At the Law Offices of Anthony Rumore, P.A. We are client and solution oriented, not problem oriented. We focus on resolving the legal matters and problems of every one of our clients. For us, sharing the precise nature of the legal issues with the client is just the beginning of the problem resolution process. We are determined to present our clients concrete and realistic solutions for their problems.
1318 Southeast 1st Avenue, Fort Lauderdale 33316
Commercial Debt Matters
Commercial Debt Matters
Anthony Rumore, P.A., and its attorneys have been practicing in the creditor-debtor area of the law for a great many years. Collectively, our core team of lawyers possesses more than 65 years of experience in this area of the law.
We advise our clients regarding the protection of their hard-earned assets and provide comprehensive counseling concerning the best practices for your organization to follow in order to avoid any future commercial debt issues that could negatively impact your business.
Merchant Cash Advance
Possibly, you have obtained and cannot repay an alternative financing product commonly referred to as a merchant cash advance. Following our comprehensive analysis of a client’s business and commercial relationships, we provide our clients with a detailed and specific plan of action as to the immediate, intermediate and long term steps to take to protect your assets and your business from these so called “alternative finance” companies and their aggressive collection tactics and measures.
Unfortunately, many of our clients enter into contractual arrangements with one or more merchant cash advance lenders with the expectation that the lenders will provide short term factoring receivable funding to assist our clients to meet the financial needs of their businesses between the intervals of their customer regular pay cycles. However, merchant cash advance is not traditional factoring and instead, they are considered a “purchase of future receivables.” If calculated as traditional loans, some merchant cash advances carry interest rates as high as 200% or more. If the advance is characterized as a “loan”, the incredibly high interest rates make them illegally usurious and unenforceable.
If the Merchant Cash Advance Agreement does not contain the proper legal language related to an “Unconditional” obligation to repay, “Reconciliation” mechanisms, or if a merchant cash advance agreement attempts to restrict a borrower’s ability to file bankruptcy or requires a personal guarantee from the borrower, it is possible that a court of law may find that the so called “purchase of future receivables,” is in fact, an illegal and usurious loan. If a court rules as such, the loan is legally unenforceable.
At minimum, if a merchant cash advance agreement does not meet the minimum contractual language standards, you will have strong legal defenses to put forth. This of course, will weaken the merchant cash advance company’s negotiating position, making a very favorable settlement much more likely.