MCA Disclosure Laws

Virginia {#virginia}

Where We Are Currently

Effective **July 1, 2022**, Virginia’s **Sales-Based Financing Registration and Disclosure Act** (HB 1027; 2022 Va. Acts Ch. 516) requires providers and brokers of sales-based financing to **register** with the **Virginia State Corporation Commission (SCC)** and to deliver standardized disclosures when making a **specific offer** of financing. Covered transactions include merchant cash advances and other receivables-based arrangements repaid as a percentage of sales. The SCC’s implementing regulations became effective **January 19, 2023**. The law exempts depository institutions, transactions above **$500,000**, and providers that make **five or fewer transactions in a 12-month period** ([Va. Code § 6.2-2229(A)(4)](https://law.lis.virginia.gov/vacode/title6.2/chapter22/section6.2-2229/)).

How We Got Here

HB 1027 (2022) created “Sales-Based Financing Providers,” codified at Va. Code §§6.2-2228 to 6.2-2238; initial registration was due by November 1, 2022. ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/))

What Funders Need to Know

Subject

Applies to providers and brokers of sales-based financing (including MCA-style products). ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/))

Exemptions

Financial institutions; entities making ≤5 transactions in 12 months; a single transaction over $500,000. ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/section6.2-2230/))

Compliance Requirement

Register with the State Corporation Commission; follow SCC disclosure form/format rules.

Disclosure Requirements

Specified terms must be provided at the time of a specific offer; broker compensation disclosure is required. ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/))

Other Rules (optional)

SCC regulations prescribe disclosure layout and definitions (effective Jan 19, 2023).

Penalties

Enforcement by the SCC under Title 6.2.

Official Documents (links)

Virginia Code, Sales-Based Financing Providers (Chapter 22.1). ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/)) SCC Regulations implementing sales-based financing disclosures. ([Virginia Administrative Code](https://regulations.justia.com/states/virginia/title-10/agency-5/chapter-240/))

Expert Opinions and Analysis (links)

Troutman Pepper Hamilton Sanders LLP (via JD Supra): *Virginia Legislature Passes Sales-Based Financing Disclosure and Registration Requirements*. [JD Supra](https://www.jdsupra.com/legalnews/virginia-legislature-passes-sales-based-5665239/?utm_source=chatgpt.com)

Also helpful: *5 Things to Know About New Virginia Financing Law* on FunderIntel. [Funder Intel](https://www.funderintel.com/post/5-things-to-know-about-new-virginia-financing-law?utm_source=chatgpt.com)

Operator Checklist

• Confirm your offer qualifies as sales-based financing. ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/))

• Register (provider/broker) and use SCC-compliant disclosure forms.

• Apply exemptions (single transaction over $500,000; ≤5 in 12 months) where applicable. ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/section6.2-2230/))

• Capture timing at “specific offer” and retain signed disclosures. ([Virginia Code](https://law.lis.virginia.gov/vacode/title6.2/chapter22.1/))