North Carolina Business Debt Settlement and Merchant Cash Advance Lawyers

North Carolina Business Debt Settlement and Merchant Cash Advance Laws

North Carolina has specific laws regulating debt settlement companies and merchant cash advances. As a business owner in North Carolina struggling with debt, it’s important to understand these laws so you can make informed decisions.

Overview of North Carolina Debt Settlement Laws

North Carolina law defines debt settlement companies as collection agencies. This means they must be licensed by the North Carolina Department of Insurance (NCDOI) to operate in the state (see N.C. Gen. Stat. § 50-70-1).The state also passed the Consumer Economic Protection Act (CEPA) in 2009, which imposed additional requirements on debt settlement companies:

  • Debt buyers must be licensed
  • Restrictions on fees charged to NC customers
  • Requirements for clear fee disclosures
  • $150,000 settlement paid to the state

However, many debt settlement companies have found loopholes to avoid licensing. House Bill 481, introduced in March 2023, aims to modernize regulations by clearly prohibiting unlicensed debt adjusting. So if you choose debt settlement, carefully research companies to ensure they follow NC laws. Licensed, ethical companies like Delancey Street can provide transparent guidance.

What is a Merchant Cash Advance?

A merchant cash advance (MCA) provides a business with immediate funding in exchange for a percentage of future sales. It’s an alternative financing option if you don’t qualify for a bank loan.With an MCA, a funding company gives you an upfront lump sum, usually $5,000-$500,000. In exchange, you agree to pay back the advance through daily or weekly payments taken as a percentage of sales, usually 10-20%. Payments continue until you pay back the full amount (plus fees).

Advantages and Disadvantages of Merchant Cash Advances

Merchant cash advances offer quick access to funds with minimal eligibility requirements. However, the high fees and terms often create more long-term struggles for business owners.


  • Fast approval and funding in days or weeks
  • Few eligibility requirements
  • Flexible payback based on sales
  • Funds usable for any business need


  • Extremely high fees and rates
  • Daily/weekly payments strain cash flow
  • No limits on total payback amount
  • Aggressive collections if in default

So while an MCA provides quick relief, it rarely solves underlying financial issues. Business owners often end up worse off from the high fees and rates.

North Carolina Laws on Merchant Cash Advances

North Carolina does not currently regulate merchant cash advances. However, the extremely high rates and aggressive collection tactics have raised concerns.In June 2022, the North Carolina Commissioner of Banks proposed a new bill to establish oversight over the MCA industry in the state. 

The bill would:

  • Require MCA providers to register with the state
  • Cap interest rates and fees
  • Outlaw certain abusive practices

This proposed cash advance legislation aims to protect North Carolina businesses from predatory lending. If passed, it would give business owners stronger defenses against harassment from MCA companies.

Alternatives to Merchant Cash Advances

Rather than struggle with an expensive MCA, North Carolina business owners have other options to resolve debt:Debt Settlement – Work with a licensed debt settlement company to negotiate discounts on what you owe. This legally terminates accounts for less than the full balance.Debt Consolidation – Combine multiple debts into one new loan with lower monthly payments. This makes payments more affordable long-term.Bankruptcy – As a last resort, Chapter 7 or Chapter 11 bankruptcy discharges qualifying business debt. This provides a fresh start for viable companies facing financial crisis.

How Delancey Street Can Help

The attorneys and financial experts at Delancey Street offer a free consultation to review your North Carolina business debts. We have over 20 years of experience helping companies legally resolve accounts for less than what they owe.Our simple 3 step process includes:

  1. Free debt assessment – Review your situation and discuss options customized for your business.
  2. Dedicated specialist – Get assigned an advisor who handles everything related to settling your debts.
  3. Customized action plan – Work with your specialist to tailor a strategic plan to resolve accounts based on your budget and goals.

Instead of an expensive merchant cash advance that sinks you deeper in debt, our legally proven programs help North Carolina business owners permanently settle accounts and achieve financial freedom.


With complex state laws and fewer protections than consumers, North Carolina business owners must carefully examine their financial options. Merchant cash advances may provide quick but costly relief that worsens long-term issues. Ethical debt settlement conducted by specialists like Delancey Street offers a proven way out of debt.

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