Florida Business Debt Relief
Expert MCA Settlement & Debt Restructuring

Florida Statute § 559.9613 requires strict transparency for every commercial funding transaction under $500,000. This law mandates that Florida MCA lenders provide a clear disclosure statement before the borrower signs any agreement, including the total cost of financing, the annualized cost expressed as an APR, the total repayment amount, and the payment frequency and amounts. The statute also requires an itemization of amounts disbursed, ensuring that Florida business owners understand exactly how much capital they are actually receiving after any fees or deductions.

For Florida businesses that took on MCAs without seeing these required disclosures, this statute can be a powerful tool. Attorneys can use the lender's failure to comply with § 559.9613 to challenge the enforceability of the entire agreement. If the MCA provider never delivered the statutorily required disclosure document, the contract may be vulnerable to attack in Florida court. Florida business owners should always request and retain a copy of the disclosure statement. If you never received one, that fact alone may strengthen your position in negotiations or litigation. The Florida Office of Financial Regulation oversees compliance, and businesses that believe their MCA lender violated disclosure requirements can file complaints that may trigger regulatory scrutiny.

In 2021, Florida's Third District Court of Appeal ruled in Craton Entertainment v. Merchant Capital Group that an MCA structured as a purchase and sale agreement was not a "disguised loan" and therefore not subject to Florida's criminal usury statute. The court found that because repayment was contingent on future receivables, the transaction did not meet the definition of a loan under Florida law. This was a significant victory for MCA lenders operating in Florida and established a precedent that has influenced MCA litigation throughout the state.

However, the Craton decision is not absolute protection for every MCA agreement. The critical exception is this: if an MCA requires unconditional repayment regardless of business performance — meaning the business must pay fixed daily amounts even when revenue collapses — Florida courts may treat it as a loan subject to usury limits. Florida's criminal usury cap is 25% per year for loans under $500,000. Many MCA agreements with factor rates above 1.4, when annualized, exceed this threshold. Attorneys analyzing MCA contracts in Florida look specifically for "disguised loan" characteristics such as fixed repayment schedules unrelated to actual receivables, personal guarantees that make the owner personally liable for the full balance, and confession of judgment clauses that treat the agreement as a debt instrument.

If your MCA agreement contains these features, Craton may not shield your lender from usury challenges. A Florida attorney experienced in MCA litigation can review your contract for these red flags. Understanding whether your specific agreement falls within the Craton safe harbor or outside it is one of the most important early questions in any Florida MCA dispute. Businesses with agreements that function as true disguised loans have additional legal leverage that pure purchase-and-sale structures do not provide.

Florida has banned Confession of Judgment (COJ) clauses in commercial contracts governed by Florida law. Under Florida Statute § 55.01, a confession of judgment is generally unenforceable in Florida courts, and any attempt to enter judgment by confession without proper notice and opportunity to defend violates Florida public policy. This makes Florida one of the more protective states for business owners facing aggressive MCA collection tactics.

However, MCA contracts often contain choice-of-law clauses requiring disputes to be heard in New York or other COJ-permitting states. This creates a dangerous loophole: a Florida business owner signs an agreement in Miami or Tampa, but the contract says New York law governs and New York courts have jurisdiction. The MCA lender then files a confession of judgment in New York and attempts to domesticate that judgment in Florida. Florida business owners can suddenly find themselves facing a judgment entered thousands of miles away without ever having appeared in court.

When MCA lenders attempt to domesticate New York judgments in Florida courts, business owners have several defenses. First, Florida courts can refuse to recognize out-of-state judgments that violate Florida public policy, and Florida's ban on COJs is strong public policy. Second, if the Florida business owner never had meaningful contact with New York — the agreement was signed in Florida, the business operates in Florida, and all performance occurred in Florida — personal jurisdiction defenses may apply. Third, many MCA choice-of-law clauses are vulnerable to challenge as unconscionable or as forum-selection clauses that deny the borrower any realistic opportunity to defend. Florida business owners facing domesticated COJs should act quickly, as the time to challenge a domesticated judgment is limited.

Florida has distinct MCA exposure across industries driven by the state's unique economic structure. Hospitality and tourism businesses face seasonal cash flow that strains daily MCA debits. A hotel in Orlando or a tour operator in the Keys may generate strong revenue from December through April but experience dramatic slowdowns in summer months. When an MCA requires fixed daily payments year-round, the seasonal troughs can wipe out cash reserves and force emergency borrowing just to stay current.

Restaurants and food service businesses across Miami, Orlando, and Tampa metro areas face intense competition, high labor turnover, and rising food costs that create working capital pressures. Many turn to MCAs for quick equipment financing or payroll coverage, then discover that the daily repayment structure makes it impossible to build the financial cushion needed to survive a slow month. Construction businesses serving Florida's rapid population growth and hurricane rebuild cycles face material cost inflation and labor shortages that can trigger sudden cash flow gaps.

Healthcare practices throughout Florida manage complex insurance reimbursement timing alongside MCA debt. When an insurer delays payment for 60 or 90 days but the MCA debit hits daily, the mismatch can become existential. Retail businesses in tourism-dependent markets face similar seasonality challenges, with inventory financing needs peaking before tourist season and revenue arriving on a lag. Florida's combination of seasonal volatility, rapid growth pressure, and industry concentration makes it one of the states where MCA debt spirals most aggressively. Business owners need strategies that account for Florida's specific industry dynamics, not generic debt relief templates.