Collection calls and demand letters
The first stage is pressure, not process: daily calls, demand letters, contact with your customers. Nothing has been decided yet, and this is the widest window you will have to negotiate.
Creditor actions
Creditor actions: what MCA funders and lenders can actually do
When payments stop, the threats usually arrive long before anything legal does. Knowing which stage you are actually at — pressure, filing, judgment, or collection — tells you how much time you have and which options are still open. This is the map.
What happens, in the order it happens
Each stage below links to a full explanation of what the creditor is doing, what it means in practice, and what you can still do about it.
Before anything is filed
When you can’t make payroll
Payroll is the deadline that forces the decision. Unpaid wages carry personal exposure for owners in many states, which is why payroll usually has to be protected ahead of a funder’s daily debit.
Personal guarantees vs performance guarantees
Whether your house is exposed comes down to which one you signed. They look similar and mean very different things.
The legal machinery
Confession of judgment
A clause that lets a funder obtain a judgment without suing you first. Where enforceable, it compresses default to judgment into days.
Being sued by an MCA company
What the complaint actually claims, the deadline that matters most, and why ignoring it converts a disputable claim into a default judgment.
UCC liens on business assets
A UCC-1 tells every future lender someone else has first claim on your assets. It is usually why new financing stops being available.
Removing a UCC lien
A lien that survives the debt it secured is an administrative problem with a specific fix — a UCC-3 termination.
When they reach your money
A frozen business bank account
What actually happened, whether it was the funder’s ACH access or a court-ordered restraint, and what moves are still available.
Bank account levy
A levy follows a judgment and takes what is in the account on the day it lands. Timing is everything.
Business tax liens
The IRS and state agencies have collection powers no private creditor has, and their debt does not settle on the same terms.
If the business can’t continue
Closing a business that still owes money
Dissolving does not erase guaranteed debt. The order you do things in decides what follows you personally.
Creditor actions, questions
Can an MCA company take money from my bank account without suing me?
If you signed an ACH authorization, the funder can keep debiting the account you gave them until you revoke it or the bank blocks it. That is different from a levy, which follows a judgment and lets a creditor take what is in the account. Revoking an authorization stops future debits but does not cancel the debt.
What is a confession of judgment?
A clause in which you agree in advance that if the funder says you defaulted, they can enter a judgment against you without a trial. Where it is still enforceable, a funder can go from default to an enforceable judgment in days. New York banned them against out-of-state borrowers in 2019, but older contracts and other states still surface them.
Can they freeze my business bank account?
Not on their own. Freezing or levying an account normally requires a judgment first, then a court order served on the bank. The practical exception is the funder’s own ACH access, which needs no court at all.
Does a UCC lien stop me borrowing?
Usually yes, in effect. A UCC-1 filed against all business assets tells every future lender that someone else has first claim, so most will decline or demand the lien be cleared first. It can be terminated with a UCC-3 once the debt is resolved.
Am I personally liable?
It depends on what you signed. A personal guarantee makes you liable personally. Many MCA agreements instead contain a performance guarantee, which becomes personal liability only if you breach specific terms — for instance by diverting card receipts. The distinction matters and is worth reading carefully.
Not sure which stage you are at?
A free, confidential review will tell you what has actually been filed against your business, what a creditor can do next, and which options are still open. No obligation, and it will not affect your credit.
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