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Merchant Cash Advance Relief: Navigating The Minefield

You’re an entrepreneur – a risk-taker, always hustling to find financial solutions to keep your business thriving. But, what happens when that merchant cash advance, which promised capital now, starts weighing you down? With high fees and short repayment periods, these agreements can quickly become millstones – dragging you into murky debt depths.

Don’t worry, we’re throwing you a life preserver: this guide navigates the uncharted waters of merchant cash advance relief. We’ll lay out all your options, because every business deserves a fighting chance.

Threats from the Deep: Understanding Merchant Cash Advance Risks

Unlike traditional loans with fixed payments, merchant cash advances grant a lump sum upfront, with repayments drawn from your daily credit card receipts. Sounds convenient, right? But lurking beneath are hidden dangers:

  • Confiscatory Repayment Rates: Repayment amounts fluctuate drastically based on sales performance. In slow periods, they can swallow most of your revenues.
  • Renewals Trap: As you struggle to repay with interest rates reaching triple digits, the allure of renewal offers pull you deeper into debt.
  • Default Dangers: Defaulting can expose you to severe consequences like personal asset seizures, frozen accounts, and bankruptcy.

Don’t drown in regret. Let’s explore escape routes customized to your circumstances.

Bailout Buoy #1: Restructuring/Repayment Plans

Before the ship sinks, try negotiating directly with your merchant cash advance provider. Restructured terms could get you:

  • Lower repayment amounts to align with revenue fluctuations
  • Extended repayment periods for breathing room
  • Repayment holidays during cash crunches

While unlikely to offer full debt forgiveness, a willing provider may throw a line – if, you explain your hardship convincingly.

See also  Massachusetts Business Debt Settlement Lawyers

When to Consider:

– Your business remains viable long-term
– Cash flow issues are temporary blips
– You haven’t defaulted or face litigation

Bailout Buoy #2: Debt Settlement

If restructuring fails and default looms, it may be time to negotiate a lump sum settlement. Translation? You pay a reduced amount to satisfy outstanding obligations.

Here’s the hook: MCA providers often sell distressed accounts to third-party debt buyers for pennies. So, they could accept 25-50% of your balance, still banking profit on a “loss.”

When to Pursue:

– Your business has hit dire straits
– MCA loans are non-compliant or legally dubious
– Defaulting would trigger disastrous consequences

Caveat:

Debt settlement shows up on credit reports as “settled for less than full balance” – potentially impacting future loan approvals.

Bailout Buoy #3: Legal Recourse

When MCAs turn truly predatory or fraudulent, the legal system offers a buoy. Two potential courses:

1) MCA Company Lawsuit: File suit alleging violations like usury, deceptive practices, improper licensing, etc.

2) Bankruptcy: If debt has become unsustainable, bankruptcy may allow elimination/restructuring of merchant cash advance contracts.

When Viable:

– MCA company acted illegally, unethically, or withheld material info
– You have a well-documented paper trail
– Debt is insurmountable, even with workouts

Summary: Charting Your Exit Course

As the merchant cash advance whirlpool exerts its downward pull, decisive and knowledge action offers a lifeline. Options exist – from restructuring existing contracts to battling legally dubious practices.

Every scenario is unique, so consult qualified professionals, scrutinize all avenues, and pick the exit ramp best-suited for your business journey. Keep rowing, captain – calmer financial waters can be ahead.

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

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