2026 Best MCA Defense Lawyers in South Carolina

Top MCA Defense Firms for South Carolina Businesses - 2026

Answering the Initial Lawsuit

The deadline for answering a Merchant Cash Advance lawsuit is typically 20 to 30 days after the funder has served you with a complaint and summons. An MCA funder can serve you either by mail or by having a copy of the summons and complaint served on your agent for service of process. If you miss the deadline your creditor can get a default judgment against you without even having to show up to prove that you owe them anything. An out-of-state MCA funder that gets a judgment against you in its home state can have that judgment filed against you in South Carolina. This gives you 30 days to seek relief from the foreign judgment.

If you lose by default, the funder can freeze your business bank accounts, enforce its UCC lien and go after you personally if you signed a personal guarantee. If you’re in South Carolina, the recorded judgment will act as a lien against your real estate for 10 years. You may be able to get these defaults undone, but that’s a much more complicated process than just answering the initial lawsuit.

The Defenses Available to You

Reviewing every possible defense before filing your first response is what separates a good MCA lawyer from a merely available one, especially when you can lose by default. The defenses available to you depend on your contract, your payment history and the state where your case was filed. If the right ones aren’t raised at the start they’re often lost forever.

First, a good MCA lawyer considers whether the deal really is an advance that isn’t subject to usury law or is in fact a loan. MCA contracts are sold as purchases of future receivables and therefore not subject to laws capping interest or fees. However, fixed daily payments regardless of the businesses’ revenue plus a personal guarantee plus confessions of judgment can convince a judge that this is actually a loan.

These deals are often made under New York law, which has a criminal usury cap of 25% a year, while the effective rates of the deals are often well over 100% a year. If recharacterized as loans, then even if you did sign it, they can be unenforceable. In fact, in January, 2025, the New York Attorney General won a $1.065 billion judgment against a major MCA funder, Yellowstone Capital, which canceled over $534 million owed by over 18,000 small businesses. The case turned on fixed daily payments.

Typically, an MCA agreement has a reconciliation clause to adjust the daily payment in proportion to a decline in revenue. However, many funders ignore, stall, or trim only a token amount. If you keep written requests and responses showing the funder’s refusal to adjust to a drop in revenue, you can show that this was never really a percentage deal.

A confession of judgment can be very dangerous. It lets the funder enter a judgment against you with no notice or hearing. Since Aug. 30, 2019, confessions of judgment filed in New York State can only be filed in the county where the signer lived when signing the agreement, or where they live when the judgment is filed. But in South Carolina, it can only be entered against you if they have a written statement that you signed under oath verifying that the debt is due, including the amount and the facts showing it is justly due. If the MCA funder didn’t follow this process, the confession could be grounds for vacating the judgment.

Improper service is another defense that often works. Papers sent to an old address or the wrong person may get the case thrown out. Poor wording of a guarantee can leave you owing only for misconduct. A broker’s quoting you a different number can be grounds for a counterclaim.

First Legal Consultation

Before you call your lawyer, gather

• the original MCA agreement and addenda;
• bank statements for the repayment period;
• reports from card processors;
• all emails, texts, letters and other written communication from the MCA funders to you;
• the lawsuit papers and the envelope they came in.

Don’t empty your accounts or open new ones as a way of hiding them; that can be evidence of a fraudulent transfer. Don’t call the MCA funders; they can use anything you say against you.

For stacked MCAs, remember that each is a separate contract with its own terms, reconciliation language and defenses. A suit by one funder doesn’t settle what you owe the others. If you have more than one MCA, bring every one to your first legal consultation. That way you can have a clear picture of the entire situation.

As for cost, stay longer than the first 30 minutes or hire the lawyer and you pay their normal fees. Referral lawyers do not handle pro bono cases. In South Carolina, rule 1.5 says lawyer’s fee must be reasonable and the lawyer should explain the fee basis. It recommends that the fee be in writing. A contingent fee agreement must be written, signed by the client and state how the fee is calculated.

A solid answer is often what gets the MCA funder to negotiate, while a weak paper trail argues for a settlement. If the contract has a mandatory arbitration clause, the litigation strategy changes, but the underlying defenses remain the same. And never accept a new agreement under pressure, or without talking to a lawyer about that deal first. It may include confessions of judgment, giving the MCA funder extra advantages.

One more warning. Taking an MCA to pay off an existing one almost always makes things worse, and the date on your summons won’t wait. The sooner a lawyer reviews the agreement, payment history and communication, the more options will stay open.