Merchant Cash Advances (MCAs) can feel like a financial lifeline—until things go south. When things go south, it’s easy to feel overwhelmed. In Omaha, businesses struggling with MCAs need experienced lawyers. Lawyers who understand. Lawyers who can fight. Lawyers who can win. Let’s dive into how they do it.
MCAs as Loans or Factoring?
MCAs can seem like they’re not loans. But courts often see otherwise. But courts often see otherwise. Is it really factoring if there’s a fixed payment? Is it really factoring if there’s recourse in bankruptcy? These are questions MCA defense lawyers will use to challenge validity.
Key Insights from Kapitus v. Suburban Waste Services
In Kapitus v. Suburban Waste Services, the court decided the MCA agreement resembled a loan. A loan. Not factoring. Why? Fixed payments, lack of reconciliation, recourse in bankruptcy. In Omaha, attorneys can leverage these factors—leverage them repeatedly—to fight MCAs.
Why MCAs Can Be Loans
- Fixed payments? It’s a loan.
- No reconciliation provision? It’s a loan.
- Recourse in bankruptcy? It’s a loan.
Each of these factors undermines the argument that MCAs are factoring, and makes them subject to Nebraska lending laws.
Lack of Proper Reconciliation: Why It Matters
Without a reconciliation clause, MCAs can’t truly account for variable receivables. If a contract lacks reconciliation—it lacks accountability, it lacks balance, it lacks legitimacy. Omaha lawyers use this to show why MCAs are predatory loans.
Fixed Daily Payments: The Smoking Gun
- Fixed payments are fixed.
- Fixed payments are not flexible.
- Fixed payments do not reflect variable income.
- Fixed payments are a hallmark of a loan.
In MCA defenses, Omaha attorneys will hammer this point. Hammer it repeatedly.
Strategic Focus: Questioning MCA Legitimacy
Is the MCA truly about receivables? Or is it about fixed payments disguised as cash flow management? Omaha MCA defense lawyers focus on these questions—ask these questions often—to unearth the true nature of the MCA.
Fixed Payment Challenge
Fixed payments. They were a problem in Kapitus. Fixed payments can be a problem here. Fixed payments ignore daily revenue fluctuations. Fixed payments don’t align with actual business operations. Fixed payments must be challenged. Omaha defense teams know this.
Partial Victories Still Matter
In MCA cases, a win isn’t always a complete dismissal. A win could be a reduced interest rate. A win could be extended payment terms. A win could mean removing unfair clauses. Winning a little is still winning. Winning a little means survival.
Why Partial Wins Help Businesses Survive
- When you reduce payments—you buy time.
- When you reduce payments—you reduce stress.
- When you reduce payments—you build hope.
A partial victory is a step towards stability for Omaha businesses. Each step counts. Each win matters.
Contract Reformation: A Key Partial Victory
Reformation is reform. Reformation is change. Reformation can alter unfair terms—terms that crush, terms that bind, terms that burden. Omaha lawyers fight for reformation, ensuring MCA contracts are fairer, more flexible, more reasonable.
Debt Relief is Not a Myth
Debt relief is possible. Debt relief is achievable. Debt relief is the goal. By attacking predatory terms, by exposing unlawful interest rates, Omaha MCA defense lawyers work to secure real relief for their clients.
Unconscionable Contracts are Voidable
If it’s unconscionable, it’s voidable. If it’s voidable, it can be changed. If it can be changed, businesses have a chance. Nebraska law protects against unconscionable contracts, and MCA terms often qualify as exactly that.
Nebraska Usury Laws: Challenging MCA Interest Rates
- If it’s a loan, it’s subject to Nebraska’s usury laws.
- If it’s a loan, excessive interest is illegal.
- If it’s illegal, it must change.
Lawyers in Omaha will push to classify MCAs as loans to challenge interest rates.
Nebraska UCC & MCA Regulation
The Nebraska Uniform Commercial Code (UCC) provides protections for unfair financial practices. When MCAs fail to meet their claims, the UCC can be used to argue their invalidity. It’s a powerful tool. A tool that’s there to protect Omaha businesses.
Precedent: Kapitus and Beyond
Precedent matters. Kapitus showed us the power of examining reconciliation clauses, fixed payments, recourse provisions. Other states have followed suit. Omaha lawyers can use these precedents, argue them, expand them, win with them.
Good Faith & Fair Dealing
Every contract in Nebraska must operate under good faith. If an MCA provider acted in bad faith—hiding terms, confusing the borrower—it’s not just unfair; it’s illegal. Omaha defense attorneys will emphasize bad faith actions to invalidate contracts.
Victory for a Small Business in Omaha
A small retail shop in Omaha took out an MCA to cover inventory. The terms were suffocating—daily payments took all the profit. Their attorney fought to get payments cut in half. It wasn’t a full win. But it was enough to keep them afloat.
Bakery Case Study: Restructuring for Relief
An Omaha bakery was struggling under fixed payments. The lawyer pushed for the MCA to be reclassified as a loan. Why? So the bakery could challenge interest rates under Nebraska law. Result? Reduced rates, longer payment terms.
MCA Contracts Can Be Challenged
MCA contracts look invincible—but they’re not. They can be challenged on multiple grounds. Fixed payments. Lack of good faith. Unclear reconciliation. Each flaw is an opportunity. Each flaw is a chance to win.
Omaha’s Businesses Deserve a Chance
To fight. To win. To survive. MCA defense is about more than legality—it’s about protecting Omaha businesses, ensuring they can thrive, even when faced with predatory financial products.
