Infinity Capital Lawsuit: 6 Defenses Worth Raising in Your Answer

If you are being sued over a merchant cash advance, the defenses worth raising are objections to jurisdiction or service, clauses about forum or arbitration, a wrong balance, arguments that the MCA was actually a loan governed by usury, the refusal of the MCA firm to provide reconciliation, and challenges to personal guarantees. They do not all come up in every case. None is slam-dunk. And you usually need to put in any affirmative defenses in your answer.

Infinity Capital Funding is listed by one law firm as a funding company for MCAs. Its address is listed as being in Woodland Hills, California, though a lawsuit may still be filed in New York state. A telephone call or settlement talks with Infinity Capital do not by themselves extend the court deadline for your answer.

1. Challenge service and jurisdiction

Gather all the paperwork. See if it was properly served on you and on your company. (Each needs to be properly served.) In New York state court, the response deadline to an MCA lawsuit is 20 days if you were handed the papers within the state. If you were served by any other method (a copy left at the door, for example), the time to answer is 30 days after service is complete. Simply being located outside the state is not enough for a dismissal. By law, certain objections can be lost if you do not object promptly, so don’t overlook the deadline.

2. Read the forum and arbitration clauses

You may have agreed to submit any disputes to arbitration or for the courts in another state. There’s a difference between where the case is heard and which state’s law governs the case. And arbitration, though often promoted as fair and economical, is not always so. In June 2026, the New York Attorney General filed suit against the arbitration platform Rapid Ruling, alleging that it was set up to favor MCA funders. According to the AG, 97% of the arbitrations in roughly its first three years went ahead even though there was no appearance by the small business defendant.

3. Dispute the balance

Do you owe the MCA company what it says? Gather up the receipts, the disclosures, the MCA contract, including the repayment schedule, and the other paperwork. It may be necessary to examine the business’s bank records to find out what the proper total is. Compare the amount advanced, the amounts collected, any credits, any returned debits, and any fees charged. A claim that you owe a balance doesn’t prove it’s correct. Payment is an affirmative defense you have to raise in a New York answer. Sometimes an MCA agreement is bought or transferred to another company and it is that other company that comes to court. Check whether that other company had the right to collect on the agreement.

4. Argue it is really a loan

Look for clues that it is a loan, governed by usury laws that prohibit excessive interest. A contract called a merchant cash advance is not a merchant cash advance simply because it is labeled one. New York courts have usually turned to 3 questions to decide: Is the repayment based on a reconciliation provision (a way of periodically comparing the amounts expected with the amounts collected)? Is there a finite term? Does the funding company keep some recourse if the merchant goes bankrupt?

There’s more than one kind of usury law. As a corporation, you usually cannot use the interest rate law that applies to individuals to fight back an MCA lawsuit in New York. You can, though, sometimes raise the criminal usury law that bans a lender from knowingly charging above 25% interest a year on a loan. In June 2023, the US Court of Appeals for the Second Circuit upheld a ruling that a merchant cash advance was actually a usurious loan, in part because reconciliation was always up to the funder. The argument that a merchant cash advance is actually a usurious loan can win but it can lose too. In Principis Capital v. I Do, Inc. (2022) a New York appeals court gave the funder summary judgment and threw out the merchant’s defenses and counterclaims. Let a lawyer experienced in MCA defense go over these, because it depends on the facts.

5. Point to a refused reconciliation

Have you asked for a reconciliation? If so, when? What happened? Check your records for emails or texts that you sent asking for adjustments. Did you provide the documents the funder asked for? Look for any proof of changed circumstances or a drop in revenue. The question is to what extent, and how promptly, the funding company worked with the business to review revenue and adjust what the business would owe. A reconciliation provision isn’t clear proof that it is a real MCA if the funder refused to do it. Gathering up these facts is the necessary groundwork for objecting that the contract was not followed.

6. Test the personal guarantee

If your case has a claim against you individually under your guarantee, locate that document. It’s important to see what conduct supposedly triggered it and whether it is a guarantee for payment or only for specific performance. It is important to review the position of the business and the owner separately and to see whether different lawyers are needed.

Default Judgment or a Confession of Judgment

In some instances you can get relief even though there was a default judgment or a confession of judgment. It depends on the facts. Get the court record checked out as soon as possible. Even when a merchant cash advance seller comes in with a confession of judgment, that doesn’t end the matter. A confession of judgment can be filed in New York only in the county where the defendant lives or has a business and only within 3 years of signing. Relief is not guaranteed. A settlement could be a choice, but it is worth weighing that alongside your defenses.

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.