Where We Are Now
On July 11, 2024, Governor Mike Parson signed Senate Bill 1359, which includes and enacts the Missouri Commercial Financing Disclosure Law (section 427.300), in effect as of February 28, 2025.
The law imposes disclosure requirements for providers, and obligates brokers to register. However, it doesn’t ask for the opposite: providers don’t need to register, and brokers have no obligation to disclose requirements.
How We Got here
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. On February 23, 2023, the bill was engrossed and had 50% progression. However, it did not advance further.
As such, in December 2023, Missouri introduced a CFDL for the third time. Senate Bill 753 closely mirrored SB 187, and was ultimately included in SB 1359.
What Funders Need to Know
Subject
The law applies to commercial financing providers and brokers. Providers are defined as people who consummate more than five commercial transactions in Missouri during a calendar year.
Exemptions
Certain entities and transactions are not covered by these rules.
Entities include depository institutions, lenders regulated under the federal Farm Credit Act, and licensed money transmitters. People who engage in five or fewer transactions during a calendar year are also exempted.
Transactions that are exempted include those that are owed to a healthcare provider, over $500,000, and secured by real property among others.
Compliance Requirement
Brokers must register with the Missouri Division of Finance. This includes completing a form and paying a fee ($100). On or before January 31 of each year, brokers must complete a renewal registration form and pay a renewal fee ($50).
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
People who violate any of these provisions will be punished by a fine of $500 per incident. Fines cannot exceed $20,000 for all violations. Violating a provision after having received written notice of a prior violation from the attorney general is punished with a $1,000 fine. In this case, fines cannot exceed $50,000.
