Settlement Negotiation Strategies After Identifying Risk Exposure

in MCA Legal Advice, Merchant Cash Advance

Negotiating Business Debt Settlements - Part II Before reading Part II, we recommend reviewing Part I of our Negotiating Business Debt Settlements series, which explains the difference between repayment and negotiated settlement, how MCA balances are analyzed, default-related charges, and how our attorneys evaluate a business’s vulnerability to UCC § 9-406 demand notices and potential revenue disruption. Part II continues that analysis by discussing how identified risk exposure can affect Merchant Cash Advance settlement negotiation strategies. Once our lawyers have assessed a business’s vulnerability to UCC lien disruption, we can then decide how to proceed with potential settlement negotiations and legal strategies. If...

10 October

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Merchant Cash Advance Default: Legal and Settlement Options for Businesses

By Anthony Rumore, Esq.

in MCA Legal Advice, Merchant Cash Advance

What Business Owners Should Consider When Facing an MCA Default A merchant cash advance default can create significant financial and legal pressure for a business. Missed payments can lead to collection activity, disputed ACH withdrawals, UCC-related demands, lawsuits, personal-guarantee claims, and other enforcement actions. When a business believes it can no longer maintain its scheduled MCA payments, it is important to review the agreement and circumstances before deciding what to do next. A merchant cash advance attorney can review the MCA agreements, payment history, reconciliation provisions, UCC filings, personal guarantees, funder actions, and financial condition of the business to evaluate potential legal, negotiation,...

10 October

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Negotiating Merchant Cash Advance Settlements: Factors and Considerations

By Anthony Rumore, Esq.

in MCA Legal Advice, Merchant Cash Advance

Part I: Analyzing a Business Before Negotiating an Merchant Cash Advance Settlement When negotiating a business debt settlement, particularly a Merchant Cash Advance (MCA) settlement, it is important to first understand the difference between repayment of the contractual obligation and a negotiated settlement of that obligation. A repayment generally means that the business owner pays the full contractual amount required under the Merchant Cash Advance agreement. MCA agreements are commonly structured as purchases of future receivables rather than conventional business loans, although the legal characterization of a particular transaction depends on the agreement, payment mechanics, applicable law, and circumstances. For example, assume a...

30 September

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MCA UCC 9-406 Notices: Payment Holds & Your Options

By Anthony Rumore, Esq.

in MCA Legal Advice, Merchant Cash Advance

UCC § 9-406 LIEN DEMAND NOTICES AND MCA CREDITOR LAWSUITS

One of the most effective pressure tools a merchant cash advance provider has is the UCC lien demand notice. What is a UCC § 9-406 lien demand notice? It is a letter sent by an MCA funder, its attorneys, or its collection representatives to a business's customers, payment processors, insurers, or other payors. The letter claims the funder has rights to the business's receivables and instructs the recipient to pay the funder directly instead of the business. Some funders send these notices to one or two customers. Others send them to multiple customers, processors, or payors they can identify based on information...

26 September

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What to Expect and How to Contend With High-Pressure and Aggressive Merchant Cash Advance Collection Tactics

By Anthony Rumore, Esq.

in MCA Legal Advice, Merchant Cash Advance

What to Expect and How to Contend With High-Pressure and Aggressive Merchant Cash Advance Collection Tactics

MCA collection pressure can begin before a missed payment and escalate quickly once one occurs. Here is what business owners can expect and how to respond. This article provides insight and information for business owners dealing with Merchant Cash Advance (MCA) obligations or considering their options when MCA payments begin placing pressure on business cash flow. Merchant cash advances are commercial financing arrangements and may be structured as purchases of future receivables or revenue rather than traditional business loans. The first thing to recognize is that MCA transactions can operate differently from traditional bank financing. Banks and traditional finance companies operate within...