Maryland has done more work on merchant cash advance regulation than most states, and that work has produced real tools for businesses under pressure. The state’s Commercial Financing Disclosure Law, enacted in 2023 and applicable to commercial financing transactions under $2 million, requires funders to disclose the total repayment amount, the estimated annual percentage rate, and the payment schedule before a business signs. That disclosure requirement alone has changed the negotiating posture of many funders operating in Maryland.
Resource 1: The Maryland Attorney General’s Office
Maryland’s Attorney General secured an injunction against a merchant cash advance operation in 2023 for conduct the office characterized as predatory. The Attorney General’s Consumer Protection Division accepts complaints from business owners who believe they were subjected to deceptive origination practices. Filing a complaint does not guarantee individual relief, but it creates a record that may support a broader enforcement action, and funders are aware that the Maryland AG’s office has demonstrated a willingness to litigate.
Resource 2: The Maryland Commercial Financing Disclosure Law
If a funder operating in Maryland failed to provide the disclosures required under the 2023 legislation, the business has a potential statutory claim. The disclosure requirements are not aspirational guidelines. They carry enforcement consequences. A transaction originated without compliant disclosure may give the business grounds to challenge the enforceability of key terms, including the factor rate and the remittance percentage.
This is not a path every Maryland business can take. The law’s requirements apply to funders who offered financing to Maryland businesses in the applicable transaction-size range after the effective date. But for those it covers, the disclosure law is a significant resource.
Resource 3: Maryland’s Credit Services Businesses Act
The Credit Services Businesses Act regulates entities that arrange or assist in obtaining credit for Maryland consumers and businesses. MCA brokers who solicited the advance and charged origination fees or processing costs may fall within its scope. If the broker was unlicensed or failed to comply with the Act’s requirements, the transaction may be voidable. This resource targets not only the funder but the distribution chain that brought the product to the business owner.
Resource 4: Private MCA Defense Attorneys
Maryland has a growing body of commercial attorneys who focus on MCA disputes. These are not generic debt settlement firms. The distinction matters. A debt settlement firm negotiates a number. An attorney examines the agreement, the origination conduct, the funder’s post-default behavior, and the available statutory frameworks, then advises on whether to settle, litigate, file for protection, or pursue counterclaims. The choice among those paths changes the outcome.
What one looks for in an MCA defense attorney in Maryland: experience with commercial financing disputes specifically, familiarity with the 2023 disclosure law, and an understanding of federal bankruptcy law as a backup option. References from other Maryland business owners who have used the attorney’s services are worth requesting.
Resource 5: Maryland Small Business Development Centers
The Maryland SBDC network, operating through the University of Maryland system, provides free consulting to small businesses. MCA debt is not their primary focus, but a financial consultant through the SBDC can help a business owner assess whether the business is viable, what the real cost of the MCA has been, and whether restructuring is a realistic option. That assessment is valuable before committing to a legal strategy.
Resource 6: Chapter 11 Subchapter V Under Federal Law
Federal bankruptcy courts sitting in Maryland have handled a meaningful number of small business Chapter 11 cases under the subchapter V pathway introduced by the Small Business Reorganization Act of 2019. For a Maryland business with total debt within the statutory threshold, subchapter V allows the owner to propose a reorganization plan, retain equity in the business, and discharge unsecured MCA obligations over time. The MCA funder’s claim becomes one line in a plan confirmed by the court, not a unilateral demand backed by a UCC lien.
Resource 7: Maryland Courts and Unconscionability Defense
Maryland courts have recognized unconscionability as a defense to contract enforcement under the common law. The doctrine applies when a contract was formed under circumstances of extreme procedural imbalance and its terms are substantively unreasonable. An MCA agreement signed under financial duress, presented without meaningful negotiation, and carrying an effective cost that a court might find oppressive on its face can be challenged on these grounds in Maryland circuit court.
The defense is not automatic. It requires facts and argument. The court will want to know what the business owner understood at signing, whether alternatives were available, and what the actual repayment burden looked like relative to the business’s revenue. A competent attorney can develop those facts through discovery.
Resource 8: Assignment for the Benefit of Creditors
Maryland law permits a formal assignment for the benefit of creditors as an alternative to bankruptcy. In an ABC proceeding, the business transfers its assets to an assignee who liquidates them and distributes the proceeds to creditors according to a priority scheme. MCA funders are treated as secured or unsecured depending on whether their UCC filing is valid and perfected. The process is typically faster than bankruptcy and less expensive, and it can resolve MCA obligations as part of an orderly wind-down if the business cannot be saved.
The right resource depends on whether the goal is to save the business, settle the debt, or close with minimal personal exposure. Those three objectives require different tools. Maryland’s regulatory environment and court system offer more options than most states, but accessing them requires knowing which door to open first.
A first call to an attorney who handles Maryland MCA disputes costs nothing and forecloses nothing.
