During these past years, more and more states across the U.S. have been adopting commercial financing disclosure laws. And the trend shows no signs of slowing down.
Mainly focused on transparency and disclosure requirements, these regulations have a huge impact on the merchant cash advance (MCA) industry.
At Onyx IQ, we’re committed to guiding MCA providers towards success in this changing landscape. Part of this effort means shedding light on the implications of these laws.
Below, you’ll find Onyx IQ’s state-by-state interactive map of all current financing disclosure laws, including what they are, and what they imply for your MCA funding business.
Click on states where disclosure laws have been either passed or proposed for a detailed look.
Note: that the aim of the map is to offer a summary of where things stand today. To gain a full understanding of provisions, be sure to consult each individual states’ complete rules.
This page is intended solely for informational purposes. Onyx IQ is not a law firm, and we do not provide legal services or advice. While Onyx IQ strives to ensure the accuracy and timeliness of this information, laws and regulations are subject to change, and discrepancies or inaccuracies may exist. As such, we cannot guarantee that the information is up to date. The information provided should not be considered a substitute for professional legal advice.
Effective since December 9, 2022, California’s legislation enforces the disclosure of specific information when extending a commercial financing offer of $500,000 or less. These regulations encompass various commercial financing transactions, including sales-based financing such as merchant cash advances. California was the first state to establish such safeguards for small business borrowers.
California’s Commercial Financing Disclosure Law (CFDL) came into effect four years after Governor Jerry Brown signed it in September 2018. The Department of Financial Protection and Innovation (DFPI) finalized the rules on June 9, 2022, leading to a six-month implementation period.
In December 2022, the Small Business Finance Association (SBFA) filed a lawsuit against the California DFPI Commissioner, claiming that the state’s custom formulas and disclosures lead to inaccuracies and confused customers. The lawsuit also argues that the federal Truth in Lending Act governs APR disclosures, potentially pre-empting these regulations.
Despite dismissal attempts in early 2023, a federal judge ruled in April 2023 that the case would proceed. Later that year, on December 4, the judge ruled in favor of the DFPI. Despite this setback, the SBFA persisted and filed an appeal with the United States Court of Appeals for the Ninth Circuit on December 29, 2023.
Meanwhile, Senate Bill 869 seeks to broaden licensing requirements for brokers handling commercial loans over $5,000. While brokers currently need licenses for specific commercial loans, this bill aims to extend these obligations to encompass more loan types.
The California Senate discussed the bill on January 18, 2024, and it was sent for further review.
Subject
The California legislation applies to entities who offer commercial financing—including non-bank partners and brokers.
Exemptions
Certain entities and transactions are not covered by these rules. This includes banks, depository institutions, loans backed by real estate, and lenders regulated under the federal Farm Credit Act.
Additionally, transactions below $5,000 or above $500,000 are exempt from these regulations. The rules also do not apply to individuals or businesses that engage in five or fewer relevant transactions in a 12-month period.
Compliance Requirement
Under current legislation, providers are not mandated to register to offer commercial financing in California. However, Senate Bill 869 may eventually require all commercial brokers to be licensed.
Disclosure Requirements
Providers must disclose information including the funding provided, finance charge, total payment amount, Annual Percentage Rate (APR), as well as other details akin to most other state disclosure laws.
Penalties
No penalties are stipulated in the law.
California Senate Bill 869, California Legislative Information.
California Financing Law, Department of Financial Protection & Innovation.
California Code of Regulations – Final, Department of Financial Protection & Innovation.
DFPI’s Commercial Financing Disclosure Regulations Approved to Become Effective as of December 9, 2022, Department of Financial Protection & Innovation.
California federal district court grants summary judgment for DFPI in lawsuit challenging state’s regulations requiring consumer-like disclosures for commercial transactions, Consumer Finance Monitor / Ballard Spahr LLP.
California Moving to License All Commercial Loan Brokers?, Mayer Brown.
California Commercial Financial Law Regulations About to Take Effect—What You Need to Know, Loeb & Loeb LLP.
New CA Commercial Financing Disclosure Regulations Take Effect, Pillsbury Law.
