What Happens When You Default on a Merchant Cash Advance
March 1, 2025·12 min read
Contents
Defaulting on a merchant cash advance sets in motion a sequence of events that moves faster than default on almost any other business obligation.
What Triggers a Default
Many MCA contracts define default broadly: failed ACH, change in bank account without consent, material decline in average daily balance, or applying for additional financing without consent.
The 24 to 72 Hour Window After Default
With a COJ provision, the lender's attorney can file the COJ affidavit the same day. Once the judgment is entered, the lender can immediately begin bank levies. A bank levy freezes your accounts.
What to Do If Your Account Is Frozen
The first call is to an MCA defense attorney. Do not call the lender's collection department without an attorney advising you.
Frequently Asked Questions
Can a lender declare default if I have not missed a payment? Yes, under many MCA contracts. If your contract includes balance thresholds or bank account change restrictions, the lender may have contractual grounds to declare default.
This article is for educational purposes only and does not constitute legal or financial advice.
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