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Long Beach MCA Defense Lawyers Business Debt Relief

If you run a small business in Long Beach and have merchant cash advance (MCA) debt, you may be struggling under the weight of high payments and fees. MCA loans can seem like an easy financing option at first, but the reality is they often trap business owners in an endless cycle of debt.The good news is there are experienced attorneys who specialize in MCA defense that may be able to help. At our firm, we have a team of lawyers dedicated to assisting Long Beach business owners find solutions for their MCA debt, including:

• Negotiating settlements
• Structuring payment plans
• Asserting defenses to avoid repayment
• Challenging predatory lending practices

How MCA Loans Work

Merchant cash advances provide businesses with quick access to capital based on a percentage of future credit card sales. The catch is that the payback amount often ends up being exorbitantly high after all the fees, rates, and compounding interest.Here’s a quick rundown of how MCA loans typically work:

• Fast approval with limited eligibility requirements
• Lump sum of capital upfront
• Fixed daily or weekly payments taken automatically from credit card sales
• Payments based on percentage of sales ranging from 10-20%
• Loans paid back in 6-18 months until amount satisfied

While this structure seems straightforward at first, two key factors often cause the actual repayment costs to balloon out of control:

• No limit on total payback amount
• Extremely high effective APRs exceeding 100%+

So while a business may take out a $50,000 MCA loan, they could end up paying back over $100,000 after just a year or two.

Why MCA Loans Are Risky

Merchant cash advances appeal to small business owners because they require little paperwork and provide quick access to capital. However, there are several hidden risks of MCA loans to be aware of:

Limited RecourseMCA loans are treated as business sales transactions, not loans. This means they are not subject to usury laws limiting interest rates. MCA providers can essentially charge whatever rates and fees they want.

Aggressive CollectionsWhen businesses struggle to keep up with payments, MCA providers can resort to aggressive collections tactics like accessing business bank accounts directly to withdraw owed amounts.

No Consideration of Total Debt ObligationsMCA lenders typically do not consider a business’ total debt picture when approving loans. This pushes businesses deeper into debt when they cannot afford more financing.

Overreliance on Sales ProjectionsApproval and payment amounts depend heavily on a business’ past sales and projections. Inaccuracies or fluctuations can leave businesses owing more than they can afford.

Legal Defenses Against MCA Loans

If you have MCA debt that feels crushing for your Long Beach business, there may still be hope. Our legal team can explore defenses to either lower the amount owed or avoid repayment altogether. Potential defenses include:

• Unconscionability – Argue the terms of the MCA agreement are unjust, unfair, and exploitatively one-sided.

• Fraud – Prove the lender misrepresented terms, approval criteria, repayment structure or other key factors.

• Breach of Covenant of Good Faith – Allege the lender violated responsible lending practices, standards, and regulations.
• Usury Violations – Challenge violations of state laws regarding excessively high interest rates and fees.

• RICO Violations – File claims under the Racketeer Influenced and Corrupt Organizations Act due to predatory lending practices.

Negotiating MCA Debt Settlements

Even without a clear legal defense, it may be possible to settle your MCA debt for less than you owe. Our lawyers have negotiated settlements reducing debts by 25 to 50% for dozens of California business owners.We take an aggressive approach in MCA settlement negotiations, presenting detailed documentation of predatory lending practices. Very often MCA lenders would rather settle for a lower amount than risk the time and legal fees of going to court.

Structuring Affordable MCA Payment Plans

If settlement or legal defenses do not fully resolve your MCA debt issues, developing an affordable payment plan is another option. We can advocate for your business to:

• Get reasonable fixed monthly payments instead of variable daily payments
• Lower the percentage taken from daily credit card sales
• Extend the payback period beyond the original term
• Avoid further fees, charges or penalties

The goal is structuring payments that avoid putting you out of business so you can pay back the principal over time.

Why Work With MCA Defense Attorneys

Navigating MCA debt relief on your own is an uphill battle. MCA lenders have teams of lawyers well-versed in structuring agreements that maximize their profits.Partnering with experienced legal counsel levels the playing field and gives your Long Beach business the best chance at an optimal outcome. Our MCA defense lawyers offer:

• Specialized Experience – We focus specifically on MCA lending abuses and defense.
• Negotiation Leverage – We’ve developed proven strategies to apply pressure for better settlements.
• Cost Savings – We make the process more time and cost efficient compared to going it alone.
• Peace of Mind – We handle all direct communication and complex legal issues for you.

Contact Our Long Beach MCA Defense Team

If you have questions or would like to discuss MCA debt relief options for your Long Beach business, reach out for a free consultation. Call us at 212-210-1851 or contact us through our website at www.delanceystreet.com.Our team understands the immense stress MCA debt causes business owners. We’re here to listen to your situation, answer your questions, and help you find a path forward. With customized, aggressive representation – we can give your business the lifeline it needs to survive and thrive again.

Frequently Asked Questions

What are the first steps if I want to settle my MCA debt? The first step is requesting a free consultation with our legal team. We’ll review your MCA agreements, debts owed, business finances and operations. From there we’ll assess possible negotiation and settlement strategies and discuss legal options.

What documents do you need to review my MCA debt situation? Please have available copies of all of your MCA contracts, statements, and other correspondence with lenders. We’ll also need an overview of your business finances and recent bank statements. This allows us to gain a full picture before determining the best course of action.

Can filing bankruptcy help my business with MCA debt? Filing business bankruptcy can sometimes help with overwhelming MCA debt. However bankruptcy has major consequences that can severely damage a business’ future prospects. We have other alternatives that usually provide debt relief without needing to pursue bankruptcy.

What are the risks of stopping payments on my MCA debt? Unilaterally stopping payments on MCA debt is not recommended. MCA lenders can retaliate aggressively by seizing business assets and bank accounts. However, we may recommend temporarily stopping payments as a negotiation tactic if appropriate protections are in place.

How long does the MCA debt relief process take with legal help? Every situation is different, but with experienced counsel – most businesses see significant progress or resolution of their MCA debt within 6-12 months. The timeframe depends on the cooperation of the lenders and complexity of your case. We develop customized action plans with specific time estimates during your free consultation.