Square Peg, Round Hole: MCA Disclosures Under the California Commercial Financing Disclosure Regulations, Morrison Foerster.
Are You Ready? California Commercial Financing Disclosure Regulations to Take Effect in December 2022, Morrison Foerster.
Bill 1032, also known as SB1032, became Connecticut law on June 7, 2023. It will officially take effect on July 1, 2024, and specifically deals with disclosure requirements for sales-based financing (i.e., merchant cash advances) of $250,000 or less. It also requires providers to register with the state on an annual basis.
“An Act Requiring Certain Financing Disclosures” was first introduced by the House Banking Committee as its primary sponsor and co-sponsored by Senators Patricia Miller, John Kissel, Robert Sampson, Kevin Kelly, and Rep. Tom Delnicki. It went through the Senate between February and early June of 2023—it was passed by the House in a matter of days.
The Act was signed into law by Governor Ned Lamont on June 28, 2023. The Connecticut Act goes into effect on July 1, 2024.
Subject
The Connecticut law applies to providers—including commercial financial brokers—of sales-based financing products.
Exemptions
This law allows for some exemptions—including entities that conduct no more than five commercial financing transactions in a 12-month period.
Compliance Requirement
To do business in the state of Connecticut, providers must register with the state banking commissioner by October 1, 2024—and renew their registration every year.
Disclosure Requirements
Before making a final and binding offer, providers must give borrowers certain information. This information includes standard disclosures including the total amount of the loan and cost of borrowing, a repayment schedule, details about how much money brokers will earn from the transaction, and more. Providers are not required to disclose estimated APR.
Other Rules
The Connecticut law also includes some unique rules.
First, loan agreements cannot force borrowers to give up their right to a hearing over a prejudgment remedy. Historically, some lenders have added this verbiage into contracts, effectively enabling them to take money from borrowers’ bank accounts without going to court.
As well, Connecticut’s law allows the Department of Banking to recognize and use another state’s loan disclosure rules if they meet or exceed the requirements of Connecticut’s law. This is the first such rule of all state commercial disclosure laws passed—and may help save time and money for providers that have been following the rules of another state.
Penalties
Those who breach the Connecticut law may face civil penalties of up to $100,000 per violation.
Original Connecticut Senate Bill 1032, LegiScan Connecticut.
Amended Connecticut Senate Bill 1032, LegiScan Connecticut.
Connecticut Becomes Latest State to Enact a Commercial Financing Disclosure and Registration Law, Consumer Financial Services Law Monitor).
CT Passes New Regulations on Alternative Lenders, The Connecticut Mirror.
Connecticut May Ban Collection Tactic Used in Cash-Advance Loans, Bloomberg
What’s Really Happening With Disclosure Laws in Connecticut?, Monitor Daily.
Georgia, Florida, Connecticut Enact Commercial Financial Disclosure Laws, Alston & Bird.
The Florida Commercial Financing Disclosure Law (FCFDL) was enacted on July 1, 2023, and will apply to transactions on or after January 1, 2024. More specifically, the law applies to commercial closed- and open-end loans and accounts receivable purchase transactions in amounts of $500,000 or less.
The FCFDL was first introduced by Rep. Doug Bankson and the Commerce Committee. From March-May 2023, the bill was introduced and successfully passed in both the House and Senate. On June 26, 2023, Governor Ron DeSantis signed House Bill No. 1353 into law. This bill establishes part XIII of Chapter 559 within the Florida Statutes and acts as the framework for commercial loan disclosures.
Subject
The Florida law applies to providers who conduct more than five qualifying transactions per calendar year.
While commercial financing brokers are not specifically subject to the law’s disclosure requirements, they are subject to other regulations discussed below.
Exemptions
Common exceptions apply to depository institutions and their affiliated entities, leases and transactions secured by real property, the majority of floorplan financing arrangements, and money transmitters licensed in any state, among other categories.
Compliance Requirement
Unlike some other disclosure laws, Florida does not require providers to register with the state.
Disclosure Requirements
Providers must disclose the essential terms of financing, including total funds provided, dollar cost of financing, payment schedule, prepayment penalties, and others.
