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Missouri MCA Defense Lawyers Business Debt Relief

February 24, 20249 min read

IF YOU’RE LOOKING FOR A BUSINESS DEBT SETTLEMENT COMPANY, VISIT DELANCEY STREET. CLICK HERE NOW.

 

Missouri MCA Defense Lawyers Business Debt Relief

Small business owners in Missouri facing legal issues with merchant cash advances (MCAs) have options. Our dedicated legal team can provide guidance on MCA regulations, contract disputes, usury claims, and more. We take an empathetic approach and aim to find reasonable solutions.

Understanding MCAs

Merchant cash advances allow business owners quick access to capital in exchange for a percentage of future sales. This can be an attractive option, but MCAs have risks:

  • High effective interest rates – MCA rates often exceed 100% APR when calculated as interest
  • Overreliance – This manifests through overreliance on limited data, ignoring total debt obligations, and rushing due diligence
  • Lack of regulation – MCAs fall into a legal gray area with less regulation than bank loans

While MCAs offer easy money upfront, aggressive terms can bury businesses in unsustainable debt. Legal assistance is often needed to review contracts or challenge predatory practices.

Common MCA Legal Issues

Missouri business owners most often seek legal help for the following MCA-related issues:

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Breach of Contract

If an MCA provider violates terms spelled out in the contract, that constitutes breach of contract. Common disputes involve:

  • Misrepresenting services offered or fees charged
  • Attempting to collect payments not stipulated in the contract
  • Failing to halt ACH debits after receiving breach notifications

Proving breach of contract can nullify the agreement’s validity, releasing business owners from unfair obligations.

Unconscionability

Courts may rule contract terms are unconscionable if they are unjustly one-sided or exploit parties lacking meaningful choice. Arguments involve:

  • Deception or pressure during contract formation
  • Unable to understand terms and obligations
  • Significant imbalance of power between parties

Establishing unconscionability can invalidate questionable contract provisions.

Usury Violations

Usury laws restrict lenders from imposing excessive interest rates, typically above 10-21% APR depending on the state. MCA rates often far exceed these thresholds when calculated as interest, despite claims they simply purchase future receivables. Building a usury claim requires:

  • Determining the effective APR based on fees paid over time
  • Proving the legal elements constituting a “loan”
  • Overcoming contract verbiage attempting to disclaim usury laws

Prevailing usury claims erase obligations to pay interest above state limits and can eliminate entire debts.

Working with Defense Lawyers

Challenging predatory MCA tactics requires understanding complex regulations and constructing nuanced legal arguments. Partnering with knowledgeable business attorneys improves outcomes. Here’s what to expect:

Investigation & Research

Experienced lawyers dig into the specifics of your situation to identify potential defenses. This involves examining:

  • MCA contract provisions and communications
  • Effective APR based on fees extracted
  • Circumstances around contract formation
  • Conduct violating regulations or contractual duties

Thorough investigation uncovers the most promising angles for building a robust legal case.

Demand Letters & Negotiation

Before filing claims in court, lawyers typically send demand letters detailing uncovered issues with the MCA contract and relationship. These letters can spur negotiations resulting in:

  • Settling debts for pennies on the dollar
  • Removing unconscionable contract terms
  • Revising agreements to comply with usury limits
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Amicable resolution saves significant money and heartache compared to prolonged legal battles.

Litigation & Alternate Resolution

If MCA providers resist good faith renegotiation, we prepare to fight for your rights in court. Lawyers adept at MCA disputes help craft arguments and gather supporting evidence to prove:

  • Breach of contractual provisions
  • Defects undermining validity of agreements
  • Violations of usury laws capping interest rates

We also suggest alternate dispute resolution approaches like arbitration and mediation which can resolve issues faster and less expensively than lawsuits.

Missouri MCA Defense Lawyers

At Delancey Street, our legal team combines extensive experience fighting MCA abuse with a compassionate desire to help business owners seeking relief from predatory contracts.We offer free consultations to review your situation and lay out options. There are always alternatives, even when circumstances seem hopeless. Our lawyers can help negotiate, litigate, and facilitate fair solutions so you can move forward.Contact us today at 212-210-1851 to discuss your situation with an MCA defense lawyer. Help overcoming unfair contracts could be just a phone call away.

Common Defenses Against MCA Companies

Merchant cash advance providers often use aggressive tactics violating legal duties or pushing unethical contracts. Several defenses can counter these predatory practices.

Unconscionability

  • Arguments – Terms grossly favor MCA companies, deceit or coercion surrounded signing, inability to understand obligations
  • Impact – Invalidates one-sided or confusing contractual provisions

Breach of Contract

  • Arguments – Violating stipulated services, fees, or processes
  • Impact – Nullifies contract validity and releases obligations

Usury Violations

  • Arguments – Effective rate exceeds state limits when calculated as interest
  • Impact – Cancels illegal interest without repaying principal
See also  Arlington MCA Defense Lawyers Business Debt Relief

Violating State MCA Regulations

  • Arguments – Ignoring licensing, disclosures, restrictions imposed by state
  • Impact – Nullification, penalties, canceled debt

Missouri MCA Regulations

Missouri regulates MCAs more strictly than many states, providing useful angles for legal challenges. Understanding key rules can help identify noncompliance:

Licensure Requirements

MCA companies must obtain licenses from Missouri regulators before offering merchant cash advances in the state (§367.500, RSMo). Unlicensed activity violates law.

Rate Caps

Interest rates on cash advances under $500 cannot exceed 21% APR. Between $500-$5000, rates are capped at 24% APR (§408.232, RSMo). Higher charges could justify usury claims.

Mandatory Disclosures

MCA contracts must clearly state key terms like rates, fees, repayment timing/amounts. Insufficient transparency violates regulations.

Selecting Defense Lawyers

Choosing the right legal team makes navigating MCA disputes much smoother. Look for these key traits:

  • Deep MCA Experience – Extensive background with MCA contracts and industry tactics
  • Creative Litigators – Construct innovative legal arguments adapting to shifting landscape
  • Compassionate Counsel – Genuinely care about client needs and financial well-being
  • Reasonable Fees – Flexible structures avoiding upfront costs

Prioritizing the right combination of legal skills and personal qualities leads to the most empowering attorney relationships.

Four Reasons to Challenge Predatory MCAs

Fighting back against abusive MCA tactics is daunting but essential to protect businesses. Benefits include:

1. Preserve Capital – Ending illegal debts saves money reinvested into growth

2. Deter Bad Actors – Discourages future misconduct when providers pay penalties

3. Regain Control – Escape unfair contracts strangling business operations

4. Peace of Mind – Focus forward without constant stress over crushing obligationsStanding up to MCA harassment offers more than financial rewards – it liberates creativity, productivity, and passion.

Alternatives to Risky Merchant Cash Advances

Risky MCA loans aren’t the only fast financing options. Safer liquidity solutions include:

Asset-Based Loans

  • Lower rates based on business assets/revenue
  • Flexible repayment aligned with cash flows

SBA Loans

  • Competitive interest rates
  • Longer terms up to 10 years

Invoice Factoring

  • Receive cash for unpaid invoices
  • Pay fees only on amount advanced

Angel Investors

  • Tap networks for friendly capital
  • Share equity vs. fixed obligations

Explore alternatives matching business needs without spiraling unmanageable debt.

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