Kansas Merchant Cash Advance Attorney
Kansas Merchant Cash Advance Attorney – Your Guide to MCA Financing
Hey there! If you’re a Kansas small business owner looking into merchant cash advances (MCAs), you’ve come to the right place. I know this stuff can be confusing, so I wanted to write up a guide to walk you through everything in a simple way.Let’s start with the basics – what is a merchant cash advance? Well, it’s a form of business financing where a company gives you an upfront lump sum of cash in exchange for a percentage of your future credit card sales. I like to think of it as an advance on future revenue rather than a loan.MCAs have become really popular because they provide fast access to capital. The approval process is quicker than a traditional bank loan, and you don’t necessarily need good credit or collateral to qualify. For a lot of business owners, MCAs are the only financing option available when they need money fast.But these advances come at a cost (literally). The fees and interest rates are much higher than a bank loan. So while MCAs are easy to get, they’re also expensive. You need to fully understand what you’re getting into.That’s where working with an experienced Kansas MCA attorney can help big time. They can review the MCA contract and make sure you’re not getting ripped off. I’ll explain more on that later. First, let’s look at how MCAs work…
How Do MCAs Work?
There’s a few key things to understand about the MCA process:
- Upfront lump sum – The MCA company will provide you with a lump sum payment upfront, usually between $5K – $500K. This provides quick access to capital.
- Fixed daily/weekly payments – You pay back the MCA by allowing the company to take a fixed percentage of your daily or weekly credit card sales. A typical range is 10% – 20% of sales.
- Payments continue until repaid – The payments keep going until you’ve repaid the full MCA amount plus fees and interest. This takes a few months usually.
- MCAs aren’t regulated like loans – This is important! MCAs aren’t treated as loans under the law. So they don’t have to follow lending rules like disclosing APR.
The quick access to money is nice, but those daily payments can really hurt if business is slow. And a lot of MCA companies use predatory tactics – that’s where legal help comes in handy!
Pros and Cons of Merchant Cash Advances
MCAs offer some nice perks but also some big drawbacks to think about:Pros
- Fast funding based on sales, not credit
- Qualify easier than a bank loan
- Get lump sum upfront
- Very high fees and rates
- Daily payments are fixed amounts
- Can impact cash flow
- Short repayment terms
You really want to crunch the numbers to see if an MCA makes sense for your biz. Don’t just jump on the first offer!
Why Work with a Kansas MCA Attorney?
Having an experienced Kansas attorney review your MCA agreement is so important. Here’s some key ways they can help:
- Review contract terms – Make sure no predatory or illegal terms snuck in.
- Explain legal rights – They’ll advise you on your rights under KS laws.
- Negotiate better rates & terms – Often can negotiate a better MCA deal.
- Out if you get sued – Provide defense if an MCA company sues you over the agreement.
- Explore alternatives – May find better financing options than an MCA.
Don’t sign an MCA contract without legal review! It can save you big time headaches down the road.
Kansas MCA Laws and Regulations
Like I mentioned earlier, MCAs aren’t treated as loans under Kansas laws. Here’s some key regulations though:
- MCA companies must register with the state banking department.
- There are limits on fees and interest rates MCAs can charge.
- Required disclosures on repayment terms, costs, etc.
- Prohibits unreasonable default clauses.
- Can’t make you waive legal rights.
So there are some consumer protections at least! Again, you want an attorney verifying the MCA company follows all Kansas laws. Don’t trust them at their word.
To give you a better idea of how MCAs work (and sometimes don’t work), let me share a couple real-world examples:Carla’s CateringCarla needed $20K fast to purchase some new catering equipment. She got an MCA but after a few months realized she couldn’t afford the daily payments plus her other expenses. Even though business was slow, the payments stayed the same.The MCA company started threatening Carla with a lawsuit. She ended up having to take a second MCA just to pay off the first one! Now Carla is buried in even more debt and struggling to keep her catering biz afloat.Bob’s BurgersBob also took an MCA for $50K to do renovations on his restaurant. But Bob was smart – he had a Kansas attorney review the agreement first.The attorney found lots of hidden fees and an absurd 120% APR! She renegotiated the deal with much lower rates. When the MCA company later tried suing Bob over a missed payment, his lawyer got the case dismissed.Bob wishes he never got the MCA, but at least having legal help saved him from being taken advantage of even worse.So as you can see, MCAs come with plenty of pitfalls! But working with an experienced attorney can make a huge difference.
MCAs let Kansas small businesses access fast financing, but at a steep price. Before signing an MCA agreement, partner with a Kansas attorney experienced in these transactions.They can review the contract terms, explain your rights under state laws, negotiate better rates and fees, and provide counsel if any issues crop up down the road. MCAs involve a lot of legal nuances – don’t go it alone!I hope this guide gave you a helpful overview of merchant cash advances in Kansas. Let me know if you have any other questions! I’m always happy to help business owners make smart financing decisions. Here’s to your success!