Everest MCA Business Debt Relief

| by Max Soni

Last Updated on: 16th September 2023, 10:39 am

Finding Relief from Everest MCA Debt

Merchant cash advances (MCAs) from companies like Everest Business Funding can seem like an easy solution when your business needs fast cash. However, these short-term loans often come with extremely high interest rates and aggressive collection tactics that can trap businesses in a vicious debt cycle. If you took out an MCA from Everest and are now struggling under the weight of massive debt payments, there are solutions available to find relief.

The Appeal and Pitfalls of MCAs

Everest and other MCA lenders market themselves as a quick and convenient alternative to traditional bank loans [4]. For businesses that don’t qualify for loans or need funding faster than a bank can provide, the ease and speed of getting an MCA may seem like an attractive option. Everest claims to approve applicants within 24 hours and fund approved loans within a day [1]. For business owners in a tight spot, this can understandably be difficult to pass up.

However, MCAs like those from Everest come with a major catch. Rather than a fixed interest rate, MCAs charge an exponentially higher factor rate, often 200-500% APR or more. You pay back the loan by sending a percentage of your daily or weekly credit card and debit card sales to the lender until the full amount plus the factor rate is repaid [4]. This structure means you end up paying much more in interest than you originally borrowed.

For example, if you get a $50,000 MCA with a factor rate of 1.35, you’ll end up paying $67,500 total – $17,500 of which is interest. And because payments are taken directly from your sales revenue, MCAs can quickly drain a business’s finances, making it difficult to cover other expenses like payroll, rent, utilities, and inventory.

Everest MCA Horror Stories

Many business owners have shared cautionary tales about getting trapped in Everest’s debt spiral. A pet supply store owner took out a $58,000 MCA and soon found themselves sending 25% of every credit card sale to Everest while struggling to keep the business afloat [2]. A pizzeria signed up for $28,000 in MCA funding from Everest and saw their payments skyrocket to over 50% of their daily revenue. They ultimately had to close their doors due to the crushing debt payments [3].

These stories highlight how easy it is to get in over your head with an MCA. While Everest markets its products as flexible and easy to qualify for, it fails to properly warn applicants about the astronomical true cost. Everest also makes it sound like repaying early will save you money, when in reality the factor rate means you pay the full interest regardless of how quickly you repay the principal [4].

Aggressive Collections

If your business falls behind on payments, Everest is known to deploy aggressive collections tactics like harassing phone calls, lawsuits, and even sending people to your business location to demand payment. They will continue extracting payments for as long as possible, even if it’s clearly putting you in financial peril.

In one case, Everest sued a business owner who was struggling to keep up with high payment amounts after a family emergency. Despite the owner’s hardship, Everest refused to work with them and continued to pursue legal action [3]. This kind of merciless collection approach can sink businesses that would have otherwise recovered after a temporary setback.

Fighting Back Against Everest

If you feel trapped in a predatory Everest MCA, the good news is that you can fight back. An experienced business debt relief attorney can help you take on Everest and regain control of your finances.

Your attorney will first review your MCA agreement to look for any illegal or unenforceable provisions. For example, some states have laws capping MCA interest rates, so if your factor rate exceeds that cap, those charges may be invalidated [6].

Next, your attorney can put negotiations with Everest on more even footing and potentially secure a settlement. Everest usually has the upper hand in dealing directly with struggling business owners, but they may become more reasonable when your attorney gets involved. If a fair settlement can’t be reached, your attorney can defend you if Everest pursues legal action over the debt.

Additional Strategies and Defenses

Here are some other strategies a knowledgeable attorney can use to counter Everest’s underhanded tactics:

• Disputing the debt amount by auditing Everest’s payment records for inaccuracies
• Challenging venue if Everest sues you outside of your home state
• Asserting counterclaims for predatory lending or other illegal practices
• Claiming the MCA agreement is invalid due to deception or fraud
• Seeking damages for Everest’s unfair collection activities

With an attorney well-versed in debtor protection laws on your side, you can go from being at Everest’s mercy to being in a position of strength.