Merchant cash advances (MCAs) are one of several ways businesses can get quick funding. Others include business loans and getting business credit cards. Among these options, MCAs are among the riskiest.
MCA collectors can start with friendly reminders, but their tactics can become aggressive down the line. Here are some things they might do:
- Harassing phone calls: Getting many calls each day, even early in the morning, late at night or on weekends, which disrupts your work and personal time.
- Intense emails and text messages: Receiving lots of demanding messages, sometimes with mean or threatening words, sent to many email addresses or phone numbers.
- Unprofessional language: Using bad language, insults or other hurtful words when talking to you.
- Threats of lawsuits or other legal actions: Saying they will sue you or take other legal action, even if they don’t actually do it, or telling you things about the law that aren’t true.
- Unauthorized debits: Taking money out of your business bank account without your permission or taking out more than you agreed to in your MCA agreement, or taking money out at times not allowed by the agreement.
- Contacting clients and vendors: Talking to your customers or suppliers to try to get you to pay, which can hurt your business relationships.
At times, contact from collectors involves deception. They may act as debt buyers or even pretend to be lawyers or court officials to pressure you into paying. To know whether you’re actually talking to legitimate representatives, just know they most definitely won’t use unprofessional language or make personal threats.
Seek help instead of going it alone
The impact of aggressive MCA collections can be devastating for your business. Constant harassment and threats can disrupt your operations, damage your reputation and create financial strain. Trying to handle these situations on your own can be overwhelming and complex, especially given the lack of regulatory oversight in the MCA industry.
If you’re facing aggressive MCA collection tactics, consider consulting with a legal professional. An attorney can help you understand your rights and develop a strategy to protect your business.