Looking for business debt relief services? Visit Delancey Street.
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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. It is not technically a loan, so MCA companies can bypass state lending laws and charge higher fees.Here’s a quick rundown of how merchant cash advances work:
- You receive an upfront sum of cash, usually between $5,000 – $500,000
- The MCA company takes a fixed percentage of your daily credit card sales – typically 8-20%
- You make payments until you pay back the advance plus fees, which often equates to an APR between 60-400%
This structure allows fast funding but can become problematic if sales drop. You still owe the fixed daily amount regardless of actual sales volume. Delinquency triggers aggressive collections.
The Risks and Realities of MCA Debt
While merchant cash advances provide easy money up front, they come with major downsides for small business owners.
- Extremely high cost – MCA fees often equate to 60-400% APR when calculated as interest
- Daily payments – You owe a fixed amount every day regardless of actual sales
- Aggressive collections – MCAs bypass lending laws, so collectors can legally threaten lawsuits, bank levies, etc.
- Accelerated payback – If you fall behind, many MCA contracts have “acceleration” clauses that demand full repayment of the outstanding balance
These realities can leave businesses facing five or six-figure debts with aggressive collectors demanding immediate payment under threat of legal action.
Finding MCA Debt Relief
If your business is struggling under the weight of merchant cash advance debts, know that you have options to resolve this situation. The first step is conducting a full financial analysis to determine the exact debts owed and expected future cash flows.An advisor can then explore debt relief options such as:
- Renegotiating MCA agreements – We can negotiate reduced payback amounts and more affordable payment plans. Many MCA creditors will make concessions to avoid default.
- Debt consolidation – Combining multiple MCA debts into a single loan allows you to pay via affordable monthly payments.
- Legal defenses – There may be grounds to invalidate questionable MCA agreements and stop collections activities under state laws.
- Debt settlement – We negotiate lump-sum settlements to eliminate MCA debts for 30-50% of the outstanding balance.
- Bankruptcy – Filing Chapter 7 or Chapter 11 can discharge unsecured debts like MCAs and stop collections.
The best approach depends on your specific situation. An experienced advisor can objectively assess all options and negotiate the optimal solution.
Why Businesses Choose Us for MCA Debt Relief
Delancey Street has spent over a decade assisting small business owners struggling with overwhelming MCA debt. We are not a law firm, but we do provide financial consulting combined with legal support.Here is what sets us apart in guiding businesses to MCA debt relief:
- Free Consultation – We will conduct an in-depth review of your business finances to gain clarity on the full scope of debts owed. This allows us to provide specific advice tailored to your unique situation.
- Objective Guidance – Since we are not a collection agency or tied to the MCA industry, we objectively examine all debt relief options to find the optimal resolution for your business.
- Proven Results – Our track record includes negotiating over $100 million in small business debt relief and crafting customized solutions for hundreds of companies.
- Ongoing Support – Even after resolving your current debts, we provide guidance to improve cash flow management and prevent any recurrence of overwhelming debt.
If your business is struggling under high-cost merchant cash advances, the first step is to schedule a free consultation with our team. We will perform an in-depth analysis and provide expert perspective on all options to resolve your situation.
Common Questions About MCA Debt Relief
Business owners struggling with merchant cash advance debts often have questions about the debt relief process and their options. Here we answer some of the most common MCA-related questions:
Can I realistically negotiate down or settle my MCA debt?
- Yes, most MCA creditors will negotiate discounts or lump-sum settlements to avoid default or having to pursue legal action against your business. We have negotiated reductions from 30-50% off for many clients.
What if I have multiple MCA debts I can’t afford to pay back?
- If you have multiple merchant cash advances, the best approach is typically consolidating everything into a single loan with affordable monthly payments. We can negotiate this for you.
Are there any legal defenses to just void or invalidate my MCA agreement?
- Possibly. If the MCA contract violates state laws or contains questionable clauses, we may be able to file complaints or lawsuits to void the agreement and halt collections.
Can I make MCA debts just go away through bankruptcy?
- Yes, filing Chapter 7 or Chapter 11 bankruptcy provides the option to discharge unsecured debts like merchant cash advances. This eliminates the debts entirely without having to repay them.
How long does it take to resolve my MCA debts through your program?
- Every situation is unique, but generally we can negotiate reduced payoffs or new payment plans within 30-60 days. Settlements or consolidation may take 60-90 days. Bankruptcy filing provides immediate protection while the case processes.
The Debt Relief Process Step-By-Step
If you are looking to resolve overwhelming merchant cash advance debts, here is a step-by-step overview of what you can expect when working with our advisors at Delancey Street:
Step 1: Free Consultation
- We thoroughly review your business finances, debts owed, cash flow, and financial goals
- This allows us to provide transparent advice tailored to your unique situation
Step 2: Strategic Planning
- We objectively assess all debt relief options – negotiation, consolidation, legal defenses, settlement, bankruptcy
- We develop a strategic plan to resolve your situation based on a cost-benefit analysis
Step 3: Implementation
- We directly execute the step-by-step tactics needed to enact your relief plan
- This may include negotiating with creditors, filing complaints/lawsuits, preparing settlement offers, etc.
Step 4: Resolution & Rebuilding
- We persist until all debts are resolved with mutually agreeable outcomes
- We provide ongoing advice to prevent any recurrence of cash flow issues or overwhelming debt
While every small business situation is unique, this is generally what you can count on when you choose to have Delancey Street assist with your merchant cash advance debt relief. We handle everything from start to finish so you can get out from under the weight of MCA debts and look towards the future.
Our Mission Goes Beyond Debt Relief
Delancey Street provides more than just debt restructuring, consolidation, and relief services for small businesses. We take a holistic approach focused on both resolving immediate cash flow challenges and setting up long-term financial health.In addition to negotiating, settling, or restructuring your current merchant cash advance debts, we also offer:
Ongoing Cash Flow Consulting – We provide guidance on optimizing your financial operations for stability and growth. This allows you to stop revenue crises before they occur.
Working Capital Assistance – Once debts are resolved, we assist with obtaining affordable working capital financing so you can rebuild operational capacity.
Credit Remediation – We dispute negative reporting and implement processes to improve business credit scores damaged by collections.
Tax Debt Resolution – If back taxes are also an issue, we connect you with specialized tax attorneys to negotiate relief.Our mission is to help you put the financial weight of overwhelming debt behind your business so you can get back to growth and profitability. We offer ongoing support to ensure your company remains on firm financial footing well into the future.
Contact Us for a Free Merchant Cash Advance Debt Analysis
If you are seeking relief from overwhelming MCA debts that feel impossible to repay, schedule a free consultation today. Our team has the experience to guide you through this challenging situation and get your business back on track.
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