How to Negotiate with Aggressive MCA Lenders
Article Summary
Proven negotiation tactics for dealing with aggressive MCA companies. Learn what works, what doesn't, and how to protect your business during negotiations.
Understanding MCA Lender Tactics#
MCA lenders are known for aggressive collection tactics that can intimidate even experienced business owners. They use psychological pressure, legal threats, and financial leverage to extract payment. Understanding their playbook is the first step to effective negotiation.
Remember: despite their aggressive tactics, MCA lenders are businesses too. They'd rather settle for something than get nothing through bankruptcy or business closure.
Common MCA Intimidation Tactics#
MCA companies use several standard intimidation tactics. Recognizing them helps you stay calm and focused.
- Threatening immediate legal action or confession of judgment enforcement
- Multiple daily phone calls to you, your employees, and your family
- Showing up at your business location unannounced
- Threatening to freeze your bank accounts
- Claiming you've committed fraud or will face criminal charges
- Pressuring you to take out new MCAs to pay old ones
- Threatening to contact your customers or vendors
Effective Negotiation Strategies#
Professional negotiators use specific strategies that consistently achieve better results than business owners negotiating alone.
Never negotiate from a position of desperation. Document your financial hardship thoroughly. Make lump sum settlement offers, not payment plans. Start low (20-30 cents on the dollar) and negotiate up. Get everything in writing before making any payment. Ensure UCC liens will be released. Use professional negotiators who understand MCA tactics.
What NOT to Do#
Many business owners make critical mistakes that weaken their negotiating position. Don't admit you have access to funds you're not offering. Don't agree to payment plans you can't sustain. Don't make partial payments without a written settlement agreement. Don't ignore legal notices or court documents. Don't take out new debt to pay old MCA debt. Don't negotiate while emotional or under pressure.
When to Bring in Professionals#
While some business owners successfully negotiate their own MCA settlements, professional help often achieves better results. Consider professional negotiators if you're facing multiple MCAs, dealing with confession of judgment threats, feeling overwhelmed by aggressive tactics, unsure of your legal rights, or unable to achieve reasonable settlement offers on your own.