What Happens if You Stop Paying a Merchant Cash Advance (MCA)?
Merchant cash advances (MCAs) can offer quick access to capital, but their repayment terms often create long-term pressure. If daily or weekly drafts are draining your cash flow, you’re not alone—many business owners reach a point where payments simply aren’t sustainable.
What to Expect
When payments stop, MCA funders may:
Attempt daily withdrawals until the account balance is exhausted
Send collection notices or contact your customers directly
File a UCC lien against your business assets
In some cases, pursue personal guarantees through litigation
Because MCAs aren’t traditional “loans,” they fall into a legal gray area. Each agreement is unique, and the funder’s rights depend heavily on the contract language.
What You Can Do
Review the agreement: note how “default” is defined and what rights you granted.
Protect your business accounts: separate operational and deposit accounts if needed.
Open communication early: silence often triggers escalation.
Get professional help: MCA funders can be extremely aggressive and sometimes it is best to engage a firm like Davenport Law to help.
Bottom Line
Stopping payments doesn’t have to mean shutting down. With the right strategy, you can protect your operations while working toward sustainable resolution.
Davenport Law is Here to Help
Davenport Law reviews MCA agreements daily and can often negotiate reduced obligations or structured resolutions.
Need clarity about your situation?
Simply hit the “Contact” button at the top of this page to schedule a review with Davenport Law to understand your options and plan a path forward.
