Business Debt Restructuring in Florida: MCAs, COJs, and the Home-Court Advantages

Florida runs on small business, and Florida small business runs disproportionately on merchant cash advances. Restaurants on seasonal cycles, contractors on progress payments, trucking firms on fuel-lagged receivables: the exact cash flow shapes MCA marketing feeds on. When the stack stops working, Florida owners discover that where you are incorporated and where you bank changes the fight. This guide covers the Florida-specific terrain, and it is home terrain for us; our practice is based in Fort Lauderdale.

TL;DR

• Florida does not enter judgments by confession the way New York does. A COJ signed in an MCA contract usually gets filed elsewhere, then domesticated in Florida, which takes time you can use.
• Florida's garnishment and exemption rules give operating businesses real, if temporary, defensive room, and give individual guarantors meaningful protections, including the strongest homestead protection in the country.
• Florida usury law caps interest at 18 percent (25 percent above $500K), and while MCAs claim to be purchases rather than loans, Florida courts have shown willingness to look at substance over labels when the reconciliation rights are fake.
• Restructuring for a Florida business follows the standard sequence (audit, cash flow rebuild, ordered negotiation, documentation), with venue, service, and domestication questions layered on top.
• Local matters practically: banking relationships, courts, and the fact that many funders' collection firms work New York playbooks that translate imperfectly to Florida procedure.

The COJ question, Florida edition

The confession of judgment is the scariest clause in most MCA contracts: you pre-sign a judgment against yourself for use on default. Here is the Florida reality: Florida public policy has long refused confessed judgments in its own courts. What funders do instead is file the COJ in a friendly jurisdiction, most famously New York before its 2019 reform limited out-of-state debtor filings, and then attempt to domesticate the foreign judgment in Florida under the Uniform Enforcement of Foreign Judgments Act.

Domestication is not automatic rubber-stamping. It takes filing, notice, and a window in which a Florida debtor can raise the defenses available against foreign judgments. That procedural distance, between a COJ existing and a COJ becoming enforceable against your Florida accounts, is negotiating time. Owners who understand it negotiate; owners who do not freeze. If a COJ has been filed against you anywhere, the immediate sequence in COJ filed against me applies, with the Florida domestication clock layered in, and our Florida MCA defense guide covers the local specifics.

Account freezes and garnishment in Florida

Florida garnishment requires a judgment (with narrow prejudgment exceptions that require the creditor to post bond), served on your bank, followed by statutory notice to you and a window to claim exemptions. For businesses, the practical defense is structural: understanding which accounts are exposed, keeping payroll segregated, and responding to garnishment paperwork inside the deadlines rather than after the account locks.

For individual guarantors, Florida is famously debtor-protective: unlimited homestead protection for a primary residence (with acreage limits), protected wages for heads of family, and tenancy-by-the-entireties ownership that shields jointly held marital assets from the separate debts of one spouse. None of this makes a personal guarantee painless, but it changes settlement math dramatically; funders know what they can and cannot reach, and guarantee settlements price accordingly.

Usury and the purchase-versus-loan fight

Florida caps interest at 18 percent annually on obligations up to $500,000 and 25 percent above it, with criminal exposure at higher thresholds. MCA contracts avoid the cap by claiming to purchase future receivables rather than lend. The claim survives only if the contract actually behaves like a purchase: real reconciliation rights, contingent repayment, no absolute obligation. Where the reconciliation clause is missing or sham, the recharacterization argument (this is a loan, and at 90 cents of cost on a 6-month advance it is a wildly usurious one) becomes leverage. Florida litigation on these theories continues to develop, and you rarely need to win the case; you need the funder to price the risk of losing it into your settlement. This is exactly what a forensic audit is for.

Restructuring a Florida business, practically

The core sequence matches the national restructuring guide: audit every position, rebuild the cash flow number, negotiate in enforcement-power order, document everything, perform. Florida adds practical layers:

Seasonality is legitimate reconciliation evidence. A Naples restaurant's summer trough or a panhandle contractor's winter slowdown is documented revenue decline, which is precisely what MCA reconciliation clauses are contractually required to respond to. Florida's seasonal economy makes reconciliation enforcement unusually effective here.

Industry mix shapes the plan. Florida's restructuring files skew toward restaurants, construction, trucking, and auto: progress payments, equipment liens, and licensing considerations each bend the negotiation order.

Local banking still means something. Florida community banks and credit unions restructure their own paper with more flexibility than money-center servicing departments, especially with current financials on the table; the bank-side approach is covered in business loan restructuring.

When to move

Florida owners tend to call at one of two moments: when the stack first stops fitting (early, fixable, cheap) or when a domestication notice or garnishment package arrives (late, fixable, expensive). The difference in outcome between those two calls is larger than any other variable we see. If your Florida business is carrying stacked advances, get the position list to us before the paperwork starts moving. We are in Fort Lauderdale; this is the home field.