Most business owners who receive an MCA summons read the amount claimed, feel the dread, and stop reading. Everything else in the document receives the same inattention. That is a mistake, because the rest of the document contains facts and assertions that determine the shape of the defense.
Six parts of the summons and complaint deserve careful attention before you do anything else.
The Caption and Court Designation
The caption identifies the plaintiff, the defendant, the court, and the index or docket number. The court designation matters for two reasons. First, it tells you which procedural rules govern the timeline and the format of your response. Second, it tells you whether the funder has sued in a jurisdiction with a developed body of MCA case law or in a court where these arguments will be presented for the first time.
Most MCA agreements include a New York forum selection clause, which means the case will appear in a New York court regardless of where your business operates. New York’s Supreme Court and its commercial division have issued more substantive MCA opinions than any other court system in the country. That density of precedent can work in a defendant’s favor.
The Cause of Action Alleged
The complaint’s substantive section will allege breach of contract, account stated, or both. Breach of contract claims require the funder to prove the agreement exists, that you failed to perform, and that they were damaged. Account stated claims are sometimes treated as a simpler path to judgment, requiring only that the funder show an agreement on the balance owed.
What the complaint will not mention is usury. It will not describe the effective interest rate embedded in the daily debits. It will frame the transaction as a purchase, not a loan, and it will characterize your payments as remittance of purchased receivables rather than loan repayment. That framing is the starting point for the recharacterization defense, and recognizing it on the page is the first step in building a response.
The Personal Guarantee Allegations
Virtually every MCA agreement includes a personal guarantee executed by the business’s principal. The complaint will assert this guarantee as an independent basis for judgment against you personally, not merely against the business entity. This is significant because it means a judgment can attach to your personal assets, not only to business accounts and receivables.
Where the underlying agreement is successfully recharacterized as a criminally usurious loan, the personal guarantee falls with it. But until that recharacterization is established, the guarantee is a live liability and one of the primary reasons MCA funders pursue litigation rather than simply collecting against the business.
The Claimed Balance and Fee Structure
The complaint will state a specific dollar figure as the amount due. Examine that figure against your payment history. MCA funders sometimes claim the full original purchased amount minus only a partial credit for payments made, or they include collection fees and attorney fees that may not be authorized by the agreement’s actual terms.
The claimed balance in the complaint is an opening position, not a final accounting. Reconciliation errors, unauthorized fees, and disputed payment credits are all proper subjects for the answer and counterclaims.
The Service of Process Details
The affidavit of service filed with the court describes how and when papers were delivered. If service was accomplished by nail-and-mail — affixing papers to the door of the business and mailing copies — there are specific procedural requirements under CPLR Section 308 that must have been satisfied. Defective service is a jurisdictional issue and a legitimate ground for contesting the court’s authority over you.
This is not a technicality deployed as a delay. Courts take service requirements seriously because they protect the due process right to notice. If the affidavit of service describes something that did not happen, or describes a method that was not properly completed, that is a defense worth raising.
The Prayer for Relief
The final section of the complaint states what the funder is asking the court to award. Beyond the principal balance, this section typically requests prejudgment interest, attorney fees, and costs. The entitlement to attorney fees depends on whether the MCA agreement contains a fee-shifting clause, which many do. Understanding the full scope of what the funder seeks is essential to evaluating the settlement mathematics on the other side of the defense.
A first consultation with an MCA defense attorney will walk through each of these sections in the context of your specific agreement. The documents contain more information than they appear to at first reading.
