Welcome to Delancey Street. If you're reading this, you're probably behind on your merchant cash advance — or you're about to be. And you want to know what they can actually take from you. That's the right question to ask. But you're not going to like the answer.

Most business owners assume an MCA company has to sue you first, get a judgment, then slowly work through the legal system. That's how traditional lenders operate. That is not how MCA funders operate. They've already built the enforcement mechanism into the contract you signed. The seizure starts before you even realize you're in trouble.

Your Receivables Are the First Thing They Take

This is the big one, and it's the one nobody sees coming.

When you signed your MCA agreement, the funder filed a UCC-1 financing statement against your business. That filing gave them a secured interest in your receivables — meaning every dollar that flows into your business is technically collateral. Every invoice. Every credit card transaction. Every payment from every customer.

The moment you default, they activate that lien. Here's what that looks like in practice:

  • They send notices to your credit card processor (the processor is legally obligated to comply) instructing them to redirect your merchant account deposits to the funder
  • They contact your customers directly — anyone listed on your bank statements — and tell them to send payments to the MCA company instead of you
  • They notify any factoring companies or secondary lenders that the funder has a prior claim on your receivables

This isn't theoretical. This happens within days of a default. Sometimes within 48 hours. Your cash flow gets intercepted at the source, and you're left operating a business with no incoming money. That's not an exaggeration, that's the playbook.

Your Bank Accounts — Personal and Business

Here's where it gets ugly.

Many MCA agreements include a confession of judgment (COJ) clause. Not every state allows them anymore (New York restricted them in 2019 for out-of-state borrowers), but plenty of funders still use them, and plenty of business owners signed agreements that predate the restrictions.

A confession of judgment means the funder can get a judgment against you without a trial. No hearing. No defense. No 30-day notice. They file the COJ, get the judgment, and within hours — not days, hours — they can get a restraining notice or bank levy that freezes your accounts.

And not just your business accounts. If you personally guaranteed the MCA (you almost certainly did), they can freeze your personal checking, savings, and any joint accounts your name is on.

You wake up one morning, your debit card gets declined at a gas station, and when you check your balance online everything says $0.00 available. That's how fast this moves.

Even without a COJ, many funders will pursue an expedited judgment through litigation. It's slower — weeks instead of hours — but the outcome is the same. Bank levy. Frozen accounts. Garnished funds.

Equipment and Physical Assets

If you used equipment as collateral (and some MCA agreements are structured this way, or they include broad language covering "all assets"), the funder has a legal claim on your physical property.

That means:

  • Vehicles purchased or used by the business
  • Machinery, tools, restaurant equipment, medical equipment — whatever your business runs on
  • Inventory and stock
  • Fixtures (this is a big one for retail and restaurant owners — your buildout, your refrigeration units, your POS systems)

The UCC-1 lien isn't always limited to receivables. Read the filing language carefully. Some funders file against "all assets of the debtor" — and that's exactly as broad as it sounds. If it's owned by the business, they have a claim on it.

In practice, most MCA funders don't actually repo your equipment. It's not worth the logistics for them. But they absolutely can, and some of the more aggressive funders (the ones who specialize in high-risk deals and charge factor rates north of 1.45) will use the threat of seizure as leverage to force a settlement or a new payment arrangement on their terms.

The Personal Guarantee Changes Everything

This is the part most business owners don't think about until it's too late.

When you signed that MCA, you almost certainly signed a personal guarantee. That one page — sometimes it's just a paragraph inside the larger agreement — erased the line between your business and your personal life.

With a personal guarantee in place, the funder can pursue:

  • Your personal bank accounts (checking, savings, CDs, money market — anything with your name on it)
  • Your personal property — and depending on the state, that can include your car, your home equity, and other assets (state exemption laws vary, but the exposure is real)
  • Wage garnishment if you also have W-2 income from another source
  • Your spouse's joint accounts if they're co-signers or if the accounts are jointly held

And here's the part that really stings — the personal guarantee typically survives bankruptcy of the business entity. You can close the LLC. You can dissolve the corporation. The personal guarantee follows you. The funder doesn't care that the business is dead. They care that you signed a piece of paper that says you personally owe the money.

What They Can't Seize (It's a Short List)

People ask us this all the time. And the honest answer is, the list of protected assets is much shorter than you'd hope.

Generally, most states protect:

  • A portion of your primary residence (homestead exemption — varies wildly by state, anywhere from $25,000 to unlimited in Texas and Florida)
  • Basic personal necessities — clothing, household goods, some tools of the trade
  • Retirement accounts (401k, IRA — these are usually protected under federal law, though the rules get complicated)
  • Social Security benefits and certain government payments

That's roughly it. Everything else is on the table. And the protections above only apply after a judgment — they don't prevent the funder from filing a lien, freezing accounts, or intercepting receivables in the meantime.

The Timeline Is What Catches People Off Guard

If you're used to traditional lending — where default means a letter, then a phone call, then maybe a collections agency 90 days later — you are not prepared for what MCA enforcement looks like.

Here's the realistic timeline:

  • Day 1-3: ACH gets returned. Funder retries 2-3 times. NSF fees stack up ($35 per attempt from your bank, plus the funder's returned payment fee). You're already down $300-500 in fees alone before anyone makes a phone call.
  • Day 3-7: Collections calls begin. Your cell, your business line, the personal guarantor's phone. Some funders will call 10-15 times a day. Some will contact your customers and vendors whose information appeared on the bank statements you submitted.
  • Day 7-14: UCC lien notices go out. Your credit card processor gets a diversion notice. Customer payments start getting redirected. Your cash flow is now being choked at the source.
  • Day 7-21: If they have a COJ, the bank freeze happens. If they don't, they file suit. Either way, your accounts are at risk within the first 3 weeks.
  • Day 14-30: The full balance gets accelerated. You no longer owe the daily payment. You owe the entire remaining purchased amount, plus default fees, plus attorney fees, plus interest on all of it.

That's 30 days. From first missed payment to full-scale enforcement. Some funders move even faster.

What You Should Do Right Now

If you're reading this article, you're probably already in one of these stages. Or you're about to be. Here's what we tell every business owner who calls us:

Do not ignore the funder's calls. Silence is what triggers the escalation. The moment they can't reach you, they assume you're hiding assets and they go nuclear.

Do not move money between accounts. This is the single most common mistake. You think you're protecting your cash. What you're actually doing is triggering the "change of bank account" default clause in your MCA agreement and giving them grounds for fraud allegations.

Do not take on another MCA to cover the first one. Stacking is what turns a bad situation into an unrecoverable one. Every additional advance adds another UCC lien, another personal guarantee, another funder who wants blood.

Talk to someone who understands MCA enforcement — not a general business attorney, not your accountant. Someone who deals with MCA defaults specifically and knows how to negotiate with these funders.

At Delancey Street, we're an attorney-owned firm that negotiates MCA debt settlements every day. We know how these funders operate because we've been on the other side of the table. If you're behind on payments, if your accounts are frozen, if your receivables are being intercepted — call us at 888-693-8608 or visit before the situation gets worse.

Because it will get worse. That's not a scare tactic. That's just how this industry works.