Vermont Business Debt Settlement and Merchant Cash Advance Lawyers
Struggling with business debt can feel overwhelming. If you own a small business in Vermont and are having trouble keeping up with payments, working with an experienced debt relief company may help provide options.
How We Can Help With Vermont Business Debt
At Delancey Street, our dedicated team of experts has helped business owners across the country get out of debt and regain financial stability. We take an individualized approach to each client, seeking to understand their unique situation and provide customized debt relief solutions.Our services include:
- Business debt settlement – We negotiate with your creditors and collectors to reduce your balances. Many of our clients settle for 30-50% less than they owe.
- Debt restructuring and management plans – We can help organize your debts into one monthly payment and get you on track towards being debt-free.
- Ongoing support and guidance – Even after settling your debts, our advisors remain available to answer questions and provide coaching to help you make financially sound decisions.
If you’re struggling with business loans, credit cards, payroll taxes, merchant cash advances or other debts, give us a call at 212-210-1851 for a free consultation. We have attorneys on staff who can review your situation and explain your options.
What is a Merchant Cash Advance?
A merchant cash advance (MCA) provides a lump sum of cash to a business in exchange for a percentage of future credit card sales over a set period of time. It is not technically considered a loan, so MCA companies can charge higher fees and rates without adhering to state laws that cap interest rates.MCAs appeal to many small businesses because:
- Approval is quick and funding can be received in days
- No collateral is required
- Payments adjust based on sales volumes
However, the costs can spiral out of control. Rates often exceed 100% APR when fees are calculated as interest. If your business has a slow period, you still owe daily payments based on the outstanding balance. Within months, more money is going to the MCA company than staying in your bank account.
MCA Companies File Lawsuits Against Vermont Small Businesses
Thousands of small business owners across the U.S. have been sued by MCA funders after defaulting on these high-cost cash advances. A recent report found that MCA lawsuits increased nationally by over 65% from 2018 to 2019.The same trend is happening in Vermont. As more local businesses turned to merchant cash advances during COVID slowdowns, we have seen MCA companies file collections lawsuits against Vermont small business owners after they miss payments.Some aggressive MCA companies try to use confessions of judgement (COJ) to seize assets without allowing the business owner to defend themselves in court. Thankfully, Vermont banned COJs in 2013. But MCA companies still sue Vermont small businesses for breach of contract once they default.
Your Defense Options Against MCA Lawsuits
The good news is that small business owners have defenses against MCA lawsuits under Vermont law. An experienced business debt attorney can help you fight back against predatory MCA companies.Potential defenses include:
- Unconscionability – Argue that the MCA agreement terms were unjustly one-sided or unfair when the contract was formed. This can potentially invalidate the entire agreement.
- Usury violations – MCA rates that exceed Vermont’s usury cap of 24% may be reduced by the courts.
- Deceptive trade practices – If an MCA broker lied about terms or conditions, this may constitute fraudulent inducement or deceptive trade practices.
- Contract disputes – Errors in the MCA agreement or violations of its terms by the funder can be used to fight the lawsuit.
