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Business owners must ensure that their businesses run smoothly and with proper capital. For that reason, many of them take up a "merchant cash advance" to offset some early costs. This can, however, put many people in serious debt on occasion. In that situation, having a dedicated merchant cash advance attorney on your side can really help with problems you may face. Many people do not know quite how an MCA lawyer can help them with the problems merchant cash advances can bring. So below are five ways an MCA attorney can directly assist you in resolving issues you may have.
What Is a Merchant Cash Advance?
For those who do not know, a merchant cash advance is a specific method of attaining capital to start a business. It is also used to offset sudden debts. It allows a trader to either get an upfront loan in exchange for a portion of future credit and debit card sales. Alternatively, you can get the same loan and repay it via direct daily or weekly debits. The history of merchant cash advances is heavily tied to companies who attain most of their revenue from credit and debit card sales. In recent times, other businesses have had access to them. This has meant their problems have grown as merchants make use of this lending scheme. These advances have allowed many merchants to get started with their business quickly. But in recent times, due to the coronavirus, the number of businesses getting into trouble over the loans has skyrocketed. This is where a merchant cash advance lawyer can step in and prevent the problems from getting worse.
1. Get a Merchant Cash Advance Attorney to Prevent Harassment
Merchant cash advance lenders can be extremely aggressive in their marketing. This tenacity does not stop once an individual has attained an advance, however. Once someone misses a payment, the lenders regularly follow up on the missed payments with impunity.
In a worst-case scenario, a trader may have signed a “Confession of Judgement” as part of the process. Such a confession allows lenders to seize assets even when no default has occurred.
This leads to confusion and further problems for the person who has borrowed the money. Alternatively, a default may have occurred, and the lender may be following up, despite the situation not yet calling for such action. An MCA attorney can help you by first reading over your contract and advising you on your legal options. After this, they may be able to apply various legal methods to prevent the lenders from harassing you. At the very least, they may be able to offer support with how the law can help protect you in the long-term.
2. Unfreeze Your Accounts
It may be that you find your payment processing accounts have been frozen. In this situation, an MCA attorney will be able to look at your contract with your payment regulator. With this knowledge, they will be able to define the easiest way to unfreeze the accounts. If the accounts are not yet frozen, a merchant cash advance lawyer should be able to give you some advice. You will then be able to avoid this in the future. Taking action before a problem occurs is always a good idea. A qualified individual can put you in the best position to do so.
3. Reduce Payouts When Talking About Your MCA
You should be aware of the difference between payouts and interest. If your payouts are set at 20%, this does not mean a monthly or yearly increase to what you have been lent by 20%. That is interest. Instead, it refers to the percentage of your future sales that will go toward paying for the loan. This confusion can lead to overly aggressive — or inappropriately low — payouts. Should either happen, you will want to go back to the lender and discuss how you can both adjust the contract for everybody’s benefit. With an MCA lawyer on your side, you will have the legal know-how and ability to get to the negotiating table. Acting in your best interest, the attorney can approach your lender and discuss alternative options. Through this, they will be able to ensure you can repay the advance while also maintaining your business.
4. Negotiate Interest Rates
When talking about your contract, you may find that your payouts are just fine. Instead, you might discover your yearly interest far outstrips what you can provide. Similar to reducing payouts, an MCA law firm can discuss the finer points of a contract on your behalf. Should you find your interest rates are too high, they may be able to define a new contract that works for you. You need not worry about inflating interest rates, or them changing without your permission.
5. Restore a Damaged Reputation
Through the actions of a lender, you may find that others in your community start to distrust you. They may besmirch your ability to save money or make other inappropriate comments. This is not your fault and may even be a case of the lender engaging in slander or libel. This is definitely something you should mention to an attorney. A qualified merchant cash advance attorney can discuss with you what slander and libel are. They can then discuss issuing cease and desist letters if necessary, among other options. They will act according to your instructions after you understand the pros and cons of the decision.
We Can Help
There are a great many merchant cash advance attorney firms around. All of them will give you slightly different advice, depending on their expertise, and can either be a good or bad fit for you. Fortunately, we can help you trawl through the options. You can pick a firm with the right attitude and experience to help you ensure your business's safety going forward. Simply send us a message or give us a call and we will take the time to get back to you quickly.