script type="application/ld+json"> { "@context": "http://schema.org", "@type": "Product", "name": "Delancey Street", "aggregateRating": { "@type": "AggregateRating", "ratingValue": "5", "reviewCount": "10" } } Dallas Merchant Cash Advance Debt Relief Lawyers | Delancey Street

Looking for business debt relief services? Visit Delancey Street.

Merchant Cash Advance Business Debt Relief

Merchant cash advances (MCAs) can provide quick access to capital for small businesses, but they also come with high costs and risks. If your business has struggled to repay an MCA, you may be facing aggressive collection tactics or threats of legal action. However, there are options to resolve MCA debt and achieve relief.

How Merchant Cash Advances Work

A merchant cash advance provides a business with a lump sum of capital in exchange for a percentage of future credit card sales over a set period of time. This differs from a traditional small business loan in a few key ways:

  • There is no set repayment schedule. The business repays the advance as a percentage of daily credit card sales.
  • Approval is based mainly on credit card sales volume, not the business’s credit score. This allows more high-risk businesses to qualify.
  • The annual percentage rate is often between 60-200% since there is more risk to the lender.

This structure allows businesses with lower credit or inconsistent cash flow to access capital quickly. However, it also means significantly higher borrowing costs long-term.

The Risks of Merchant Cash Advances

While MCAs provide fast access to capital, they pose several downside risks:

  • High costs – The equivalent annual interest rate is exorbitantly high, often exceeding 100%.
  • Daily repayments – Repayments are taken automatically from credit card sales each day. This can make cash flow management difficult.
  • Aggressive collections – Some MCA lenders use aggressive tactics like harassing phone calls and lawsuits to collect debts.
  • Personal liability – Business owners often have to personally guarantee MCA loans, exposing personal assets.
See also  How to Negotiate a Release of a UCC Lien in Merchant Cash Advance

As a result, many businesses struggle under the weight of MCA debts. The Covid-19 pandemic further exacerbated these issues for small businesses as revenues declined.

Achieving MCA Debt Relief

If your business is facing financial distress due to an MCA, there are options to resolve the situation and achieve relief:

Debt Settlement

Debt settlement involves negotiating directly with MCA lenders to settle outstanding balances for less than the full amount owed. This can eliminate a significant portion of the debt. Key steps include:

  • Stop making payments – This gives you leverage in settlement negotiations. However, be prepared for aggressive collections.
  • Gather documentation – Compile financial statements, tax returns, bank statements, and anything related to the MCA agreements.
  • Negotiate – With documentation in hand, negotiate a lump sum settlement that is acceptable to both parties. Often, 40-60% settlements are achievable.
  • Get settlement terms in writing – Once an agreement is reached, get the detailed terms in writing before sending payment. This protects against further collections.

Settlements allow businesses to resolve MCA debts while avoiding bankruptcy. Lenders are often open to settlements since they carry such high risk.

Legal Defenses

In some cases, legal defenses can eliminate or reduce MCA debts:

  • Unconscionability – If the original MCA contract terms were overwhelmingly unfair or coercive, courts may void the agreement.
  • Usury violations – If the equivalent interest rate exceeded state usury laws, the debt may be reduced or voided.
  • RICO claims – Under the Racketeer Influenced and Corrupt Organizations Act (RICO), predatory lending can potentially lead to treble damages awards.
See also  Baltimore Business Debt Settlement Lawyers

Pursuing legal defenses against MCA lenders carries risks. Lawsuits are expensive and time-consuming. However, the right legal strategy can lead to full debt elimination under certain circumstances.

Bankruptcy

Filing business bankruptcy stops collections and provides an opportunity to eliminate or restructure debts under court protection. Options include:

  • Chapter 7 liquidation – The business stops operating and assets are sold to pay creditors. This fully eliminates qualifying business debts, providing a “fresh start.”
  • Chapter 11 reorganization – The business continues operating under court supervision and submits a repayment plan to creditors, allowing debts to be restructured.
  • Assignment for the benefit of creditors – This is an out-of-court liquidation overseen by a third-party trustee to settle debts.

The complex nature of MCA loans can make them difficult to address even in bankruptcy. Legal guidance is highly advisable before pursuing bankruptcy.

Finding the Right Debt Relief Partner

Navigating MCA debt relief is challenging. The optimal solution depends on your specific situation. At Delancey Street, our dedicated advisors help small business owners explore all debt relief options, including:

  • Free consultations – We conduct in-depth reviews of your finances to provide tailored advice.
  • Debt relief program enrollment – We help negotiate settlements, pursue legal strategies, and facilitate bankruptcy filings.
  • Ongoing support – Our advisors defend you from collections calls and guide you through every step of the process.

Don’t struggle with MCA debts alone. The experienced team at Delancey Street helps business owners achieve financial freedom through customized debt relief. Contact us for a free consultation.

Frequently Asked Questions

How long does the debt settlement process take?

The timeline varies, but often debt settlement is achievable within 2-6 months. We prioritize speedy resolutions, but negotiations require patience and persistence.

See also  NYC MCA Lawyers - NYC Business Debt Settlement Lawyers

Can a business owner’s personal assets be at risk?

If you personally guaranteed the MCA loan, then yes. Lenders can pursue personal assets like home equity if the business defaults. That is why resolving these debts is so critical.

Is debt settlement my only option?

No. We also help businesses file bankruptcy or build legal defenses when appropriate. There is no one-size-fits-all approach – we customize solutions to your situation.

What documentation is needed?

We need a clear financial picture of your business, including tax returns, profit/loss statements, personal and business bank statements, and the original MCA agreement terms.

About Delancey Street

Delancey Street has provided small business debt relief for over 10 years. We are not a law firm, but rather financial advocates guiding you through debt settlement, legal strategies, and bankruptcy.Our mission is empowering small business owners to resolve financial crises, defend their assets, and ultimately achieve financial freedom from debts owed. We offer judgment-free consultations, thoughtful advice, and long-term guidance because we understand the heavy burden of small business debt.If an MCA or other debts are threatening your livelihood, contact us today to explore your relief options. Our expertise allows business owners to exit distress and continue pursuing their dreams.

 

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

"Super fast, and super courteous, Delancey Street is amazing"
Leo
$500,000 MCA Restructured Over 3 Years
"Thanks for helping me in literally 24 hours"
Jason
$250,000 SBA Loan Offer in Compromise
"Great choice for business owners who need a trustworthy partner"
Mary
$350,000 MCA Restructured Over 2 Years

In The Media

Delancey Street CEO discusses ways to reward employees
Delancey Street CEO discusses the benefits of franchising on Forbes.
Delancey Street CEO discusses management on AMEX.
Beat Ctc Debt Collector

  Crush That CTC Debt Collector: A Merciless Gameplan They’re…

Is Pacific Debt Relief a reputable debt relief company?

  Is Pacific Debt Relief a Reputable Debt Relief Company?…

How is it possible for a bad credit to be fixed?

  Climbing Out of the Bad Credit Hole Sick of…

What is the effect of an AR factor on cash flow?

  The Brutal Truth: How AR Eats Into Your Cash…

What are the best credit card debt relief options?

  Crushing Credit Card Debt? Explore These Relief Pathways If…

Delancey Street simply gets it. You're talking to experts.
Steven Norris
Get Help Today

Ready To Get Started?

If you have questions, feel free to shoot us an email, or fill out our live chat.

Schedule Consultation