When quick cash from a merchant cash advance (MCA) spirals out of control, a struggling business owner may resort to stacking more advances. This creates a financial chokehold, which can trigger attacks from multiple aggressive lenders. How can a business owner fight back and reclaim their cash flow?
Aggressive defense tactics
When facing a storm of aggressive MCA lenders, a business owner must move swiftly. They can do the following:
- File a motion to vacate judgment: Filing to vacate a confession of judgment (COJ), whether due to improper filing or the MCA being a disguised usurious loan, may unfreeze business funds.
- Assert claims of contract interference: Revealing that a later lender encouraged stacking, which is a breach of the prior contract, can weaken their position at the negotiating table.
- Document all lender harassment: Keeping a detailed record of every call, email and threat from all lenders and their collection agents can help build a strong defense.
- Review all contracts for legal weakness: Studying every signed MCA agreement and personal guarantee can uncover violations or unenforceable clauses.
These actions are about positioning the business for a robust defense. Such actions can help a business owner take control over the situation while preparing for legal action from all sides.
Pursuing a lasting resolution
Facing aggressive lenders after stacking MCAs is an incredibly difficult challenge. Navigating the complex legal landscape and deploying an aggressive strategy requires not just knowledge but also a willingness to fight for one’s rights and future. With legal counsel, a business owner may better pursue a lasting resolution as they aim for renewed financial stability.