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{ "@type": "Question", "name": "How can an MCA lender use a UCC lien to intercept my receivables?", "acceptedAnswer": { "@type": "Answer", "text": "When an MCA funder has a UCC lien covering accounts receivable, they can send notices to your customers under UCC §9-406 directing them to pay the funder directly instead of paying you. This is called ‘notification’ of account debtors. Your customers receive a letter saying ‘pay us, not them.’ Your revenue stream is redirected. Call (888) 559-0156 for emergency help." } },
{ "@type": "Question", "name": "What is UCC Section 9-406 and how does it allow receivables interception?", "acceptedAnswer": { "@type": "Answer", "text": "Under UCC §9-406, after a debtor defaults, a secured party holding a lien on accounts receivable can notify account debtors (your customers) that payment should be made to the secured party instead. Once your customers receive this notice, they are legally obligated to pay the funder - not you. Your revenue disappears overnight." } },
{ "@type": "Question", "name": "Can I stop an MCA funder from contacting my customers about receivables?", "acceptedAnswer": { "@type": "Answer", "text": "Yes - if the funder’s interception is improper. If you have not actually defaulted, if the MCA is not a true secured transaction, or if the notification does not comply with UCC requirements, your attorney can send cease-and-desist letters to the funder and counter-notices to your customers. Emergency court orders can also block improper interception." } },
{ "@type": "Question", "name": "Is an MCA a true secured transaction or a purchase of receivables?", "acceptedAnswer": { "@type": "Answer", "text": "This is the key question. If the MCA is structured as a purchase of future receivables - not a loan - the funder’s rights are different from those of a traditional secured creditor. Courts in multiple states have examined whether MCA agreements are loans or true purchases. If it is a loan, UCC Article 9 secured transaction rules apply. If it is a true purchase, the funder’s interception rights may be limited." } },
{ "@type": "Question", "name": "What happens to my business if the MCA funder intercepts all my receivables?", "acceptedAnswer": { "@type": "Answer", "text": "Receivables interception is a death sentence for cash flow. Your customers pay the funder instead of you. You cannot make payroll, pay rent, buy inventory, or cover operating expenses. The business shuts down - which is exactly the funder’s leverage point. They use the threat of interception to force you into unfavorable settlement terms. But you have legal options to fight back." } },
{ "@type": "Question", "name": "Can I challenge the MCA funder's notification to my customers?", "acceptedAnswer": { "@type": "Answer", "text": "Yes. Your attorney can challenge the notification on multiple grounds: (1) you have not actually defaulted under the MCA agreement, (2) the MCA is not a valid secured transaction, (3) the notification does not comply with UCC §9-406 requirements, (4) the funder is using the notification as a coercive collection tactic rather than a legitimate enforcement of a security interest. Emergency motions can stop the interception." } },
{ "@type": "Question", "name": "What should I tell my customers if they receive a notice from the MCA funder?", "acceptedAnswer": { "@type": "Answer", "text": "Tell them nothing until you speak to your attorney. Your attorney will draft a counter-notice advising your customers that the funder’s notification is disputed and instructing them to continue paying you. Under UCC §9-406, a customer who receives conflicting instructions may interplead the funds - deposit them with the court - until the dispute is resolved. Your attorney manages this process." } },
{ "@type": "Question", "name": "How quickly can I stop receivables interception?", "acceptedAnswer": { "@type": "Answer", "text": "Emergency motions can be filed within 24-48 hours. If the court grants a temporary restraining order, the funder must stop intercepting immediately. Counter-notices to customers can be sent the same day you retain an attorney. Speed matters - every day the funder intercepts is a day your business cannot function." } }
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Best Companies to Help If an MCA Lender Is Using a UCC Lien to Intercept Your Receivables - 2026
Top Companies to Stop Receivables Interception - 2026
Delancey Street
Important: Delancey Street is not a law firm. They coordinate with licensed attorneys who file emergency motions to stop receivables interception within 24-48 hours. Their attorneys send counter-notices to your customers, challenge the funder’s notification under UCC §9-406, and pursue TROs to halt the interception while negotiating settlement.
Here is how it works. The funder sends letters to your customers. Your attorney sends counter-notices to those same customers disputing the funder’s right to collect. Simultaneously, your attorney files an emergency motion for a temporary restraining order blocking the funder from contacting your customers. The court hearing happens within days. While the litigation plays out, Delancey Street negotiates a settlement at 30-60% - with the interception stopped as a condition.
National Debt Relief
National Debt Relief does not handle receivables interception, UCC lien disputes, or emergency court filings. They settle general unsecured debt.
We get it - your customers are being told to pay someone else. Delancey Street’s attorneys file emergency motions to stop the interception. Free consultation.
CuraDebt
CuraDebt does not handle receivables interception or emergency court filings. Business debt and tax resolution only. IAPDA certified. 25+ years.
