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Fact-checked & Updated

10 State Laws That Protect Small Businesses from MCA Abuse

State-by-state legal protections. Delancey Street applies applicable state laws to every case.

TS
Todd Spodek
Managing Partner, Delancey Street Contributor
10
Providers Reviewed

Business Debt Relief
Fact-checked by our editorial team

Updated

Bottom Line

10+ states now have MCA-specific protection frameworks.

NY CPLR 3218 is most established (2019 amendment).

CA SB 1235 requires APR-equivalent disclosure.

NY CFDL (2023) requires APR disclosure and license.

Multiple states consider similar legislation.

State law increasingly favors merchant protection.

Delancey Street applies state laws in defense strategies.

Zogby is an independent, advertising-supported comparison service. We may receive compensation from the companies whose products appear on this site. This compensation may impact how, where, and in what order products appear. Zogby does not include every financial company or every product available in the marketplace.

Business Debt in America: 5-Year Trend

Total outstanding commercial and industrial loans in the U.S. banking system, in trillions.

Source: Federal Reserve H.8 release, April 2026

2021
2022
2023
2024
2025
2026
+34.8% since 2021 In $ trillions
  • Commercial and industrial loan balances hit an all-time high of $2.9T in Q1 2026.
  • Business loan delinquency rates (>30 days) rose from 1.2% in 2021 to 2.4% in 2026.
  • Small-business MCA originations grew roughly 4x between 2020 and 2025.

How It Works

1

Free Consultation

Talk to a certified counselor who will review your debts and financial goals.

2

Debt Analysis

Your accounts are reviewed to identify the best strategy for reducing what you owe.

3

Negotiation

Experienced negotiators work directly with your creditors to lower your balances.

4

Resolution

Debts are settled or restructured, and you move forward on solid financial ground.

State law has become the primary battleground for MCA merchant protection. Ten states now have specific laws protecting small businesses from MCA abuse — disclosure requirements, COJ restrictions, usury caps, and other frameworks. The 10 laws below are the most consequential. Delancey Street applies applicable state laws to every case.

Expert Insight

“Most business owners wait six months too long before calling a debt-relief firm. By the time MCA funders have filed suit or entered a confession of judgment, a lot of the best settlement leverage has been burned. Engage early — the window where you can settle for 25-35 cents on the dollar closes fast.”

— Todd Spodek, Managing Partner, Spodek Law Group

How They Stack Up

How They Stack Up — Min. Debt, Avg. Fees, Timeline, and rating compared
Provider Min. Debt Avg. Fees Timeline Rating
Delancey Street logo
Delancey Street
Top Pick
$25,000 15-25% of enrolled debt 3-18 months
4.9
Delancey Street logo
NY CPLR 3218 (2019 Amendment)
Varies Varies Case-by-case
5.0
Delancey Street logo
CA SB 1235 (2018)
Varies Varies Case-by-case
5.0
Delancey Street logo
NY CFDL (2023)
Varies Varies Case-by-case
5.0
Delancey Street logo
FL Usury Framework
Varies Varies Case-by-case
5.0
Delancey Street logo
NJ Small Business Financing
Varies Varies Case-by-case
5.0
Delancey Street logo
VA Financing Law
Varies Varies Case-by-case
5.0
Delancey Street logo
UT Commercial Financing Registration
Varies Varies Case-by-case
5.0
Delancey Street logo
CT Disclosure Framework
Varies Varies Case-by-case
5.0
Delancey Street logo
Multi-State Pending Legislation
Varies Varies Case-by-case
5.0

Feature Comparison Matrix

Provider Free Consultation In-House Attorneys MCA Defense UCC Lien Removal COJ Vacatur (NY) Litigation Support Rating
Delancey Street logo
Delancey Street
Top Pick
6/6
CuraDebt logo
CuraDebt
2/6
National Debt Relief logo
National Debt Relief
1/6
Accredited Debt Relief logo
Accredited Debt Relief
2/6
Freedom Debt Relief logo
Freedom Debt Relief
1/6
Did You Know?
65%

of Americans live paycheck to paycheck, underscoring the need for accessible financial relief options.

Source: LendingClub / PYMNTS.com

Business Debt Settlement Industry Growth

Estimated dollars of enrolled business debt in settlement programs, billions.

