Merchant Cash Advances
Understanding Merchant Cash Advances: Guidance for Small Businesses
At Cape Fear Debt Relief, we specialize in representing small businesses who have taken out Merchant Cash Advances (MCAs). Our Attorney Richard P. Cook will help you navigate the complex landscape of MCAs, ensuring that you are fully informed and adequately protected throughout the process.
What is a Merchant Cash Advance?
A Merchant Cash Advance purports to be a “sale” of “future receivables.” This sale of a small business’ future revenue leads to a payment to the business in just a few days after approval of sometimes more than $100,000.00.
However, in exchange for the sale of those “future receivables,” the small business is saddled with repaying the MCA party an amount far more than the amount that was “sold”, leading to an effective annual percentage rate of more than 50 or 100%.
The Risks and Legal Considerations
MCAs come with their own set of risks and legal considerations. The repayment structure of MCAs involves taking out fixed percentages of daily or weekly ACH payments, which can strain your business’ cash flow. Additionally, most MCA parties require your business (and its owner) to put up all of its property as collateral.
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Our Role in Protecting You
At Cape Fear Debt Relief, we are committed to ensuring that MCAs stop destroying your small business.
Attorney Richard P. Cook has filed dozens of lawsuits against MCAs and can help your small business get out from under the weight of these predatory parties. Mr. Cook is also a regular speaker at conferences teaching other attorneys how to protect their clients from MCAs.
If your small business is suffering under the strain of Merchant Cash Advances, contact Cape Fear Debt Relief today to understand your options.
