California Merchant Cash Advance Attorney

What Is a Merchant Cash Advance?

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.

Legality of Merchant Cash Advances in California

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.

California’s SB 1235 Disclosure Requirements

Under California 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.

5 Ways MCA Attorneys Help Your California Business

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:

1. Review contracts

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.

2. Negotiate MCA terms on your behalf

A merchant cash advance business debt attorney negotiates a restructure directly with the MCA provider to protect your business’s interests, and facilitate disputes.

3. Advocate for your business’ rights

They flag non-compliant practices performed by the provider, and seek redress in support of your business.

4. Education and counseling

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.

5. Defend your business in court

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.

Top Signs You Might Need a California MCA Attorney

There are a handful of tell-tale signs that you might benefit from the guidance of a merchant cash advance debt help attorney:

• You signed a COJ upon accepting the MCA.
• Your business is having trouble keeping up with payments.
• You’ve missed multiple MCA payment dates and need to renegotiate.
• You have debt collectors from the MCA demanding payment.
• You’ve received notice that the provider filed a UCC lien against your business.
• The MCA is contacting your clients and threatening you.

If one or more of these statements hits home, hiring a merchant cash advance attorney might offer the clarity and relief you need.

Why Choose Tayne Law Group for California MCA Debt Relief

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 MCAs. 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.