Understanding Your Leverage
You have more leverage than you think. MCA funders deal with defaults constantly and know that litigating every default is expensive and uncertain. They would rather negotiate a reduced payoff than spend months in court.
Before You Start Negotiating
Review the MCA contract in detail. Calculate exactly how much you have paid versus what you owe. Assess your business’s realistic ability to pay. Identify any legal defenses such as usury, failure to reconcile, or fraud.
Negotiation Strategies That Work
Request Reconciliation First
Most contracts include a reconciliation provision. Submit a formal request with supporting bank statements. If the funder refuses, it strengthens your legal position.
Propose a Lump Sum Settlement
Settlements of 40 to 60 cents on the dollar are common. We have negotiated as low as 20 cents with strong legal defenses.
Offer a Modified Payment Plan
Reduced daily payments by 30 to 50 percent in exchange for extended repayment.
What Not to Do
- Do not threaten bankruptcy unless you mean it.
- Do not agree to anything verbally. Get everything in writing.
- Do not send partial payments without a written agreement.
- Do not negotiate without an attorney.