York. But don’t worry: We assist clients from all over the country and even the globe with their debt matters. So, if you’re based in Georgia and struggling with merchant cash advance debt, we may be able to assist.
As a law firm, you can trust our process for resolving MCA debt matters and know that everything about the process is transparent and straightforward. Our team is made up of experienced attorneys who resolve MCA debt every day. Our team will work with you to come up with a customized approach to eliminating your merchant cash advance debt (we can help with other types of business debt, too). The goal is to protect your business cash flow and operations while working out a resolution with the MCA collection agency.
Our law firm is accredited by the Better Business Bureau and has a rating of A+. We also earned the ‘Best Debt Consolidation Service’ for ten years running, and our team has won many awards and accolades in the legal debt resolution arena.
Facing steep MCA payments or even a lawsuit from an MCA provider can be stressful. The good news is that as a Tayne Law Group client, you’ll have a strong team to support you and help you navigate MCA debt resolution. We are a trusted source of MCA legal help and employ a strong team of debt relief attorneys and support staff who know debt and how to resolve it. We’ll help you get your business and finances back on track.
Call us for a free phone consultation at 866-890-7337 or fill out our short contact form. All conversations are confidential; we will never share or sell your information.
Before you pay anything, we spend some time discussing your situation. We’ll ask some questions to learn more about you, your business, and your debt goals. You’ll also have the opportunity to ask us questions, whether you want to know more about our firm, how billing works, etc. We can take this time to review potential options and explain our no-billing policy.
Once you have a better understanding of our services and how we can help, the next steps are super simple to get started.
Once you’re a client, you can breathe easy knowing you don’t have to field any more calls, texts, or emails from MCA providers or debt collectors — we take it from here. Our team will contact your creditors and let them know that we’re prepared to resolve your debt on your behalf. Our debt relief attorneys are skilled negotiators and have established relationships with many creditors and their legal teams. All work is done in-office; we never outsource client work to third parties.
As we work toward resolving your MCA debt, we’ll update you regularly and keep you posted on our progress. We have an open door policy, so you can call any time and speak to the same people as our team is well established.
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.
It depends on if you can pay it off or not. It is definitely a risk.
When you are having trouble with business finances, limited resources, and credit, you may feel that a merchant cash advance or another business loan may be your only option to cover your business expenses.
Many people think they’ll pay off the loan with their next job or sale, but that’s not always a reliable solution. If that money doesn’t come in, you could end up doing more harm than good. MCAs often have very high interest rates, making them harder to pay off.
People who struggle with repayment or default on merchant cash advances could face lawsuits, judgments, UCC liens, frozen bank accounts, or other extreme actions taken by a creditor in these kinds of lending practices.
When you seek business MCA debt relief with Tayne Law Group, know that you have a team of experienced professionals ready to assist and work with you to get you through the process of resolving these kinds of matters. MCA and other cash advance inventory purchases can end up strangling your business, especially if it’s out of control.
“Defaulting” means you haven’t made payments over an extended period of time. If you default on a merchant cash advance, it can be extremely damaging to your business. Defaulting on a loan could result in lawsuits, judgments, and liens from the lender and negative credit reporting to both business credit bureaus and consumer credit bureaus like Experian, Transunion, and Equifax. Unfortunately, this could put you out of business.
If you’ve defaulted or are struggling to make payments, our staff and attorneys are prepared to help you understand how to find relief from your merchant cash advance debts. Your first consultation is free, so we recommend calling us to learn how we could make a difference in your business.
Debt settlement involves negotiating to pay less than what you owe. In many cases, debt collectors are willing to do this because the collection process can be expensive, especially if they resort to suing you. Contact us to discuss options for settling MCA debt.
It’s never too early or too late to call. For many clients, the scariest part is not knowing what’s going to happen. In our free consultation, we’ll discuss your situation, and explain what you can expect, not only from your creditor during this time but also in our debt relief process. Once you’re a client, our staff and debt relief attorneys will create a strategy for how we can help you free up your cash flow and resolve your debt. Call us today at (866) 890-7337 or schedule your free consultation to learn more.
We work with several business creditors and lenders to resolve debt. Here’s a list of some of the more known creditors we work with:
Call to find out if we work with your creditor, (866) 890-7337.
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