Merchant Cash Advance Attorneys In Tampa
A merchant cash advance can give your business access to funds when you need working capital quickly. However, repayment obligations can become difficult to manage if your revenue drops or your financial situation changes. When your business is already under financial pressure, keeping up with payments can make it harder to manage daily expenses and maintain operations. You may also be unsure what to do if you can no longer meet the terms of your merchant cash advance agreement.
If your business is struggling with a merchant cash advance debt, our attorneys at Ford & Semach, P.A., can help you understand your options under Florida law. With 38 years of legal experience, our founder brings extensive experience to business disputes. Call 813-302-1258 for a free consultation about your merchant cash advance matter.
What Is A Merchant Cash Advance?
A merchant cash advance, or MCA, is structured as a commercial purchase of future receivables rather than a traditional loan. The business receives funds in exchange for an agreed portion of future receivables. Repayment may come through regular bank withdrawals or a percentage of future credit and debit card sales.
Under Florida law, establishing that a merchant cash advance is a disguised loan requires demonstrating that the merchant cash advance funder did not assume the risk of nonpayment and instead holds an absolute right to repayment regardless of business performance.
If a court recharacterizes an merchant cash advance as a loan, Florida’s usury laws may apply. For loans of $500,000 or less, charging interest above 18% per year may constitute civil usury, subject to applicable exceptions. Willfully and knowingly charging interest above 25% per year may constitute criminal usury, with misdemeanor or felony penalties depending on the rate charged.
Why Do Florida Businesses Use Merchant Cash Advances?
Businesses may use a merchant cash advance when they need quick access to working capital. Funds may help cover payroll, purchase inventory, manage business cash flow or handle unexpected expenses.
However, repayment terms can create financial pressure when revenue falls. These challenges may lead to merchant cash advance debt and make it harder to meet other business expenses.
What Happens If Your Business Defaults?
Defaulting on an MCA can create serious problems. Depending on the agreement and circumstances, your business may face:
- Frequent or substantial withdrawals
- Claims that your business breached the agreement
- Collection efforts or demands for payment
- Lawsuits seeking damages or other relief
- Disputes over whether the MCA is a disguised loan
- Potential usury claims or penalties under Florida Statutes Chapter 687
- Enforcement of a UCC lien against business assets or receivables
A default may also raise questions about whether the agreement is enforceable. If a court determines that an MCA is a loan that violates Florida’s criminal usury laws, the lender may lose the right to enforce the debt and collect principal or interest in Florida courts.
Why Seeking Legal Guidance Matters
A lawyer at our firm can play a vital role in helping your Florida business manage MCA debt. MCA agreements often have aggressive repayment terms, daily withdrawals and contract language that may be difficult to understand. We will review the agreement, identify potential issues and explain your options for addressing the debt.
We will also communicate directly with the Merchant Cash Advance company on your business’s behalf, which can reduce pressure on your end and help prevent costly mistakes. If the lender threatens litigation or other collection actions, we will respond quickly and work to protect your business’s assets and cash flow. Depending on your specific situation, we may also help coordinate a broader debt strategy, including settlement discussions or restructuring efforts, so your business can focus on staying operational while addressing its financial obligations.
Additionally, our experienced Tampa merchant cash advance attorneys can also stop collector harassment and take over your communications, reducing repeated calls and other unwanted contact. By handling these conversations directly, we can protect you from intimidation and help create a more controlled environment for resolving the debt.
Discuss Your Merchant Cash Advance Debt With Us
If your business is facing a merchant cash advance default or dispute, Ford & Semach, P.A., can review your agreement, assess your circumstances and help you understand your legal options. Contact our office today at 813-302-1258 or send us an email. We offer free consultations and we can help you determine how to proceed.