Common red flags in MCA contract terms, explained clause by clause

Locate any affidavit or authorization for judgment and ask counsel to assess it. New York CPLR 3218 imposes conditions on this procedure. Do not assume that every signed document is enforceable, that an older agreement is exempt from current rules, or that judgment occurs on a universal timetable.

Compare the security agreement with any public financing statements. A filing does not itself seize property. Check the specific assets, assignments, and release terms rather than assuming every agreement covers all assets.

Find the revenue definition, calculation period, request process, required records, and response terms. A reconciliation clause is relevant to legal analysis, but its existence alone does not decide whether a transaction is a loan.

Identify who signed, in what capacity, and what events trigger each guarantee. Business nonpayment does not automatically establish every guarantor’s liability or what property is available for enforcement.

Review banking-change, additional-financing, information, and remittance provisions. Reconcile the cash received, amounts paid, claimed balance, and additional charges. Have proposed modifications reviewed before signing.