Merchant Cash Advances are those aggressive and pesky business loans that are technically not loans but rather a “purchase of future receivables.” Their interest rates are sky high and would violate most state criminal usury laws if they were loans. MCA’s have been able to get around these sorts of laws because up until recently, most cases upheld that they are not loans allowing them to avoid regulation and protections in place for most business and personal loans. However, most recently both Federal and State Court judges in New York have started ruling that these are in fact extremely high interest rate loans and predatory at that. From our perspective, this has made the MCA’s even more aggressive when pursuing collection and litigation. Their collectors and agents contact small businesses and their owners relentlessly, often embarrassing, pressuring, scaring and intimidating them. They sue quickly and frequently and attempt to obtain default judgments shortly after time to answer has ended or because the wrong address was served meaning the business never received notice of the lawsuit. Most recently, we have observed that they try to avoid litigation especially when they see a business is represented by an attorney and instead try to use UCC liens as a back-end route to place levies and and liens against online platforms that the business uses such as PayPal, Venmo, Amazon, Intuit, Square, Stripe, and others. This puts the business in a position where they cannot continue to operate and must concede to paying whatever outrageous amounts are requested by the Merchant Cash Advance companies.
We have written numerous articles explaining how to defend against Merchant Cash lenders or how to vacate default judgments often obtained by them. However, it is also important to be wary of the many so-called debt settlement and debt consolidation companies out there that claim they can help settle or even eliminate Merchant Cash Advance debt. The truth is that these companies almost always charge exorbitantly high fees even if they are at the end of the process taking 20% or more of what is saved. The bigger issue is that they usually take client funds and put them into an escrow account waiting for the funds to accrue while taking no affirmative action. This is a poor strategy against any creditor let alone MCA’s as they are aggressive and take action almost immediately against small business such as placing UCC liens and filing lawsuits before these settlement or consolidation companies are able to accrue client funds to settle. These companies often do not even have an attorney working for them leaving the business in a situation where they must immediately find an attorney to handle this sort of matter if a lien is placed or litigation is initiated. Most concerning is that there are attorneys who take on these matters with little to no experience defending or settling Merchant Cash Advance matters and instead of defending the client and the case through legal means, some of these attorney’s place clients into a debt settlement program they created just like the debt settlement companies discussed above waiting for their funds to accrue to begin negotiation. Meanwhile the MCA’s sue and place liens on the business before anything happens.
For these reasons it is imperative to contact an experienced Merchant Cash Advance defense attorney when dealing with any of these cash advances: Kodiak Funding, Mantis Funding, Pearl Delta Funding, Pearl Capital, Premier Capital Funding, Kalamata Capital Group, Silver Lines Inc., Fox Capital, Queen Funding, Slate Funding, Strategic Capital Funding, Green Note Funding, Ace Funding, Last Chance Funding, Kash Capital, Strategic Funding DBA Kapitus Business Funding and others.
That also goes for the collection law firms that represent these MCA creditors including:
Jason Gang, Berkovitch and Bouskila, Jeffrey Zachter, Theodore Cohen, Christopher Castro, Law Office of Vadim Serebro, Marvin Ben Aaron, Yeshaya Gorkin, Stein & Stein, Nikolaos Athanstapolous, Israel Weinstein, Feldman Law Firm, Steven Zakharayev, Yana Chechelnitsky, Isaac Greenfield, Gabriel Mendelberg, Steven Wells, and others.