Providers are required to make only one disclosure at or before the completion of each commercial financing transaction. However, they are not obligated to revise or amend these disclosures in response to changes occurring after the transaction has been consummated.
Other Rules
The FCFDL includes a specific code of conduct aimed directly at brokers. Brokers must disclose their address and telephone number when advertising their services, and not use false or deceptive representations when offering or selling services or conducting business.
In addition, brokers are not allowed to assess, collect, or solicit an advance fee from a business in exchange for providing brokerage services.
Penalties
Offenses may result in fines of $500 per incident, subject to a maximum of $20,000 for combined violations. Continued violations may lead to additional penalties up to $50,000.
CS/HB 1353: Commercial Financing Product Brokers and Providers—Bill Text, The Florida Senate.
Bill History, The Florida Senate.
Bill Summary, The Florida Senate.
Florida Enacts Commercial Financing Disclosure Law Requiring Consumer-Style Disclosures for Certain Commercial Financing Transactions, Winston & Strawn LLP.
Florida enacts commercial financing disclosure requirements, Buckley.
Florida Enacts Commercial Financing Disclosure Law, Consumer Financial Services Law Monitor.
Originally known as SB 90, Georgia’s commercial financing disclosure law was signed into law on May 1, 2023. It applies to various types of commercial loans and accounts receivable purchases under $500,000. The law is scheduled to go into effect on January 1, 2024.
SB 90 was first introduced to amend Chapter 1 of Title 10 of the Official Code of Georgia Annotated. It was sponsored by a group of Senators including Clint Dixon, Steve Gooch, John Albers, Shawn Still, and John F. Kennedy. Read and passed by the Senate in February 2023, it was then introduced and passed by the House from late February through March 2023. Governor Brian P. Kemp signed the law on May 1, 2023.
Subject
The Georgia law applies to providers who conduct more than five commercial financing transactions in Georgia within a year. It also applies to someone who offers commercial financing on behalf of a bank through an online lending platform that they manage.
Exemptions
The law exempts a variety of entities and transactions. This includes—but is not limited to—providers who complete five or fewer transactions in any 12-month period, commercial financing transactions of more than $500,000, and commercial financing transactions secured by real property.
Compliance Requirement
Georgia’s law does not require providers to register with the state.
Disclosure Requirements
Georgia’s mandated disclosures are similar to those in the federal Truth in Lending Act (related to consumer credit transactions). Providers must share information including the total funding amount, total funds disbursed net of fees and costs, total amount to be paid to the provider, total dollar cost of the financing, payment schedule, and more.
The Georgia law does not require calculating or disclosing an annual percentage rate.
Penalties
Those who violate the Georgia law will face civil penalties of $500 per violation, capped at $20,000, with additional penalties for continued violations.
Senate Bill 90, Georgia General Assembly.
Selling and Other Trade Practices; Commercial Financing Disclosures, Georgia General Assembly.
Georgia Enacts Commercial Financing Disclosure Law, Mandatory Compliance Date January 1, 2024, JD Supra.
Georgia Introduces New Disclosure Requirements for Commercial Finance Providers, Husch Blackwell LLP.
Georgia Enacts Commercial Finance Disclosure Law, Extending Legislative Trend, Mayer Brown.
Georgia Introduces New Commercial Financing Disclosure Requirements, The National Law Review.
The Commercial Finance Disclosure Law (CFDL) in New York covers various types of commercial financing for amounts up to $2.5 million. This includes sales-based financing (like merchant cash advances), closed-end and open-end financing, factoring transactions, lease financing, and more.
The most recent version—which introduced several new and modified regulations—went into effect on August 1, 2023.
In 2020, New York introduced the CFDL, which was later expanded to encompass various commercial financing transactions. After seeking input from stakeholders, the New York State Department of Financial Services (NYDFS) adopted these regulations on February 1, 2023.
Senator Kevin Thomas sponsored this legislation, working closely with Superintendent of Financial Services Adrienne A. Harris and the Department of Financial Services. The final rules bring crucial changes, altering the landscape of commercial financing transactions in New York.
