Business owners who have taken out merchant cash advances (MCAs) to fund their operations may be unaware of the risks associated with these debts. As a condition of the MCA agreement, an MCA lender files a UCC lien against a business owner’s assets.
However, the enforcement of this lien can have severe consequences for business owners who have defaulted on their MCA debts. Are you a business owner facing MCA debts who wants to know how to minimize the risks of a UCC lien enforcement?
Taking proactive steps
Enforcement of a UCC lien can result in the seizure of assets, which can be devastating for a business already struggling to pay back MCA debts. As a business owner, you can consider doing the following to be prepared for a looming lien enforcement:
- Reviewing the MCA agreement carefully to understand the terms and conditions is crucial as it can help you know what to expect and plan accordingly. This review can help you identify potential risks and take steps to mitigate them.
- Maintaining accurate financial records can help you have a clear understanding of your financial situation.
- Knowing your rights under the Uniform Commercial Code (UCC) can help you navigate your UCC lien issue and understand the requirements for compliance. The UCC governs commercial transactions throughout the United States.
- Consulting a financial adviser can help you make informed decisions about your MCA debts.
By taking these steps, you may be better equipped to protect your business assets and manage your MCA debts. Being proactive and informed can help you take action against the consequences of a UCC lien enforcement.
Developing a plan to protect your business
When your business assets are at risk, taking action to protect them may be challenging and daunting. A legal advocate can provide guidance and support to help you navigate the complex world of MCA debts and UCC liens. With legal advice, you may explore your options and develop a plan to protect your business.