What Assets Can an MCA Company Seize After Default?

This is the first thing they go after. And they don't need a judgment to do it.

Most MCA agreements contain a confession of judgment clause (depending on the state you signed in). What that means, in plain English, is you already agreed to let them win in court without a trial. They file the COJ, get a judgment, and then they freeze your accounts. Business accounts, operating accounts, payroll accounts. All of it.

In New York, this used to happen within 24 to 48 hours. The 2019 amendments to CPLR 5222-a added some protections, but funders still move fast, and many business owners don't even know the freeze happened until their debit card gets declined at a gas station.

Some funders skip the COJ route entirely and go straight for a temporary restraining order. A TRO can freeze your business and personal bank accounts, sometimes on the same day the petition is filed. You wake up one morning and every account you have is locked. That's not an exaggeration.

When you signed that MCA agreement, the funder filed a UCC-1 financing statement. That's a public lien on your receivables. At the time you probably didn't think much of it. But at default, that UCC filing becomes a weapon.

The funder will send notices to your customers, your credit card processor, your payment platforms, anyone who owes you money. The notice says: "This business assigned their receivables to us. Pay us directly." And it's legal. They have full rights to intercept that cash flow.

This is how MCA companies choke a business out. They don't need to sue you first. They don't need a court order for this part. The UCC lien already gives them the authority to redirect your incoming payments. Done right, you'll see your revenue dry up within days.

This depends on the language in your specific MCA agreement. Some agreements include a blanket lien, which covers everything — your equipment, your inventory, your furniture, your vehicles, basically any tangible business asset.

If the funder filed a UCC lien with a blanket lien designation, they have a secured interest in all of it. Now, in practice, most MCA funders don't send a truck to repossess your equipment. That's not how they operate. But they can. And if your business has high-value assets (construction equipment, restaurant equipment, medical devices), some funders will absolutely pursue that route.

The more common play is to use the blanket lien as leverage in settlement negotiations. They'll remind you that they have a security interest in everything you own, and that tends to get people to the table.

If you signed a personal guarantee, and you almost certainly did, the funder can pursue your personal assets after obtaining a judgment. That means your personal bank accounts, your personal property, in some states even your home equity.

The personal guarantee is the clause most business owners skim past when they sign. It's the one that says if the business can't pay, you personally are on the hook. And MCA funders enforce these aggressively.

Once they have a judgment against you personally, they can garnish wages (if you have W-2 income from another source), levy your personal bank accounts, and place liens on real property. The judgment follows you. It doesn't disappear when you close the business.

This one catches people off guard. Many MCA agreements specifically name your credit card processor, and give the funder the right to redirect a percentage of your daily credit card sales. At default, they'll contact your processor directly and demand the funds.

Some funders were already splitting your daily credit card receipts as the repayment method. At default, they'll increase the split, or demand the full amount. If you switch processors to avoid this, that's itself a default trigger under most agreements, and it accelerates everything.

There are limits. Federal and state exemption laws protect certain assets from seizure, things like Social Security income, disability payments, retirement accounts (401k, IRA), and in many states, a portion of your wages and your primary residence.

But here's the reality, MCA funders will sometimes freeze accounts that contain exempt funds anyway. They know most business owners don't have a lawyer on retainer who can file an emergency motion to unfreeze the account within 48 hours. The burden falls on you to prove the funds are exempt. And while you're proving it, your money is frozen.

This is where having legal representation matters. Not after everything is frozen. Before.

The assets themselves aren't the surprise. The speed is. Traditional lenders send demand letters, wait for responses, escalate gradually. MCA funders operate on a completely different timeline. The default triggers, the UCC notices go out, the COJ gets filed, the accounts get frozen, and this can all happen in the same week. Sometimes in the same 72 hours.

If you're stacking multiple MCAs (and statistically, if you're reading this, you probably are), every single one of those funders has the same rights. They're all racing to be first in line. The one who files fastest gets paid first. And they all know it.

That's the environment you're operating in. It's not designed to give you time to figure things out. It's designed to recover money as fast as possible, and the legal infrastructure was built to make that happen before you even realize what's going on.