2026 Best MCA Defense Lawyers in New York City, NY

Top MCA Defense Firms Serving New York City - 2026

Whether Your MCA Is a Loan

In your case the key is whether your MCA is a loan or what the law calls a ”true sale”. The courts are going to look hard at any reconciliation clause and whether there is a fixed end date for payments, and at what happens if you default and your business goes bankrupt. A contract is called a loan only if you must repay the money no matter what. What is the strongest sign that your contract is a loan? That’s when they take a fixed daily debit, the exact same amount every single day, and they make no exceptions whether your business made $10,000 in sales one day or $100.

Any reconciliation clause sounds nice in theory, but you gotta read the fine print. Some are helpful but a lot of ‘em are useless. So, is it in your contract that they have the sole discretion when it comes to reconciliation, to approve or deny? If you are denied, put it in writing, document it. In a genuine purchase of receivables, there is no end date to the contract. When you see a term like “estimated 6 months,” that looks much more like a loan.

So now you see the stakes: if your document is a loan, you might be paying a criminal rate of interest. In 2021 New York’s highest court ruled that a merchant borrower may indeed argue a defense of criminal usury, meaning interest more than twenty-five percent a year.

To know your rate, divide the repayment amount by the amount you took up front. For example, let’s say your cash advance is $100,000 and you’re on the hook to pay back $135,000. Here your factor rate is 1.35. Over six months that would come out to about seventy percent interest a year. Factoring at a 1.4 rate for four months, however, that’s now like paying one hundred and twenty percent interest, which is a very hard rate to pay.

Some rates go far higher. In January 2025 New York’s Attorney General announced she won a $1.065 billion judgment against a merchant cash advance company named Yellowstone Capital LLC. The AG called Yellowstone’s products loans, with rates of up to 820 percent interest a year. The AG’s office says Yellowstone has forgiven approximately five hundred and thirty-four million dollars in merchant debt. Payments went out April 3, 2026. My suggestion is that if you had a contract with Yellowstone Capital LLC, check your mail.

The Boilerplate

Several of these lenders use what’s called a confession of judgment clause to get their judgment against you. A confession of judgment clause means the other side gets judgment with no lawsuit, no notice, no chance for you to put in a defense. To me it’s the most dangerous and unfair clause in the world, and in 2019 New York banned confessions against out-of-state defendants. CPLR 3218 limits where the lender can file its confession of judgment document. Generally the plaintiff can only use the COJ form in the county you listed as your residence inside the affidavit when you signed the contract, or they can use it where you’re living now, and only within three years of the time you signed your affidavit of confession.

Lenders typically also put in a lien on all business assets. They might even take out a UCC-1 filing against your business. But if you’re selling receivables, why does the buyer need security to buy receivables? It’s because the big financiers aren’t thinking about a sale, they want a guarantee that you’ll pay them back. My opinion is that a UCC-1 really doesn’t belong in an agreement that’s truly a “true sale” of receivables.

Did you sign a personal guarantee as well? It means they can chase your own personal assets, such as your home or bank account. In my experience many so-called personal guarantees are not what they seem. All they cover is your truthfulness and cooperation; not the full dollar amount.

Also, default in these agreements doesn’t just mean that you missed a payment or two. It could be that you took financing with another lender, or you opened a new bank account, or you’re seeking legal help. That’s what a lender cares about.

Have you signed away your right to a jury trial? You’d be surprised at the number of contracts with a waiver written right into the boilerplate. When you give up a jury trial, that means the judge alone decides the case. Did you sign an arbitration clause? If so, you might be in luck. Some arbitrators take a long, hard look at the whole contract and how it was created.

Retaining an Attorney

In New York City the Bar has what they call their Legal Referral Service, if you think about retaining an attorney. For a $35 fee they give you a referral for a first consultation up to 30 minutes in length. For some categories of cases the referral costs you nothing. And for your consultation, bring your written contract with you. Do they read the contract closely and start explaining it? What are the top two or three flaws they see in the contract? Can the lawyer cite which New York court cases might help you? Ask how they charge, by the hour, by the task, on a flat fee?

If you have a fee fight with your lawyer, take a look at New York’s fee dispute resolution program, Part 137. It will cover claims from $1,000 to $100,000. The Part 137 cap was fifty thousand dollars until November 1, 2026.

Whoever you hire, write down every flaw you find in the contract. They may sound minor but every one is a defense, and a bargaining chip. The more flaws you can spot, the less likely it is they’ll even sue you. The more invalid the paperwork, the likelier the funder will settle for a fraction of what they claimed.