In January 2021, Senator James Sander Jr. proposed Senate Bill S1061B, requiring all commercial lenders to be licensed and regulated by the Department of Financial Services. This bill was referred to Senate Finance in May 2022.
Subject
This law applies to non-bank entities that provide commercial financing, as well as those who promote such offers on behalf of others. Regulations only apply to commercial financing transactions when either the borrower’s business is mainly run from New York, or if the recipient is an individual who legally resides in New York.
Exemptions
Financial institutions (i.e., banks, industrial loan companies, savings and loan associations, and credit unions) and subsidiaries are exempt from the law, as are lenders regulated under the federal Farm Credit Act, providers who make no more than five commercial financing transactions in New York in a 12-month period, and others.
Exempted transactions include—but are not limited to—real estate-secured commercial financing transactions, true leases, and commercial financing transactions exceeding $2.5 million.
Compliance Requirement
There is no state registration requirement under the New York CFDL. However, as mentioned above, this may change if Senate Bill S1061B eventually passes.
Disclosure Requirements
The New York regulations mandate Truth in Lending-like written disclosures when providers extend financing offers—including the total amount of commercial financing, disbursement amount, the finance charge, the annual percentage rate, among other items. In transactions involving a broker, providers must also disclose how and by whom brokers will be compensated.
Penalties
Fines may be up to $2,000 for each violation, or as much as $10,000 if the violation was intentional. In addition to fines, the NYDFS may mandate restitutions or issue legal orders.
Senate Bill S1061B, The New York State Senate.
Disclosure Requirements for Certain Providers of Commercial Financing Transactions – Bill Text, New York Department of Financial Services.
Superintendent Adrienne A. Harris Adopts Updated Regulation for Disclosure Requirements for Commercial Financing, New York Department of Financial Services.
New York Finalizes Commercial Financing Disclosure Regulations, JD Supra.
New York’s “Small Business” Commercial Financing Disclosure Law, Holland & Knight.
New York Enacts APR Disclosure Laws, Grant Phillips Law.
SB183, also known as the Commercial Financing Registration and Disclosure Act (or CFRDA), went into effect January 1, 2023. It applies to various commercial financing providers—including those who offer merchant cash advances—in amounts of $1 million or less.
The Utah Act was sponsored by Senator Curtis S. Bramble and Rep. Joel Ferry. It was first introduced to the Senate on February 8, 2022, followed by an introduction to the House less than two weeks later. Approved by both chambers in early March 2022, the Act was then signed by Utah Governor Spencer Cox on March 24, 2022. The law went into effect on January 1, 2023
Subject
Utah Act regulations apply to any person who conducts more than five commercial financing transactions in Utah during the calendar year.
Exemptions
A rather wide range of persons and transactions are exempted from the Utah Act. This includes (but is not limited to) companies like Banking Depository Institutions and subsidiaries, as well as providers who finance the purchase of commercial, construction or agricultural equipment. The law also doesn’t apply to merchant cash advances that are secured by real property.
Compliance Requirement
To do business with Utah customers, providers must apply for a commercial financial license, register with the Utah Department of Financial Institutions, and maintain such registration annually.
Disclosure Requirements
Before consummating a commercial financing transaction, providers must disclose terms including the total amount of funds provided and disbursed to the business, total amount to be paid to the provider, and the manner and frequency of each payment. Any commissions paid to a broker must also be disclosed. However, the law does not require APR disclosure.
Penalties
Non-compliance will cost providers $500 per violation, up to $20,000 for all violations that arise from the same transaction documentation or materials. However, higher penalties may apply if the provider continues to violate the Utah Act.
SB 183 Bill Text, Utah State Legislature.
Commercial Financing Registration, Nationwide Multistate Licensing System and Registry.
Utah Governor Signs Commercial Financing Registration and Disclosure Act, JD Supra.
Utah Enacts Commercial Financing Disclosure Law with a Registration Obligation, Mayer Brown.
Utah Enacts Commercial Finance Disclosure and Registration Law, Manatt.
Registration Begins Under Utah’s Commercial Financing Registration Act, Consumer Financial Services Law Monitor.
