Spg Advance Litigation: 5 Reasons Default Judgment Is the Real Risk

SPG Advance is a funding company specializing in merchant cash advances. One $250,000 funding example worked like this according to a 2024 Ohio case in which SPG was one of a group of alleged related funders: SPG allegedly advanced $250,000.00 with repayment due in two months. If SPG sues your business, your real danger lies in not losing at trial but in getting a default judgment. If you fail to hire an attorney, you run the risk of an adverse default being entered against your company. Failing to respond is typically fatal to any defenses your business may have. Such a judgment opens up your entire business to the merchant cash advance funder. The funding company’s lawyers can freeze your bank account, attach cash owed to you, and execute on your corporate assets.

1. Everything gets admitted

When a default is entered against you, all the contents of the underlying complaint will be deemed admitted as accurate. This means that a miscount of the balance, improper interest rates, unaccounted for payments - all of that gets waived and effectively admitted as true and correct. When you miss the deadline to respond, and the claim is for a fixed sum, the clerk of court can enter judgment for the full amount alleged owed, plus interest, plus costs - all without a judge ever hearing or seeing the case. A winning defense, an inadmissible claim, an untimely suit, an improper venue - none of that matters.

2. The clock is short

If the lawsuit was filed in New York and it’s served by a process server who hands it to you personally, you will have twenty days to answer or appear. If the summons is served on the Secretary of State, or outside New York, you have 30 days, and the time starts to run when service is complete.

Many people get process served by a process server who leaves a copy with a coworker, employee, or relative, and then sends a copy by mail. People get confused when they see the papers taped to the front door and then mailed to them, because they start counting from that day. Then the process server files his affidavit within twenty days saying what he did. Service is considered complete ten days after the process server files their proof with the court, after doing the taping and mailing. After service is complete, the 30 days run to answer. Check the court file to be sure; do not guess.

3. Your company needs a lawyer

New York requires a corporation to appear through an attorney. (Small claims cases don’t count. This is about lawsuits in New York Supreme Court.) The company owner cannot file on behalf of the company without running into trouble.

Your merchant cash advance funder can sue you personally if you signed a personal guaranty. In that case, they must mail a second copy of the summons (stamped “personal and confidential”) at least 20 days before a default, which they don’t need to do for the company. You need to track the filing of service and the running of the time, because only by serving a response or appearing in court can you protect your rights.

4. Collection moves fast

The lawyer for a funder holding a money judgment can send your bank a restraining notice, without needing any court order beforehand. That freezes your account for up to one year. Note that business judgments in New York carry 9% interest per year, not the 2% that consumer debts get. They can record the judgment to create a lien on real estate, they can freeze bank accounts, they can seize assets and property through the Sheriff, they can garnish accounts owed to you. A judgment in New York is presumed paid after 20 years, but that clock restarts if any payment is made.

5. Undoing a default is hard

Getting around a default is difficult. In New York you can make a motion to vacate a default within one year of having been served with the judgment and notice of entry. Nobody guarantees a court will excuse a default. No matter the merits of your case, the court may be unimpressed. Undoing a default costs far more than simply responding to the lawsuit on time.

In New York, if you didn’t get personally served with the summons and didn’t receive notice of the suit, the court may let you defend within one year after learning of a judgment, but no later than five years after entry of the judgment. You must show a meritorious defense to the original claim.

Immediate Actions

If you were served by SPG Advance, you should take several immediate actions. Check the complaint to know the time to appear and file an answer, and make sure you have a precise count of days. Gather all correspondence and particularly any written agreement (paper copy or electronic) which confirms your agreement to repay the advance of funds. There is a distinct benefit to responding or settling before collection activity starts.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.