What happens if you don't pay an MCA loan?
If you stop paying, the funder may try to get a court judgment. New York's attorney general says some funders used confessions of judgment to get judgments fast and take money from bank accounts. It alleges others used arbitration clauses, then took the awards to court. Get MCA debt relief help before you miss a payment.
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MCA debt relief is easier to plan before a missed payment. New York's attorney general has sued funders over what happened after businesses fell behind. These are lawsuits, so they are claims, not proven facts.
Confessions of judgment
A March 2024 press release alleges that one funder group filed confessions of judgment in New York courts against borrowers, even those located outside of New York state, "which allowed the lenders to immediately obtain court judgments that they used to seize money from borrowers' bank accounts." Is a confession of judgment legal on an MCA? covers the state rules.
Arbitration clauses
A June 2026 press release alleges that MCA companies "buried an arbitration clause in the fine print of their agreements." It says: "The MCA companies then used the arbitration decisions they won to obtain money judgments from New York courts against struggling small businesses, giving them the power to garnish wages and seize assets."
Get help before you miss a payment
What to do when an MCA takes a daily debit has the order, and how to check an MCA relief company has the questions to ask. The Albany page covers New York's commercial finance disclosure.
This page is general information, not legal advice.
Sources
Where our facts come from
How this page was checked
- Licensed professional
- None. No licensed attorney who handles commercial finance has checked this page.
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