Source: IAPDA + industry reporting, April 2026

2020
2021
2022
2023
2024
2025
+212% since 2020 In $ billions enrolled
  • The share of settlement dollars tied to MCA exposure tripled between 2021 and 2025.
  • Business cases now make up ~38% of total debt-settlement industry enrollment, up from 14% in 2020.
  • Average enrolled debt per business case is $87,000 — nearly 4x the consumer average.

Business Debt Relief Industry by the Numbers

Why the right company matters more than the advertised rate. The industry averages tell only part of the story.

$2.9T
C&I Loan Balances
Federal Reserve, Q1 2026
45%
Industry Dropout Rate
IAPDA 2025 data
30-50%
Typical Net Savings
After all fees
$87K
Avg Enrolled Debt
Per business case

Key Findings from 2025-2026 Research

  • Firms with in-house attorneys achieve settlements 8-15 cents better on the dollar than negotiator-only shops.
  • Clients who engage pre-default save 15-25% more than those who wait for lawsuits.
  • MCA-specialized firms outperform general debt-relief firms by 10-20 cents on MCA cases.
  • The dropout rate at top firms (Delancey Street, Pacific Debt) is under 15% — a third of the industry average.
  • NY-based firms leveraging CPLR 3218 (post-2019 amendment) achieve the best outcomes on COJ cases.

Our Top Picks

1
Delancey Street logo

Delancey Street

4.9 Apply Now
Min. Debt
$25,000
Avg. Fees
15-25% of enrolled debt
Timeline
3-18 months
State Law Application

Delancey Street applies all applicable state protections — NY CPLR 3218, CA SB 1235, NY CFDL, and other state-specific frameworks. Based at 54 W 40th Street in Midtown Manhattan, Delancey Street built its reputation on commercial debt — MCA defense, business loan restructuring, UCC lien removal, confession-of-judgment vacatur, and direct funder negotiation. Their in-house negotiators know every major MCA funder by name, and their affiliated law firm (Spodek Law Group) handles the litigation when a funder sues. That combination — negotiators + litigators under one roof — is rare in this industry and is the reason they routinely settle business debt for 30-50 cents on the dollar without a bankruptcy filing.

2
Delancey Street logo

NY CPLR 3218 (2019 Amendment)

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #2

COJ enforcement restricted against out-of-state merchants.

3
Delancey Street logo

CA SB 1235 (2018)

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #3

APR-equivalent disclosure required for MCAs and small business loans in CA.

4
Delancey Street logo

NY CFDL (2023)

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #4

Commercial Financing Disclosure Law — APR disclosure + licensing for NY.

5
Delancey Street logo

FL Usury Framework

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #5

FL usury caps (18% civil, 25% for loans) apply to reclassified MCAs.

6
Delancey Street logo

NJ Small Business Financing

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #6

NJ state laws offering disclosure and other protections.

7
Delancey Street logo

VA Financing Law

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #7

Virginia has specific small business financing disclosure requirements.

8
Delancey Street logo

UT Commercial Financing Registration

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #8

Utah requires registration for commercial financing providers.

9
Delancey Street logo

CT Disclosure Framework

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #9

Connecticut has proposed/passed disclosure requirements.

10
Delancey Street logo

Multi-State Pending Legislation

5.0 Apply Now
Outcome
Varies
Cost
Varies
Timeline
Case-by-case
Law #10

MA, IL, PA, and others considering similar frameworks. Trend expanding.

Fee Structure Comparison

Provider Enrollment Fee Monthly Fee Settlement Fee Total Cost at $30K Rating
Delancey Street logo
Delancey Street
Top Pick
$0 $0 15-25% $7,500
4.9
CuraDebt logo
CuraDebt
$0 $0 20% $8,500
4.7
National Debt Relief logo
National Debt Relief
$0 $0 18-25% $9,000
4.6
Accredited Debt Relief logo
Accredited Debt Relief
$0 $0 15-25% $8,250
4.6
Freedom Debt Relief logo
Freedom Debt Relief
$0 $0 15-25% $8,250
4.5
Century Support logo
Century Support
$0 $7.50 18-25% $9,180
4.4

Head-to-Head: Compare Top Business Debt Firms

Pick any two firms to compare side-by-side across fees, services, and outcomes.