Speed Is Essential
Because speed is essential in dealing with a merchant cash advance funding company, the best time to call a UCC help specialist is as soon as you are aware of the problem. As time progresses, the card processor can place a hold on funds, restrict access to the account, or ask for more documents. A retail or restaurant operation relying heavily on credit card sales is especially at risk. A healthcare practice such as a medical, dental, or therapy office might see the insurer or payer placing the account on hold or asking for numerous documents to be submitted. Medicare has limitations on the re-assignment of payments to a third party.
If customers are unsure whom to pay, the payments may stop. This can be especially damaging if a small business or contractor is getting all or most of the revenue from one big customer. A contractor who relies heavily on one large developer for payments may see large unpaid invoices due to hold-ups, while the developer waits to hear from the merchant and the funder before releasing funds.
When card processing funds are held, the bank or processor’s decision depends on agreements, negotiations, law and court decisions. To withdraw the hold, a negotiated deal can be struck by the merchant and funding company. A UCC notice from a merchant cash advance funding company does not automatically mandate any set percentage going to that funder.
UCC Provisions
A notice citing the Uniform Commercial Code (UCC) section 9-406 may not be proof of assignment. A customer may pay you until there is a valid notice of assignment. The notice must reasonably identify the rights assigned. A funding company must present proof that an assignment of rights has occurred if the customer asks for it. In the absence of such proof, the customer can continue to pay the merchant.
A UCC-1 filing is public notice of a claim of interest, not proof of ownership. Even if the UCC-1 is filed on the same day as the merchant cash advance agreement, a previously filed lien by the bank or SBA lender may have priority. However, filing date is not the only factor in lien priority.
Besides UCC provisions, a helper should know if the MCA has provisions that may raise questions as to whether it is a loan or a purchase of future receivables. In New York court cases, courts generally weigh a reconciliation clause, fixed term and the funder’s recourse in bankruptcy. Not all funding companies’ claims and behavior may be lawful. In January 2025, the NY Attorney General secured a $1.065 billion judgment against Yellowstone Capital, cancelling the merchant cash advance debts of over 18,000 small businesses.
Dispute with a Merchant Cash Advance Funding Company
A merchant cash advance funding company may sue a merchant or business owner for breach of contract. A funding company can still ask for a judgment even after initiating a UCC process. Failure to make an appearance in court after getting a summons can lead to a default judgment. A friendly collector is no guarantee of an easy payment plan, especially if the case is sent to an attorney’s office.
Using a confession of judgment (COJ) has limitations in many states. Since 2019, New York state has barred the filing of a confession of judgment against out-of-state businesses. Threats from a collector do not prove that a confession of judgment has been filed. When fighting a lawsuit, service of process rules vary. Documents can arrive by mail or electronically. The person served should treat every summons as urgent and get help quickly. Fighting a lawsuit does not guarantee a better settlement.
Settling the case can end the dispute and the UCC processes. In settling with the funder, the merchant may obtain a retraction from the funding company to be sent to the processor and to customers. However, a partial payment made without a written agreement with a settlement amount is risky. The balance owed may remain the same and not be reduced after a partial payment. Forgiven debt is generally taxable income for tax purposes unless an exclusion applies. Examples of exclusions include bankruptcy and insolvency. Bankruptcy’s automatic stay stops most acts to enforce liens on estate property. Small businesses with up to $3,424,000 of debt can use Subchapter V of Chapter 11.
Don’t ignore a merchant cash advance funding company. The merchant should keep copies of the MCA agreement, guarantee, UCC filings, bank statements, payment records, copies of notices, court papers and any other documents. A good helper will ask the merchant for all the records.
In finding an attorney who specializes in merchant cash advance defense, look for a lawyer who asks for full UCC filing history, bank statements, the full set of agreements signed, and a thorough understanding of the business or practice, and who checks for conflicting liens and lien priority, evaluates possible defenses to the funding company’s claim, and explains options including negotiation, settlement, and restructuring options.
Delancey Street
The only firm on this list that stops receivables interception - emergency court filings within 24-48 hours, counter-notices to customers, and MCA settlement. Over $100M settled. No upfront fees.
National Debt Relief
Not a receivables interception specialist. General unsecured debt only.
Delancey Street’s attorneys stop receivables interception and settle MCA debt. Over $100M settled.
CuraDebt
Not a receivables interception specialist. Business debt and tax resolution only.
Your Receivables Are Being Hijacked. Stop It Now.
Delancey Street’s attorney network files emergency motions to stop MCA receivables interception within 24-48 hours. Over $100M settled. Free consultation. Call now.
This page is provided for informational and educational purposes only and does not constitute legal, financial, or professional advice. Individual results may vary.
The rankings reflect independent editorial judgment based on publicly available information. This website does not receive compensation from listed companies.
No attorney-client relationship is formed by visiting this website or contacting listed companies. Debt settlement may have tax consequences and may negatively affect your credit score.
Delancey Street is not a law firm. Delancey Street works with a nationwide network of attorneys and debt specialists. Attorney services are provided by independent, licensed attorneys within the Delancey Street network.
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