Merchant cash advances (MCAs) have revolutionized business funding in the United States and abroad, delivering lucrative business opportunities for funders. Yet, defaults can threaten returns without strategic and aggressive legal action. At David I. Mizrahi Law, P.C., we focus on representing MCA funders across New York and New Jersey, guiding them through this dynamic landscape with confidence. As an experienced merchant cash advance attorney, we enforce MCA agreements, protecting funders and maximizing recovery post-default. In a competitive market, we’re your legal edge when stakes are at their highest.
Merchant cash advances tie funding to future receivables. A weak MCA agreement may leave your investment at risk. An MCA attorney steps in and ensures the merchant upholds their end of the deal. Whether funding startups or retailers, our law firm crafts solutions to safeguard your investment from the outset. Defaults can erode your capital, transforming potential gains into setbacks. Our MCA lawyer battles to protect your funding, shielding you from merchants who try to take advantage and who fail to honor their commitments.
As a merchant cash advance attorney, we lock in clear repayment terms, often daily or weekly, with compliance to New York’s Commercial Finance Disclosure Law (CFDL) and utilize recovery tools like UCC financing statements, UCC lien acknowledgments, reconciliation provisions, and default clauses. Our firm tailors each strategy to shield your capital, whether for a small business or larger enterprise, embedding robust enforcement clauses in each contract to fortify your deal against breaches.
An MCA isn’t a loan, it’s a purchase of future receivables. This is a distinction that shields cash advance deals from usury laws, as upheld by New York courts like the Fourth Department in Samson MCA LLC v. Joseph A. Russo M.D. P.C. (2023). Courts apply a three-factor test to confirm this: (1) a mandatory reconciliation provision adjusting payments based on actual receipts, (2) an indefinite term with no fixed repayment schedule, and (3) no default triggered by a merchant’s bankruptcy filing. In Principis Capital, LLC v. I Do, Inc. (2022), the court emphasized that reconciliation provisions create a contingent repayment structure, negating loan classification, a principle we always apply to safeguard your merchant cash advance funds.
Merchants often claim MCA agreements are usurious loans to avoid repayment, but we dismantle these defenses. Courts consistently rule that MCAs with reconciliation provisions and indefinite terms aren’t loans, as in Streamlined Consultants, Inc. v. EBF Holdings LLC (2022), where the court noted the absence of an absolute repayment obligation as key to rejecting usury claims. As your merchant cash advance attorney, we build agreements that courts recognize as legitimate purchases, ensuring your right to collect remains intact.
When merchants fail to pay, we attack with relentless focus, representing MCA funders to transform defaults into victories. Our MCA law firm counters debtor tactics with honed strategies, starting with pre-suit negotiation and escalating to filing a summons and complaint when breaches demand it. We manage collections, negotiate strategic settlements, pursue litigation, and secure judgments, driving each case with precision to recover your merchant cash advance funds. With an MBA background, I approach every default as a financial puzzle. Winning the lawsuit is just the start; the real victory is the aggressive judgment enforcement that follows, ensuring your 'True Sale' actually results in a true recovery.
We leverage state legal frameworks, such as bank levies and asset seizures, to reclaim your merchant cash advance funds. As an MCA attorney, we harness the power of UCC financing statements and UCC lien acknowledgments to freeze merchant accounts, putting their cash flow in jeopardy. By directing the merchant’s debtors to release funds to our law firm, we ensure your returns are secured.
High default rates and complex merchant structures are no match for our expertise. We leverage UCC liens and lawsuits to bring merchants to the table and negotiate settlements, ensuring your funding isn’t lost.
When merchants breach MCA agreements, we sue with precision, building cases that turn violations into legal victories. Your merchant cash advance attorney in New York will fight for your rights in court and out of court.
Breaches like missed repayments or diverted sales demand action. As an aggressive plaintiff-side MCA lawyer, we don’t back down from filing lawsuits, litigating the cases, and securing judgments, paving the way for monetary recovery.
We pinpoint contract breaches, fraud or non-payment, gathering evidence as your MCA attorney. Your business deserves justice when deals fail, and we will be by your side.
In Samson MCA LLC v. Joseph A. Russo M.D. P.C. (2023), the court clarified that MCA agreements lacking absolute repayment obligations are not subject to traditional breach-of-loan defenses, a precedent we use to strengthen your case. We ensure every legal argument hits hard so that you reclaim your investment.
Summary judgment expedites recovery. In Power Up Lending Grp., Ltd. v. Cardinal Energy Grp., Inc. (2019), the court granted summary judgment by affirming the MCA’s indefinite term as evidence of a non-loan transaction, a principle we apply to secure swift judgments, minimizing delays in reclaiming your merchant cash advance investment.
Securing a courtroom victory is only the first step. At David I. Mizrahi Law, P.C., we specialize in the "exhaustion of remedies"—using every tool in the New York CPLR (Civil Practice Law and Rules) to turn a paper judgment into liquid capital.
