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MCA Business Debt Settlement Help

Merchant cash advance (MCA) loans can provide quick access to capital for small businesses. However, the high costs and aggressive collection tactics often associated with MCA loans can leave business owners feeling trapped under a mountain of debt. If you took out an MCA loan for your business and are now struggling to make the expensive daily or weekly payments, debt settlement may be an option to resolve what you owe at a fraction of the balance.

How Merchant Cash Advances Work

A merchant cash advance provides an upfront lump sum of capital in exchange for a percentage of future credit card sales. Typically, an MCA provider advances $5,000 to $500,000 based on a business‘s average monthly card revenue.

  • The business then repays the advance, plus a fee ranging from 1.10 to 1.50 times the amount advanced, by allowing the MCA company to withdraw a fixed percentage of daily or weekly credit card receipts.
  • Payback periods usually run 6 to 18 months. Actual annual percentage rates on MCA loans often exceed 100% when all costs are factored in.

The Problem with Merchant Cash Advance Loans

While fast and readily available, MCA loans carry several inherent risks:

  • High costs – The fees, rates, and repayment structure cause total repayment costs to quickly multiply the amount borrowed. It’s easy to end up paying back two to three times more than what was advanced.
  • Daily/weekly payments – MCA providers can access your credit card settlement accounts to withdraw payments multiple times per week. These constant payments drain cash flow and make it hard to budget. Just one week of lower credit card revenue can put you behind.
  • Aggressive collections – MCA lenders can freeze settlement accounts, sue business owners, and engage in aggressive tactics like threatening to contact customers or vendors about debts owed if you fall behind on payments.
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As a result of these issues, many businesses seeking quick financing from an MCA provider end up regretting the decision as payments overwhelm cash flow.

Seeking Relief Through MCA Debt Settlement

If you face excessive MCA loan payments your business can no longer afford, debt settlement may help you resolve balances for less than you owe. Using legal provisions that protect business owners, we can negotiate deals with MCA lenders to settle outstanding balances.Debt settlement provides multiple important benefits:

  • Get accounts settled for less than you owe – We leverage your legal rights to negotiate discounts of 25% to 75% off MCA loan balances.
  • Affordable monthly payments – We work out reasonable monthly payment plans aligned with your budget so payments no longer overwhelm cash flow.
  • Protect your business – Legally stop collections activities while we negotiate debt relief. We also help craft responses to legal complaints filed over MCA debts.
  • Avoid bankruptcy – Debt settlement allows you to resolve what you owe without the high costs and business disruption of bankruptcy court proceedings.

If you face collections over an unaffordable MCA loan, contact our law firm today to discuss your rights and options. We offer a free consultation, with no obligation, to review your situation and provide expert advice on finding the best path forward.

The Debt Settlement Process for MCA Loans

If you hire us to negotiate your MCA debt relief, here is how we handle these complex settlement situations:

1. Stop Collections Activities

  • Immediately upon engagement, we send notices informing MCA providers they must now communicate directly with our law firm regarding debts owed.
  • These notices legally require them to stop collections calls, account withdrawals, credit reporting, and lawsuits so we can negotiate without duress.

2. Review Loan Agreements & Statements

  • You provide us with copies of all MCA contracts and recent account statements detailing transactions, fees paid, and amount claimed as still owed.
  • We thoroughly review these agreements to identify potential violations and flaws. Most MCA contracts lack required disclosures and have other weaknesses we can leverage in negotiations.
See also  10 Questions to Ask Business Debt Settlement Companies

3. Negotiate with MCA Provider

  • With all information in hand, we contact MCA providers to formally dispute debts claimed as owed. In most cases, we identify contractual, legal, or ethical weaknesses that enable us to successfully argue balances should be reduced by 25% to 75%.
  • Negotiations often require an exchange of documentation and multiple phone calls. With our experience handling hundreds of MCA settlement cases, we determine what settlement offers are reasonable based on our review of agreements.
  • If MCA providers refuse to negotiate reasonably, we assess options to file complaints with regulators or pursue legal claims. However, providers usually want to work out a deal allowing them to recover at least a portion of balances. Settlement avoids the risk they recover nothing.

4. Finalize New Payment Terms

  • Once we secure a settlement offer reducing principal owed, we seek to structure a new reasonable payment plan aligned with your budget. This replaces the prior unaffordable payments deducted automatically from credit card settlement accounts.
  • In some cases, we can negotiate small upfront payments with the remaining balance paid over several months. Ideally, new monthly payments will not exceed 5% to 10% of your projected monthly revenue.

5. Ongoing Support As Needed

  • Even once new payment terms are arranged, some MCA providers still attempt to take extra withdrawals or engage in harassment. We provide ongoing legal support responding to any further collection activities in violation of settlement agreements.
  • With the principal balance owed now settled and monthly payments affordable, you can move forward without the business disruption and stress of MCA debt hanging over your head. We help ensure the deal gets done as negotiated.

Why Work With Us for MCA Debt Settlement?

What sets us apart from other firms that dabble in debt relief?

We provide legal services, not just debt settlement. Our lawyers actively represent clients in disputes over MCA contracts. We do more than make phone calls asking to reduce balances. Through detailed contract reviews, we compel settlements by presenting legal and ethical violations we are prepared to formally allege against providers if reasonable deals cannot be reached.

See also  Atlanta MCA Defense Lawyers Business Debt Relief

Our legal leverage produces results. By presenting detailed contract reviews and making credible threats to pursue violations, we consistently achieve higher settlement discounts compared to non-attorney negotiators. In 2022, our clients settled MCA debts for an average of $0.62 on the dollar of amounts claimed as owed.

We have deep experience settling MCA debts. Since 2015, the Delancey Street law firm has provided legal representation to over 700 small business clients facing aggressive MCA collections. We’ve directly negotiated settlements with over 75 different MCA companies. No firm offers more specialized experience resolving these complex accounts.

We tailor solutions to your situation. Every business facing MCA debt has a unique financial position. In negotiations and new payment terms, our primary focus is structuring relief aligned with your budget and priorities. We work on your schedule, not the MCA provider‘s.Contact our office today for a free consultation with an attorney experienced in MCA debt settlement. We’ll review your situation and provide expert perspective on the best path forward to resolve what you owe.

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
"Thanks for helping me in literally 24 hours"
$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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