Also known as House Bill 1027, Virginia’s commercial disclosure law is narrowly focused on regulating sales-based financing—specifically, merchant cash advances for less than $500,000. Providers must register with the Virginia State Corporation Commission, ensure up-front disclosures about financing terms, and follow specific dispute-resolution procedures.
Introduced by delegate Kathy Tran, the Bill was first read and then passed by both the House and Senate between February and March 2022. It was then signed into law by Governor Glenn Youngkin on April 11, 2022. The law went into effect on July 1, 2022.
Subject
The Virginia law applies to providers of sales-based financing (i.e., merchant cash advances), including sales-based financing brokers.
Exemptions
The law does not apply to providers who make five or less MCA transactions in any 12-month period, nor to financial institutions such as banks or credit unions. Merchant cash advances over $500,000 in value are also exempted.
Compliance Requirement
All MCA providers (including sales-based financing brokers) must register with the Virginia State Corporation Commission on an annual basis.
Disclosure Requirements
Providers are required to disclose 9 specific terms at the time of offering an MCA to a merchant. These disclosures resemble those required for sales-based financing providers under other recent state laws. The Virginia law does not require APR disclosure.
Other Rules
Virginia’s law also includes rules for settling disagreements between funders and borrowers. If a borrower decides to take legal action, such activity must occur within the state.
The law also limits how companies can use arbitration to solve problems. For example, funders must pay all arbitration costs, and cannot make borrowers travel far away to receive arbitration.
Penalties
No penalties are stipulated in the law.
House Bill 1027 (HB 1027), Virginia’s Legislative Information System.
Written disclosure statement required, Code of Virginia.
Sales-Based Financing Disclosure Form, Administrative Code.
Virginia Enacts Merchant Cash Advance Registration and Disclosure Law, Mayer Brown.
Virginia Legislature Passes Sales-Based Financing Disclosure and Registration Requirements, Consumer Financial Services Law Monitor.
On February 10, 2023, the Illinois Senate introduced Senate Bill 2234—the Small Business Truth in Lending Act. This bill, sponsored by Senator Christopher Belt and co-sponsored by Senator Laura Ellman, follows in the footsteps of similar laws in California and New York.
It proposes requiring consumer Truth in Lending-like disclosures for commercial financing transactions under $2.5 million. The Act proposes that providers who violate the rules pay up to $20,000 for each violation.
On March 31, 2023, the bill was re-referred to the Senate Assignments Committee. In January 2024, Senator Mattie Hunter was added as Chief Co-Sponsor, and the bill was reassigned to Financial Institutions.
Full Text of HB3064, Illinois General Assembly.
Illinois Senate Bill 2234, LegiScan.
Illinois Commercial Financing Disclosure Bill Introduced, Dreher Tomkies LLP.
Senate Bill 245, known as the Commercial Financing Disclosure Act, was introduced February 13, 2023. It was then referred to the Committee on Financial Institutions and Insurance on February 14, 2023.
The bill was then reintroduced as SB345 in January 2024, with a hearing held on January 24, 2024.
This bill aims to introduce requirements for disclosures during commercial financing transactions, registration with the state bank commissioner, impose civil penalties, and grant authority for enforcement by the attorney general.
The Bill is sponsored by the Committee on Federal and State Affairs and was first introduced by Senator Chase Blasi.
SB 245, Kansas Legislature.
Full Text of Senate Bill No. 245, Track Bill.
Fiscal Note for SB 245 by Senate Committee on Federal and State Affairs, Kansas Legislature.
SB 345, Kansas Legislature.
Full Text of Senate Bill No. 345, Kansas Legislature.
Fiscal Note for SB 345 by Senate Committee on Federal and State Affairs, Kansas Legislature.
Sponsored by Senator Ben Kramer, Senate Bill 496 aims to require lenders to provide consumer-style disclosures for various commercial loans to SMBs under $2.5 million. So far, the bill’s mandated disclosures include annual percentage rate (APR) calculations, repayment terms, and other related items.
Maryland’s Senate unanimously approved the bill on March 15, 2023, followed by a hearing by the House Economic Matters Committee on March 28, 2023.
