Can I Get an MCA With a Court Judgment Against My Business?
Sometimes. A judgment doesn't automatically end your chances, but funders treat it seriously, because a creditor with a judgment can levy your bank account and take the same money the funder expects to collect. Many funders want to see a payment plan in place or a plan to pay the judgment from the advance.
Why do judgments matter to a funder?
A court judgment gives the creditor tools to collect, like freezing or levying a bank account. If that happens during the life of an advance, the funder's daily payment bounces and your business is suddenly short on cash at the same time. So a funder weighs the size of the judgment against your revenue and asks whether it's being handled. Funders find judgments through public record searches and background reports, so there's no point in leaving it out.
What changes the funder's answer?
- The size of the judgment compared with your monthly deposits.
- Whether it's against the business, against you personally or both.
- Whether you have a signed payment arrangement and you're current on it.
- Whether the judgment is from a prior funder, which draws the most scrutiny.
- How old it is and whether anything has been collected yet.
Can you use the advance to clear the judgment?
Some owners use part of an advance to pay a judgment off and remove the risk of a levy. A funder that agrees to this usually sends the payoff directly to the creditor at funding and wants a satisfaction of judgment filed afterward. That route gives both sides confidence that the account is safe.
Is this legal advice?
This is general information, not legal advice. Judgment enforcement rules differ by state, and how a levy works, what's exempt and how long a judgment lasts all depend on where it was entered. Talk to a business attorney about your specific judgment before making a plan around it.
What about judgments against you personally?
A judgment against the owner rather than the business still matters, since most advances include a personal guarantee. Funders weigh it the same way: size, age and whether it's handled. A personal judgment from years ago with a satisfaction filed is usually a small note in the file. A recent one that's unpaid and large gets more attention, especially if a creditor is able to reach accounts you use for the business. Bring the paperwork. A satisfaction of judgment, a payment agreement or a court docket showing the case status answers most questions in one step.
How can Afterfirst help with this?
Call 877-FUND-654 and tell us what the judgment is for, the amount and whether you're on a payment plan. Send your statements and a copy of the judgment or the agreement. We'll tell you which funders will look at the file and whether clearing the judgment at funding is realistic.
What else do owners ask about this?
- Can I get an MCA if my business is being sued?
- Can I get a new MCA after defaulting on one?
- Do Zelle, Venmo and Cash App payments count for an MCA?
More short answers on this topic are on the your business and your file FAQ, and the funder fit checker runs the numbers for your own file.
Have a question we didn't answer?
Ask us on the call. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.