Best Companies to Help If You Block MCA Payments in California — 2026

Top Companies for California MCA Payment Defense — 2026

Blocking MCA payments without a legal strategy is dangerous. The funder will come after you — with UCC liens, COJ filings, lawsuits, and bank restraining notices. These three firms help California business owners fight back with real legal defenses. Your search ends here.

California SB 1235: The Disclosure Weapon Most MCA Funders Ignore

California Senate Bill 1235 — signed into law in 2018 and codified as Cal. Fin. Code §22800–22805 — changed everything for California business owners facing MCA debt. Here is what it requires.

Mandatory disclosures. Every MCA funder extending financing to a California business must provide: (1) the total dollar cost of the financing, (2) the total amount of funds provided, (3) the total dollar cost expressed as an annualized rate (APR equivalent), (4) the payment amounts and frequency, and (5) a description of prepayment policies. These must be provided in writing before the business owner signs. Period.

Why this matters. Most MCA funders never provided these disclosures. They handed you an agreement with a factor rate — say 1.35 — and never translated that into an APR. That factor rate on a 6-month advance? It translates to an APR of roughly 70–120%. On a 3-month advance? Easily 150–300%. The funder does not want you to see that number. Under SB 1235, failing to disclose it is a violation enforceable by the California Department of Financial Protection and Innovation (DFPI).

How your attorney uses it. SB 1235 violations give your attorney ammunition in two ways: (1) as a defense in any collection action — the funder cannot enforce a contract obtained in violation of state disclosure law, and (2) as a basis for a complaint to the DFPI, which can investigate and take enforcement action. That regulatory pressure often pushes funders toward settlement.

Article XV: California’s Constitutional Usury Cap

Article XV of the California Constitution sets the maximum interest rate at 10% per year for non-exempt lenders. Banks and licensed finance lenders are exempt. Most MCA funders are not.

The reclassification argument. MCA funders say their product is not a loan — it is a purchase of future receivables. That distinction matters because usury laws only apply to loans. But California courts look at the economic reality, not the label. If the MCA agreement has fixed daily payments (not a true percentage of actual receivables), a fixed repayment term, a reconciliation provision the funder never honors, or a personal guarantee — courts can reclassify it as a loan. And once it is a loan, the 10% cap applies.

What happens when it is reclassified. The entire agreement becomes void under California usury law. The funder is not entitled to any interest — only principal. In some cases, the borrower can recover treble damages (three times the interest paid) under Cal. Civ. Code §1916-2. That is not a typo. The funder could owe you money.

What Happens After You Block ACH Payments

You revoked the ACH authorization. The daily debits stopped. Now what? Here is the funder’s playbook — and how to counter it.

1. The funder files a UCC lien. Most MCA agreements include a security interest in your business receivables. The funder files a UCC-1 financing statement with the California Secretary of State. This puts other lenders on notice but does not freeze your bank account. It does, however, make it harder to get new financing.

2. The funder sends a restraining notice to your bank. This is different from a UCC lien. A restraining notice (or bank levy) can freeze the funds in your account. Your attorney can challenge the restraining notice — particularly if the funder has no valid judgment against you.

3. The funder files a lawsuit or COJ. If you are a California business, the funder cannot enforce a COJ in New York under CPLR §3218. They may sue in California or New York. Either way, your attorney raises the SB 1235 and usury defenses — and the funder’s case gets very difficult very fast.

4. Settlement. This is where most cases end. Once the funder sees that you have counsel, that California-specific defenses are in play, and that litigation will be expensive and uncertain — they settle. Typical settlements: 30–60% of the outstanding balance. Sometimes less.

Your Step-by-Step Plan

Step 1: Call Delancey Street before you block payments. Call (212) 210-1851. Have your MCA agreements ready. Their attorneys will review the contracts, identify SB 1235 violations and usury exposure, and build a defense strategy before you cut off the ACH.

Step 2: Open a new bank account. Move your business operations to a bank account the funder does not know about. This protects your working capital from restraining notices and levies.

Step 3: Revoke ACH authorization in writing. Submit a written revocation to your bank under NACHA rules. Request stop-payments on all future debits from the MCA funder.

Step 4: Let your attorney handle the funder. Do not communicate with the funder directly. Your attorney sends a cease-and-desist, raises the legal defenses, and begins settlement negotiations. That is the process. It works.

Top Companies for California MCA Defense — 2026

Here are the three top-rated firms for California business owners dealing with MCA payment disputes. Only Delancey Street provides California-specific MCA defense with SB 1235 and usury arguments.