Mississippi’s House Bill 1271, titled “Commercial Financing Disclosure Law,” was first introduced with the goal of ensuring full disclosure of contract terms. However, the bill died in committee on January 31, 2023, after being referred to the Business and Financial Institutions Committee on January 16, 2023.
House Bill 1271, Mississippi Legislature.
In 2022, Missouri State Senator Justin Brown introduced a bill that would have imposed certain mandatory disclosure requirements for commercial financing transactions. Ultimately, the bill failed to advance.
On December 1, 2022, Senator Brown reintroduced a similar bill—known as SB 187—requiring registration of commercial financing brokers. The updated bill also proposed imposing a list of mandatory disclosure requirements in commercial financing transactions, including total amount of funds, disbursement details, and more.
SB 187 was more aligned with Utah’s disclosure requirements versus the stringent requirements of California and New York. As of February 23, 2023, the bill was engrossed and had 50% progression. However, it did not advance further.
As such, in December 2024, Missouri introduced a CFDL for the third time. Senate Bill 753 closely mirrors SB 187, with a crucial aspect involving mandatory broker registration. Bill 753 also wants to add an exemption to certain types of loans, including ones for financing insurance premiums.
Missouri Senate Bill 753, Missouri Senate.
SB 753 Bill Summary, Missouri Senate.
Insurance Premium Finance Exemption—Missouri Commercial Finance Disclosure Legislation, National Law Review.
Missouri Senate Bill 187, LegiScan.
Missouri State Senator Reintroduces Commercial Financing Disclosure Bill, Consumer Financial Services Law Monitor.
Commercial Financing Disclosure and Broker Registration Bill Introduced in Missouri, Husch Blackwell.
Missouri Joins Other States Legislative Debates Concerning Commercial Finance Disclosure, Leasing News.
In New Jersey, efforts to advance a commercial financing disclosure bill have been ongoing for more than five years.
The penultimate iteration, Senate Bill 819, was introduced on January 18, 2022, by Senate Majority Whip Troy Singleton. However, it died in committee.
The latest version, Senate Bill 1397, was once again introduced by Singleton on January 9, 2024. It was then referred to the Senate Commerce Committee.
Similar to Virginia’s legislation, the New Jersey bill mainly targets sales-based financing and aims to ensure transparency in such transactions by mandating APR disclosure.
There has been a 25% progression since its introduction.
New Jersey Senate Bill 1397, LegiScan.
Full Text of New Jersey Senate Bill 1397, New Jersey Legislature.
New Jersey Senate Bill 819, LegiScan.
Introduced on May 11, 2021, the Small Business Truth in Financing Act—aka NC H662—mirrors California and New York laws, mandating commercial financing disclosure. However, unlike its counterparts, this bill would mandate registration and examination by the Commissioner of Banks for covered lenders.
Sponsored by Representative Jennifer Balkcom, the bill passed its first reading in the NC House on April 18, 2023, and was then referred to the Banking Committee.
North Carolina House Bill 662, LegiScan.
Full Amended Text of North Carolina House Bill 662, LegiScan.
On October 24, 2023, the Pennsylvania House of Representatives introduced an amendment to the 1974 Loan Interest and Protection Law (LIPL), known as the Commercial Finance Disclosure Law (CFDL) or House Bill 1792.
This short, two-section amendment mandates specific disclosures by lenders to small businesses (but notably lacks the requirement to disclose the entire loan amount) and applies to various commercial transactions. The proposed bill does not make exemptions for banks or specific types of transactions.
If the LIPL and CFDL merge, the interest cap on business loans under $50,000 may be lifted. Additionally, House Bill 1792 stands out as it would allow borrowers to sue lenders for failing to provide necessary disclosures.
The bill’s primary sponsor is Kristine C. Howard.
House Bill 1792, Pennsylvania General Assembly.
Will Pennsylvania Be the Next State to Adopt a Commercial Disclosure Law?, Leasing News.
Private Right of Action Anomaly — Proposed Pennsylvania Commercial Finance Disclosure Law, Womble Bond Dickinson.
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