Are you looking for a New York MCA loan restructure attorney? We have worked on many of these cases in New York. A lot of these types of agreements are governed by New York law and are in fact originated by companies and brokers who are also based in New York. This is presumably why a lot of cases enforcing these types of financing arrangements are in New York.
There are generally two types of ways to settle these cases; one of the ways is in court, and the other is out of court. Typically, if you are looking for a New York MCA loan restructure attorney you will be looking to settle out of court, but not always; sometimes when you are looking for an attorney, you need both, and we do both, in court and out of court, that is.
The two processes are different but they generally seek to achieve the same result: restructure your MCA financing transaction. And this brings me to my first point: New York law does not treat these financing transactions as loans, it treats them as “receivables purchases” financing transactions. On a very basic and fundamental basis the difference is this: a loan as where a lender extends credit to you and you have to pay the credit back. A receivables purchase, on the other hand, is not an extension of credit; it’s where a financing company buys a merchant’s — a fancy way of saying a business’s — receivables. Put another way, extending credit buys no asset, and in fact, the lender creates an asset by creating the loan, where the receivables purchase is the purchase of an existing asset. And New York law treats these two transactions differently.
On a fundamental level it is important for a business owner to understand the difference between a customary loan and a receivables purchase per the foregoing. Why? Because the law treats them differently in a very material way. For instance, in a credit agreement, usury law applies in New York, meaning, there are limits as to what a credit lender can charge a business for a loan. Very generally speaking, in the business context, that’s 25%. However, there are very may nuances and exceptions and other limits that apply and do not apply depending on the circumstances, but that’s a conversation for a different time. Sometimes the usury rate in New York can get as low as 15% but again, that’s a conversation for a different time. What’s important here is knowing the difference, because in New York, a loan or credit agreement is subject to usury limits on interest rates, while in receivables purchases financing arrangements, usury limits to not apply and financing companies can literally charge whatever they want for the money they extend, or advance, in the context of their merchant cash advance, or MCA, financing transactions. An attorney who calls himself or herself a New York MCA loan restructure attorney should know this, although these financing transactions are not technically “loans” according to New York law as aforesaid.
For the most part, most merchants in these scenarios do not read the financing documents before they sign them, and they have no idea what they are getting into. And this makes sense because by the time a merchant gets to the point of getting financing from and MCA financing company, the merchant has no credit and is desperate and thirsty for cash. The need for cash at that point is acute, and real, and immediate. Merchants use these MCA financing transactions to solve that urgent cash need immediately, and it’s so urgent that most or a very large part of merchants do not fully understand the terms of the merchant cash advance, or MCA, financing transactions they are getting themselves into. This is not to say that even if they did know the terms, they would not enter into the financing transaction anyway, because they probably would because the need for cash is real and immediate and at that point literally nothing else matters, or the business would fail. (I know that’s a lot of negatives, but it was important to write it that way to get the point across.)
How can a New York MCA loan restructure attorney help? Preliminarily, it’s useful to know where the merchant is in the cycle – for example, have you signed the agreement yet? Have you signed and not defaulted and you’re looking for more funds? Have you signed and defaulted and there is no lawsuit yet filed? Have you signed and defaulted in there is a lawsuit but your response time has not yet expedited? Have you signed and defaulted and there is a lawsuit and there is also a default judgment has been filed against you? Have your bank accounts been restricted or blocked or frozen? Have notices gone out to creditors from the MCA financing company? The answers to these questions matter and you should discuss these and other issues with an experienced New York MCA loan restructure attorney.
Why do the answers to these questions matter? It’s because once an attorney has those answers, he or she can strategize and employ tactics to best serve you, best protect your rights, and work to get the absolutely best possible outcome for you. This is why merchants need New York MCA loan restructure attorneys. These types of attorneys, and we are this type of attorney precisely, need to ask the right questions, get the right answers, give you the best advice possible, and get the best results under the circumstances.
Another very important point that The Lawyer James, as a New York MCA loan restructure attorney knows, is that the analysis and recommendations (and, of course, questions for you) are heavily dependent on the language of the MCA financing documents themselves.
We have worked on many of these types of merchant cash advance financing transactions and all the disputes that we have resolved in the past have been resolved in a manner that our clients — the merchants — agreed. Please note, however, and this is super important, that not every dispute will settle. Where we are most effective is using the legal system and strategies we have developed to give merchants some breathing room so that they can explore other financing opportunities or improve their cash flow. Give us a call at (212) 500-1891 to set a short, quick, and free phone appointment with an attorney to discuss your options.