When a small business accepts a Merchant Cash Advance (MCA), the immediate relief of quick funding can sometimes lead to long-term legal and financial struggles. One of the most distressing situations a business owner can face is having their accounts or credit card processing systems frozen by an MCA funder. This sudden action can bring daily operations to a halt, damage supplier relationships, and threaten the very survival of the business.
Fortunately, there are legal strategies to push back and regain control. Understanding your rights and the steps to take when dealing with such aggressive actions is essential to protect your business and your financial future.
Why MCA Funders Freeze Business Accounts
MCA funders often include aggressive terms in their contracts, allowing them to take direct action if they believe a merchant has defaulted on payments or violated agreement terms. These actions may include freezing bank accounts or instructing payment processors to hold funds.
In many cases, these funders use a UCC lien to assert a legal right over a business’s assets. A UCC lien is filed under the Uniform Commercial Code and gives the lender a claim to the merchant’s property or receivables until the debt is repaid.
What makes this situation worse is that many merchants are not aware of how severe these actions can be until it happens. The result is a paralyzed business—unable to access revenue, pay employees, or fulfill customer orders.
The Legal Implications: How to Identify Abusive Practices
If your accounts have been frozen without proper notice or justification, there may be grounds for legal action. MCA funders sometimes cross legal boundaries, especially when relying on vague contract terms or making unfounded claims of default.
This is where it’s essential to evaluate whether the funder has initiated an MCA lawsuit against your business. Often, the freezing of assets is tied to legal proceedings. In such cases, acting quickly with legal representation is critical. A business attorney experienced in MCA litigation can assess the legitimacy of the funder’s claims, scrutinize contract language, and work toward getting your funds unfrozen.
The Role of a UCC Lien Attorney
A UCC lien attorney helps challenge or negotiate improper liens filed by MCA funders. If procedures weren’t followed correctly, legal action can lead to the lien being vacated or frozen funds being released. With the right legal support, you can protect your assets and keep your business running.
Building a Legal Strategy After an MCA Lawsuit
If you’re facing an MCA lawsuit, avoid signing any new agreements without legal advice—they often include terms that may harm your position. A qualified attorney can evaluate the lawsuit’s validity and explore options like negotiating a settlement, filing a motion to dismiss, or counter suing for unlawful practices. Each case requires a tailored legal approach for the best results.
Conclusion: Take Control with Expert Legal Support
Having your accounts frozen by an MCA funder is not the end—it’s the beginning of your legal defense. From challenging improper liens to navigating lawsuits, timely legal help is essential. Grant Phillips Law specializes in defending businesses from aggressive Merchant Cash Advance collection tactics. Whether you’re dealing with a UCC lien attorney issue or facing an MCA lawsuit, this firm provides the expertise needed to protect your assets and restore your business operations. Reach out today to take the first step toward financial relief and legal peace of mind.