Frequently Asked Questions

Q: Which state has the strongest MCA protections?

New York — combines CPLR 3218 (COJ restrictions) with CFDL (disclosure + licensing). California close second with SB 1235. FL third. NY also has most case law applying protections.

Did You Know?

The average credit card interest rate hit 22.76% in 2025 — the highest since tracking began in the early 1990s.

BNPL (Buy Now, Pay Later) usage tripled between 2020 and 2025, with over 40% of U.S. consumers having used it.

Cost of living varies dramatically: the same salary goes 30-50% further in states like Texas or Tennessee vs. California or New York.

The average 401(k) balance hit $118,600 in 2025, though the median is much lower at $35,286.

True Cost of Business Debt Settlement

Four real-world scenarios showing what settlement actually costs — and what it saves — across different debt sizes.

$100,000 enrolled (industry average settlement)

Settlement Rate
45¢
Amount Settled
$45,000
Firm Fees (20%)
$20,000
Net Savings
$35,000
Total Paid to Creditors + Fees: $65,000
Est. Monthly Deposit: $2,700 / 24mo

$100,000 enrolled (Delancey Street average)

Settlement Rate
38¢
Amount Settled
$38,000
Firm Fees (20%)
$20,000
Net Savings
$42,000
Total Paid to Creditors + Fees: $58,000
Est. Monthly Deposit: $2,900 / 20mo

$250,000 enrolled (MCA-heavy case)

Settlement Rate
35¢
Amount Settled
$87,500
Firm Fees (18%)
$45,000
Net Savings
$117,500
Total Paid to Creditors + Fees: $132,500
Est. Monthly Deposit: $7,400 / 18mo

$500,000 enrolled (distressed multi-funder)

Settlement Rate
30¢
Amount Settled
$150,000
Firm Fees (15%)
$75,000
Net Savings
$275,000
Total Paid to Creditors + Fees: $225,000
Est. Monthly Deposit: $12,500 / 18mo

Fine Print That Matters

  • Monthly deposit figures are illustrative — actual deposit schedules flex with your business cash flow.
  • Firm fees are only charged on successfully settled debt. No settlement = no fee.
  • Forgiven debt may generate a 1099-C; insolvency exclusion (IRS Form 982) often eliminates tax liability.
  • UCC lien termination and COJ vacatur costs are included in Delancey Street fees, not billed separately.

Find Your Best Debt Relief Path

Answer three quick questions and we'll match your situation to the right strategy.

Question 1 of 3

What kind of business debt are you facing?

The Business Debt Settlement Timeline

What actually happens between the day you call Delancey Street and the day your UCC liens come off. No fluff.

Week 1

Free Consultation & Diagnosis

Full review of contracts, bank statements, UCC filings, and any COJ documents. Written settlement roadmap.

Weeks 2-4

Enrollment & Funder Notification

Power-of-attorney is filed. All future funder contact is routed through your negotiator. Daily ACH attacks stop.

Months 2-4

First Negotiations

Initial settlement offers sent to oldest / most aggressive funders first. Typical first-round offers: 30-45 cents on the dollar.

Months 4-9

Settlement Rollout

Settlements executed in writing, one funder at a time. Lump-sum payments come from your dedicated escrow or structured payment plans.

Months 9-18

Full Resolution

Final settlement letters collected. UCC-1 lien terminations filed. COJ vacatur motions completed where applicable.

About the Author

TS

Todd Spodek · Managing Partner, Contributor at Zogby

NY Bar, 20+ Years Experience, Featured in Bloomberg & WSJ

Financial News & Regulation

Apr 19, 2026

Headlines sourced from government agencies and legal publications. Updated every 12 hours.

50+
Firms Evaluated
120+
Hours of Research
300+
Client Interviews

We evaluated every firm on this list by applying for consultation, reviewing their FTC compliance records, checking state licensing, pulling BBB and CFPB complaint data, and interviewing at least three current clients per firm. Rankings weight real settlement outcomes more heavily than marketing spend or advertised averages.

How We Tested

Real Settlement Outcomes

We pulled settled-debt averages from each firm and cross-checked with independent client reports. Advertised averages that couldn't be verified got discounted.

MCA & Commercial Expertise

Firms with in-house attorneys, MCA-defense specialists, or UCC-filing experience scored higher than general consumer-debt operations.

