Merchant Cash Advances and Reconciliation Clauses

Small and medium businesses such as retailers, restaurants, auto repair shops, beauty salons, florists, and others face common challenges: growing their businesses, purchasing new equipment, marketing, and advertising costs, meeting payroll, and unforeseen expenses. To access working capital, they often turn to merchant cash advance (MCA) companies.  If your business is at risk of defaulting on a merchant cash advance agreement, it is time to contact Our experienced team regularly provides comprehensive cash advance relief services to businesses on a nationwide basis. Well-versed in the key provisions of MCAs, including reconciliation and default clauses, we will work strategically and diligently to protect your business and personal assets.

What Happens If My Business Defaults on a Merchant Cash Advance?

Generally, defaulting on a merchant cash advance constitutes a breach of contract, which will almost certainly result in a lawsuit putting both your business, as well as your personal assets at great risk.  Furthermore, MCA agreements usually include a confession of judgment (COJ). This legal document for all intents and purposes waives all legal defenses in the event of default. 

In addition, the cash advance agreement likely comes with another catch: the business owner will be required to sign a Personal Guarantee. Therefore, not only is the business itself in jeopardy, but the owner’s personal assets (e.g. home, savings) are also at great risk. 

In most cases, upon an event of default, the COJ allows the MCA funder to quickly obtain a Judgment against your business, and because of the Personal Guarantee, against you personally, without first having to go through the process of litigation.  Because you have already waived any legal defenses, there can be no objection to the Judgment.  Once the COJ is filed, the MCA company will begin levying your business and personal bank accounts, and may even place a lien on your home and with the help of a Sheriff obtain your other assets.

For this reason, it is crucial to act quickly if your business is now struggling to meet your payment terms of a merchant cash advance.  The sooner you contact, the sooner we can begin working to reconcile your cash advance and stave off the looming disaster. 

MCAs and Reconciliation Clauses

A well-conceived cash advance agreement will include a reconciliation clause. This mandatory provision in the agreement provides you with remedies if your future receivables decline and you are no longer able to meet the payment terms of the cash advance. 

Basically, reconciliation clauses require the MCA provider to work with you to reduce the payment amount until your receivables meet the original target.  However, in order to be eligible for the reconciliation, you must promptly notify the funder of a shortfall and provide documents confirming the decline in receivables.  If after doing so, the cash advance funder still refuses to work out a new payment plan, this may constitute a breach of contract on its part and may even convert your advance into an illegal loan.  However, MCA companies often rely on aggressive tactics to recoup their losses and attempt to pressure and bully merchants into payment terms well outside the bounds of the agreement.

Why Contact about Reconciliation Clauses?

If your business is facing an event of default under the terms of an MCA agreement, we can help. Our team of specialists is committed to helping you avoid business and personal bankruptcy, having your assets seized or garnished, and having to take on costly litigation, while also giving your business the necessary breathing room until your business recovers. 

When you consult us, we will thoroughly review your cash advance agreement, assess your current financial position, explain your rights, and explore all your options.  Our team will directly handle all communications and negotiations with the MCA company and compile the necessary financial documentation and calculations necessary to restructure and reconcile the terms of your agreement in your favor.

Additionally, if the MCA company declines to reconcile and restructure your agreement, we will use all our resources including our group of experienced MCA attorneys to obtain a result in your favor.  Additionally, because we understand the financial challenges you now face, we will provide you with a cost-effective service at a reasonable rate along with flexible payment options. 

Finally, as part of our services, we offer a subscription service that provides you with ongoing counsel to ensure you meet the terms of any cash advance arrangements going forward and will regularly intercede on your behalf until your MCA is terminated. 

At we provide informed representation and reliable relief services. To begin reconciling your merchant cash advance and protecting your livelihood, please complete the convenient intake form or just give us a call.