In many cases involving an unconditional Personal Guaranty, we don't wait for a standard trial. We utilize CPLR 3213, a specialized New York motion for Summary Judgment in Lieu of Complaint. This allows us to skip the months-long discovery phase and move directly to a hearing for an expedited money judgment, saving you time and litigation costs.
The moment a judgment is entered (or even during litigation if "pre-judgment attachment" is warranted), we issue Restraining Notices under CPLR 5222.
The Impact: We serve these notices on the merchant’s banks, payment processors, and vendors to instantly freeze their accounts. This prevents the merchant from "emptying their pockets" while we finalize the collection.
If a merchant attempts to hide revenue streams or switch banks, we deploy Information Subpoenas. We compel the production of records from third parties—including banks and merchant processors—to identify:
Once assets are located, we issue a Writ of Execution to the NYC Marshal or the County Sheriff. We don't just ask for payment; we command the seizure of funds via:
In the crowded MCA space, "stackers" often attempt to prime your position. We aggressively defend your UCC-1 priority, ensuring that your "True Sale" purchase of receivables is respected by subsequent funders and that your recovery comes first in the distribution of intercepted funds.
Winning a merchant cash advance lawsuit is only half the battle. We excel at turning judgments into cash. We pursue every legal avenue, including levies, liens, and asset seizures, to ensure your merchant cash advance payout is secured.
MCA agreements often include default fees and interest provisions, which we enforce to maximize your recovery. In Parkside Funding Group LLC v. Insane Bargain 2 Inc. (2025), the court upheld the funder’s right to contractual fees, reinforcing the enforceability of default provisions in MCA agreements. We ensure your merchant cash advance contracts include enforceable fee clauses, recovering every dollar you’re owed, plus additional costs, when merchants default.
Merchants may raise defenses like lack of capacity or fraud, but we dismantle them with evidence. In K9 Bytes, Inc. v. Arch Capital Funding, LLC (2017), the court rejected a usury defense by analyzing the MCA’s reconciliation provision, a legal nuance we exploit to disprove baseless claims, ensuring your merchant cash advance judgment stands firm.
From litigating breaches to enforcing recoveries, our law firm represents merchant cash advance lenders. Contact our Principal Attorney, David I. Mizrahi, Esq. today for a free consultation to discuss your business’ needs.
As an MCA attorney, we sue merchants for breaches and enforce judgments to collect your funds. With a sharp eye on contract terms, we identify violations and maximize recovery through aggressive asset seizure and bank levies. Our litigation strategies leverage New York state laws to ensure breaches lead to liquid victories, not just paper judgments. Your merchant cash advance investment deserves this relentless advocacy.
We enforce merchant cash advance terms post-default, securing payments with relentless action. When merchants fail to pay, we use tools like UCC financing statements and UCC lien acknowledgments to lock in your claims, pursuing legal remedies to reclaim your funds. Our MCA firm ensures your contract’s repayment terms, whether daily or weekly, are upheld, protecting your capital from default risks.
We turn merchant cash advance court wins into cash, collecting debts with expert enforcement. After securing a judgment, we track hidden assets, freeze accounts, and seize funds to ensure you recover your investment. Our firm provides New York judgment enforcement services that go beyond the courtroom to locate hidden assets and trigger immediate liquid recovery. We fight to ensure your legal victory isn’t just an uncollectable piece of paper, delivering the results your business will benefit from.
New York courts use a Three-Factor Test to confirm an MCA is a 'True Sale' and not a loan: (1) a mandatory reconciliation provision, (2) an indefinite term with no fixed repayment schedule, and (3) no default triggered solely by the merchant’s bankruptcy. This distinction, upheld in cases like Samson MCA LLC v. Russo (2023), protects funders from usury claims.
MCA providers assert that their product is a purchase of future receivables, not a loan. This distinction is critical because it allows them to operate outside of traditional lending laws that regulate interest rates, including state usury laws. However, a court may reclassify the agreement as a loan if the contract is drafted haphazardly and if it fails to include certain important provisions, such as a proper reconciliation clause, and explicit statements that (i) bankruptcy is not an event of default, and (ii) there is no fixed repayment term for the advance.
Yes. Many MCA contracts require a personal guarantee from the business owner. If the business defaults, the provider can pursue the owner's personal assets, such as bank accounts and even real estate. An MCA attorney can determine if the personal guarantee is enforceable in your state.
MCA providers can seize business assets and, if a personal guarantee was signed, personal assets to satisfy the judgment. This can include freezing bank accounts, seizing vehicles, and placing judgment liens on real property.
Once an agreement is signed, MCA providers are generally not required to renegotiate the fixed factor rate or total payback amount. In fact, almost all agreements have clauses which permit funders to add collection costs to the total amount owed.
An attorney should be hired if the merchant is missing payments, becomes unresponsive, or begins dodging communication. For funders, the most effective strategy is to offload the collections work to a competent law firm early. This allows you to stop chasing defaults and focus your internal resources on growing your funding business while we handle the aggressive recovery process.