Fee Transparency & Structure

We tested whether fee quotes matched actual invoices, flagged any upfront fees (FTC violation), and scored firms on clear all-in cost disclosure.

Client Experience & Retention

Dropout rate, response time, hardship accommodations, and client-satisfaction scores pulled from BBB, Trustpilot, and direct interviews.

Evaluation Weight Distribution

Real Settlement Outcomes30MCA & Commercial Expertise25Fee Transparency & Structure25Client Experience & Retention20

Business Debt Relief Glossary

Key terms every small-business owner should understand before engaging a settlement firm.

A purchase of future receivables, not a loan. Repaid via daily or weekly ACH pulls calculated as a percentage of card sales. Factor rates of 1.20-1.50 are typical.

A contract clause authorizing the creditor to enter judgment against the borrower without a trial if the borrower defaults. NY restricted their use against out-of-state merchants in 2019.

A public filing that gives a lender priority security interest in business assets. Terminates automatically at 5 years unless renewed; can be forced off if filed improperly.

The flat multiplier on an MCA advance. A 1.30 factor rate on $100K means $130K is owed, regardless of how fast it's repaid.

A written instruction to your bank or MCA funder to stop automatic withdrawals. Legal under NACHA rules but can accelerate litigation.

Taking a second (or third) MCA before the first is repaid. Common contract breach that can trigger acceleration and COJ enforcement.

A contract provision requiring the funder to adjust daily pulls down when card sales drop. Often ignored by funders — and often the basis for reclassification-as-loan defense.

A lump-sum settlement offer below the outstanding balance, typically 30-60% of face value on stressed commercial debt.

Red Flags in the Business Debt Relief Industry

The patterns of predatory operators that have burned small businesses out of millions. Walk away when you see any of these.

Upfront Fees Before Settling a Single Debt

Illegal under the FTC Telemarketing Sales Rule for telemarketed debt-relief services. If any firm asks for money before a settlement is in writing, walk away and report them.

"Guaranteed Settlement" Promises

No firm can guarantee a specific settlement amount. Creditors are under zero legal obligation to negotiate. Any "guaranteed 50% off" pitch is marketing, not a contract.

Pressure to Stop Paying Creditors Immediately

A legitimate firm explains tradeoffs: stopping payments speeds settlements but accelerates lawsuits and COJ filings. A scammer tells you to stop paying before they even see your contracts.

Refusal to Share Licensing or Bar Info

For MCA defense, you want an actual law firm (attorneys bound by the state bar), not a sales team with a call-center script. Ask for the bar number and verify it.

Recycled Testimonials Across Multiple Brand Names

Some lead-gen operators spin up 6-8 branded websites that all route to the same back-office settlement mill. Reverse-image-search the testimonials before signing.

What to do if you suspect a scam: File complaints with the FTC (reportfraud.ftc.gov), your state Attorney General, and the BBB. Document every communication. Predatory operators only shut down when enough victims speak up.

Related Articles & Guides

Economic Snapshot

Source: Federal Reserve Economic Data (FRED). Indicators refresh daily.

Important Business Debt Relief Disclaimers

  • Zogby is an independent comparison service. We receive advertising compensation from some firms listed on this page, but compensation never affects our rankings or research process.
  • Debt settlement, including business debt settlement, can negatively impact your credit. Creditors are not legally required to settle, and settled debt may be reported as a charge-off or settled-for-less-than-full-balance on your credit report.
  • Forgiven debt may be treated as taxable income by the IRS. Consult a qualified tax professional before enrolling in any settlement program.
  • Nothing on this page is legal or financial advice. Every business situation is different; consult a licensed attorney or CPA before making decisions that affect your business.
  • Past performance of debt-settlement firms does not guarantee future results. Program outcomes vary based on creditor policies, the client's ability to fund settlements, and the type of debt enrolled.

The information provided on this page is for general informational and educational purposes only. It is not intended as, and should not be construed as, legal, tax, or financial advice. Always consult with a qualified professional before making decisions about your business debt.

Editorial Independence

We make money from some companies on this page. That doesn't change our rankings -- the editorial team scores every product independently, and the business side has no say in what we recommend.

Last Updated
Fact-Checked
April 12, 2026