Connecticut MCA Defense Lawyers Business Debt Relief

Connecticut MCA Defense Lawyers Business Debt Relief

Merchant cash advances (MCAs) can seem like an easy way for Connecticut small businesses to get quick cash, but they come with big risks. If your business has MCA debt, you may be facing aggressive collection tactics or even lawsuits. Don’t go it alone – consult a knowledgeable Connecticut MCA defense lawyer before it’s too late.In this article, we’ll walk you through everything you need to know about defending against predatory MCA companies in Connecticut. We’ll explain:

  • How merchant cash advances work
  • Key laws and legal precedents
  • Common defenses and strategies
  • When it’s time to call an MCA attorney
  • Alternatives to high-cost merchant cash advances

How Connecticut 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 and debit card sales. It is not technically a loan, so MCA companies can bypass consumer protection laws that regulate lending.Here’s how it works:

  • You apply for financing based on your credit card/debit card sales volume
  • An MCA company approves you for a certain amount
  • They transfer the funds into your bank account, often within 24 hours
  • You pay back the advance through daily or weekly debits from your merchant account
  • The total amount you repay can far exceed the original advance

MCAs appeal to small businesses because:

  • Fast approval and funding
  • Few eligibility requirements – personal credit scores often ignored
  • No collateral required

However, the costs, risks and collection tactics can be downright predatory.

Key Connecticut Laws Governing Merchant Cash Advances

Connecticut regulates loans, but merchant cash advances fall outside many consumer protection laws because they are not technically loans. However, some important laws still apply:

Usury Laws

Connecticut makes it illegal to charge over 12% APR on consumer loans under $15,000. Business loans can be charged up to 18% APR.MCA companies get around usury laws because merchant cash advances are not considered loans.

Deceptive Acts and Practices

Connecticut’s Unfair Trade Practices Act prohibits deceptive acts in commerce. The state Department of Banking can investigate MCA companies for predatory lending practices. Victims can sue for damages.

Confessions of Judgement

Many MCA agreements require the borrower to sign a confession of judgement. This gives up your right to defend yourself if sued for nonpayment. The MCA company can get an instant judgement without even notifying you.

Common Connecticut MCA Defenses

There are defenses Connecticut business owners can assert against predatory merchant cash advance companies and debt collectors, including:

  • No Valid Agreement – The MCA contract may be void or voidable if signatures were forged or unauthorized, terms are unconscionable, or laws were violated.
  • Breach of Contract – If the MCA company did not honor all terms of the agreement, they may have breached first, excusing further performance.
  • Unconscionability – Excessive costs or unfair terms could make an MCA agreement invalid and unenforceable.
  • Deceptive Acts – Misrepresentations and omissions during the application process may violate state consumer protection laws.
  • Usury Violations – Effective interest rates above CT usury caps could invalidate the agreement.
  • Electronic Funds Transfer Act – Withdrawing money without proper consent violates federal law.
  • Fair Debt Collection Practices Act – Harassing collection tactics violate federal law.

A qualified Connecticut MCA lawyer can analyze if any of these defenses support your right to invalidate the agreement or sue for damages.

When to Call a Connecticut MCA Attorney

Are you losing sleep over merchant cash advance debt? Before it’s too late, speak to a knowledgeable Connecticut MCA lawyer. Look for attorneys experienced fighting MCA companies in court and at the negotiating table.A qualified lawyer can analyze your case, advise you of your rights, and take action to resolve MCA debt.Don’t wait until you are sued – the sooner you call for help, the more options will be available.

Alternatives to Merchant Cash Advances in Connecticut

The risks and costs of merchant cash advances often outweigh the benefits for Connecticut small businesses. Before going the MCA route, consider safer financing options such as:

  • Bank loans
  • SBA loans
  • Business credit cards
  • Equipment financing
  • Invoice factoring
  • Angel investors

A Connecticut small business lawyer can explain the pros and cons of various financing options. While merchant cash advances are easy to get, they are rarely the best choice.

Connecticut MCA Defense Lawyers Can Help

If you signed a merchant cash advance agreement without understanding the risks, costs and collection consequences – don’t panic.A qualified Connecticut MCA defense attorney can often get excessive debts reduced or invalidated. We fight hard against junk fees, penalty interest rates, and other predatory practices.Our lawyers will thoroughly analyze your MCA agreement to spot any violations of law that could form the basis of a defense or counterclaim. We then aggressively defend clients against lawsuits and negotiate reduced settlements with MCA companies.Don’t let predatory lenders drive your Connecticut small business into bankruptcy. Fight back with experienced legal representation on your side.

About Delancey Street

Delancey Street has extensive experience helping small business owners resolve issues with MCA companies. Our dedicated experts work one-on-one with each client to negotiate settlements, restructure payments, and restore financial health.We know you work hard building your business – don’t let merchant cash advance debt bring you down. Our simple process can help you:

  • Get out of expensive MCA agreements
  • Reduce payments to affordable levels
  • Settle debts for less than you owe
  • Avoid lawsuits or freeze collection efforts
  • Explore alternative financing options

Delancey Street will thoroughly analyze your situation, clearly explain all options, and fight aggressively on your behalf. There are always alternatives to bankruptcy or shutting down.To speak with an MCA debt specialist, call 212-210-1851 or request a free consultation online.

Frequently Asked Questions

Still have questions about defending against Connecticut MCA companies? Here are answers to some common questions:

Are merchant cash advances really loans?

No. Merchant cash advances are structured as purchases of future sales, allowing MCA companies to skirt state lending laws. But for all intents and purposes, MCAs function as extremely high-cost loans.

Can I be sued personally for my business’ MCA debt?

Yes. Most MCA agreements require a personal guarantee. The MCA company can pursue legal judgements against both your Connecticut business and you personally.

What happens if I stop making daily MCA payments?

Your business will go into default. The MCA company can then:

  • File a lawsuit and obtain a judgement
  • Freeze your bank accounts
  • Seize assets
  • Record liens to prevent selling property
  • Report nonpayment to credit bureaus

Without legal assistance, defaulting on an MCA can quickly put you out of business.

Are MCA rates capped in CT like payday loans?

No. Connecticut usury laws restricting interest rates specifically exempt merchant cash advances. MCA companies face no limits on the effective APRs they can charge. Rates of 200-500% are common.

Can filing bankruptcy erase MCA debts?

Maybe. Bankruptcy will stop collection efforts and lawsuits. Whether MCA debts are actually discharged depends on what chapter you file and if the court views it as loan or a purchase/sale agreement.

How much do MCA defense attorneys cost?

Most lawyers offer free initial consultations so you can understand your rights and options at no charge. They work on a contingency fee basis, taking a percentage of any savings achieved. There are no upfront fees.

About the Author

John Smith is a business finance writer and small business advocate. He is passionate about helping entrepreneurs make smart funding choices so they can prosper. I hope this overview on defending against predatory Connecticut MCA companies has been helpful. Don’t let junk fees and crushing debt destroy all your hard work. Fight back with experienced legal firepower on your side.Delancey Street will thoroughly analyze your situation for free, clearly explain all options, and fight aggressively to resolve your MCA debt.To speak with a specialist, call 212-210-1851 or request a free consultation online.

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