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Rhode Island MCA Defense Lawyers Business Debt Relief

Running a small business is extremely difficult. Between managing employees, keeping customers happy, and trying to turn a profit, there’s always something to worry about. And if you take out loans or use alternative financing options like merchant cash advances (MCAs) to help cover costs, you add the stress of debt payments and worrying about getting into default.If your Rhode Island business has existing MCA debt or you’re considering an MCA, it’s important to understand these high-risk loans and your legal protections before signing anythingAt Delancey Street, our team of business debt relief experts and attorneys can provide customized debt restructuring plans to fit your unique situation. We‘re here to help you gain financial freedom and have a healthy relationship with money, not maximize profits through predatory loans.In this guide, we’ll cover:

  • What is an MCA?
  • Rhode Island MCA regulations
  • What makes MCAs risky?
  • Legal defenses against MCA lenders
  • The MCA debt relief process
  • How we can help

What is a Merchant Cash Advance?

A merchant cash advance (MCA) provides quick access to capital in exchange for a percentage of future sales. MCA lenders give you an upfront lump sum payment, then take a fixed daily amount from your credit card receipts until the balance plus fees is repaid.

  • MCAs are not small business loans. They function more like business cash advances or sales factoring arrangements.
  • Approval is based on credit card sales volume, not your credit score or business assets. This allows more high-risk borrowers to qualify.
  • Payments are taken automatically from credit card or debit card transactions as a fixed percentage every day. This continues until the MCA is fully paid off, which may take weeks or years.
  • MCAs feature very high interest rates, often over 100% APR when fees are included. This makes them a very expensive financing option.

Many small business owners turn to MCAs because they provide fast access to capital without requiring collateral or a strong credit history. However, the extremely high costs and risky terms often lead borrowers into even more financial distress.

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Rhode Island Merchant Cash Advance Regulations

Merchant cash advances are largely unregulated, allowing predatory lenders to take advantage of small business owners in need of quick financing. However, Rhode Island does have some consumer protections in place.Key Rhode Island laws governing MCAs include:

  • Rhode Island Fair Lending Act – Sets limits on interest rates and fees for loans under $25,000. MCAs may qualify depending on structure.
  • Rhode Island Deceptive Trade Practices Act – Prohibits unfair or deceptive lending acts like hiding terms in fine print. Businesses can sue violators.
  • Electronic Fund Transfer Act – Governs the process of withdrawing daily payments electronically. Non-compliance violates federal law.

While these regulations provide some guardrails on MCA practices, significant loopholes remain that allow excessively high costsOur team can analyze your MCA agreement for compliance issues and help explain your protections under Rhode Island law.

What Makes Merchant Cash Advances So Risky?

Merchant cash advances may seem like an easy short-term financing option, but they come with significant downsides for borrowers. Understanding these risks is key when evaluating alternatives.Here are some of the top reasons MCAs are considered predatory loans:

  • Deceptively High Costs – When all origination fees, interest charges, and processing costs are included, MCAs often carry over 100% APR. These excessive rates create debt traps.
  • Difficult Early Repayment – MCA agreements often include penalties for repaying too early. This makes it hard to refinance into more affordable financing.
  • Personal Liability – Business owners usually have to personally guarantee MCA loans. This puts your personal assets at risk if the business falters.
  • Daily Repayments – The fixed daily deduction structure leaves no flexibility. If sales drop, payments remain the same leading to defaults.
  • Obscure Legal Terms – Predatory MCA lenders hide key details in complex contracts that small business owners may not fully grasp.

While getting quick financing may seem tempting, the reality of MCA loans often leaves borrowers in an even more precarious financial position. Let our team of experts analyze your unique situation to find better solutions.

Legal Defenses Against MCA Lenders

If you feel trapped in an abusive MCA agreement, working with a lawyer to analyze the contract terms and build a legal defense is essential.Here are some potential defenses borrowers can use:

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Unfair Lending Violations

  • Excessive interest rates over legal limits
  • Deceptive practices like hiding true costs
  • Violating electronic withdrawal procedures

Unconscionable Agreement Terms

  • Unreasonably favorable terms to the lender
  • Confusing legalese hiding key details
  • Mismatched bargaining power between parties

Breach of Covenant of Good Faith

  • Structuring payments to trap borrowers in debt
  • Refusing to work with borrowers facing hardship
  • Interfering with sale of collateral to recover money

The success of any defense depends heavily on the specific loan terms and lender actionsOur legal team can review your MCA contract and build a customized case to fight back against predatory lenders and escape abusive loans.


The Merchant Cash Advance Debt Relief Process

If you used an MCA to keep your Rhode Island small business afloat and are now facing unmanageable debt payments, we can help. Delancey Street’s flexible debt relief programs work to reduce or eliminate balances through negotiation and debt restructuring.Our simple 3-step process looks like:

  1. Free Consultation – We offer a no obligation consultation to understand your unique situation, business needs, and the history with the MCA lender.
  2. In-Depth Case Analysis – Our team analyzes your loan documents to build a legal case for violations, unacceptable risks, and predatory actions by the lender. We also put together a full accounting of amounts owed.
  3. Debt Restructuring & Negotiation – Leveraging our case analysis, we negotiate directly with the MCA lender to have portions of the balance forgiven or develop customized repayment plans that meet your budget. We handle talks so you can focus on your business.

Throughout the process we make sure you understand next steps and have a say in all big decisions. We know having an expert guide you through the complex legal and financial intricacies is critical during this stressful period.If negotiations fail or the lender won’t cooperate, we can help you analyze various debt relief options including legal action. Our priority is structuring a reasonable path forward.

See also  Alaska MCA Defense Lawyers Business Debt Relief

Why Work With Delancey Street

At Delancey Street, our business debt relief experts have decades of experience helping small business owners escape predatory loans and resolve unmanageable debt. We’re passionate about creating financial freedom through education, debt restructuring, and legal action when necessary.Here’s what sets us apart:

  • Trusted Track Record – We’ve negotiated billions in small business debt relief and have an over 95% success rate. You can feel confident we can handle even the most complex case.
  • Full Service Support – From initial consultation through final negotiations, you’ll work with a dedicated case expert to customize the right debt relief solution.
  • Strict Confidentiality – We never share your information without explicit consent. You can be open with your full financial picture.
  • Complimentary Case Analysis – We provide a detailed breakdown of your situation including lender violations and repayment feasibility free-of-charge before moving forward.
  • Reasonable, Transparent Fees – There are no upfront costs or hidden charges. We only collect a fee if debt is successfully reduced or eliminated.

We know dealing with predatory MCA loans while trying to save a small business is overwhelming. Let our experts shoulder that burden while you focus on what matters most – your customers and community.

Contact Delancey Street Today

If you have questions about Rhode Island business debt relief options or want to discuss your unique situation, please reach out. Call 212-210-1851 or contact us online to set up a free consultation.Our team is ready to help you gain financial freedom from abusive MCA loans. You deserve affordable financing that helps rather than harms your business.







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"
$500,000 MCA Restructured Over 3 Years
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$250,000 SBA Loan Offer in Compromise
"Great choice for business owners who need a trustworthy partner"
$350,000 MCA Restructured Over 2 Years

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