Our thoughts at Onyx IQ about 2024: a wild year full of twists, turns and key moments that had the entire merchant cash advance industry talking.
Throughout the year, we kept our readers on their toes by sharing the most important MCA stories and expert analysis from Q1 2024, Q2 2024, Q3 2024, and Q4 2024.
Now, we’re taking a deeper dive into 2024 as a whole—focusing on the MCA boom in developing markets, the many dramatic ups-and-downs of state-level commercial disclosure laws, and the neverending saga of the CFPB’s “Final Rule.”
And of course, we really can’t ignore the first few weeks of 2025. We’ll touch on that too because—let’s face it— the MCA industry is moving faster than ever.
1. SME Funding Opportunities Skyrocket in Developing Economies
In 2024, we saw developing countries really lean into digital finance to better support small enterprises.
Among the most exciting developments? Merchant cash advances are making their way into the mix, unlocking unparalleled growth for SMEs—and MCA funders.
Here are just a few stories we shared in 2024:
- In Nigeria, 42 million micro, small, and medium-sized enterprises drive the economy, but many owners face challenges like incomplete documentation and no credit history. Yabx’s AI-powered platform helps enterprises create personalized credit scores so they can access flexible funding.
- In Indonesia, SMEs contribute a whopping 61% of GDP, but securing financing is a constant struggle. In response, TymeBank announced a digital funding model that aligns with government debt forgiveness programs. The company also plans to expand into the Philippines and Vietnam, using a hybrid model of digital services and physical kiosks.
- For years, many of South African 3 million SMEs have been hindered by sky-high borrowing costs and the struggle to provide collateral. In 2024, Preference Capital and Absa Bank announced a much-needed lifeline: A new online MCA product to help these enterprises evolve and thrive.
Meanwhile, companies like Cielo in Brazil and Kopo Kopo in Kenya are also demonstrating how effective integrating MCAs into payment systems can be. Using sales data to offer fast, flexible funding, they’re helping enterprises grow and navigate cash flow challenges.
Historically, cash-based transactions have made it tough for enterprises in developing countries to build credit profiles. With the rise of digital payments, more SMEs are able to accept credit cards—and therefore qualify for MCAs.
Ultimately, combining digital payments with merchant cash advances is a win for everyone involved: It fills the financing gap for SMEs, boosts financial inclusion, and drives economic development in these regions.
The future’s looking incredibly bright for SMEs in developing countries. And with the global MCA market expected to hit between $24B and $32.7B through 2032, this is the perfect time for merchant cash advance funders to ride that wave.
2. (Some) State-Level MCA Disclosure Laws Gain Momentum
In 2024, there was no shortage of action in legal world, as states brought in new laws and changes that could shake things up in a major way:
- Kansas and Connecticut both introduced new commercial disclosure laws on July 1, 2024.
- Just days later, Missouri’s new commercial financing law was signed by Governor Mike Parson. If all goes according to plan, the law should take effect on February 28, 2025.
These states join the growing wave of jurisdictions across the country working to bring more transparency and fairness to the commercial finance space.
That said, not all proposed bills had an easy ride in 2024.
RIP NC-H662
Introduced in April 2023, North Carolina’s Small Business Truth in Financing Act would have required disclosures of key details including total amount, finance charges, and repayment terms. The bill also proposed a few registration and enforcement provisions.
However, H662 appeared to hit a dead end in December 2024, stalling in committee and never moving forward.
The Bills That Just Won’t Quit
In 2024, we watched several bills get talked about, kicked around, shelved, and reintroduced like a game of legislative football:
- Mid-2024 saw some excitement over South Carolina potentially launching a commercial finance bill—but by year’s end, that buzz seemed to vanish into the ether. However, as we write this annual wrap-up, we’ve learned that Senate Bill 347 was just recently introduced.
- Last quarter, we shared New Jersey’s years-long challenges in securing its own state-wide commercial financing disclosure law. Senate Bill 1397 was introduced in January 2024. Its latest iteration, amended in December, pushes for APR disclosures as well as greater clarity over its many predecessors.
- In early 2024, Pennsylvania proposed amending the 1974 Loan Interest and Protection Law to require clearer funder disclosures and potentially remove the interest cap on funding under $50,000. House Bill 1792 was sent to the House Commerce Committee, and has remained there since.
- Louisiana made its own attempt at a commercial financial disclosure law, SB335, in March 2024. Unfortunately, the bill barely progressed before dying in the Chamber. Now, it’s listed online as “subject to call”—meaning the bill could be revisited later, but no word on when.
For now, we’ll just file all these under “not entirely sure where they’re headed.”
The Golden State’s Year of Action
Once again, California proved to be a major player in 2024, making headlines in the commercial finance regulation space:
- Senate Bill 1482, which proposed that funders and brokers register with the DFPI starting in 2026, hit a snag in November. After being sent to the Assembly and making some initial progress with committee approvals and amendments, it was officially shelved. Unless something changes, it’s on hold for now.
- And speaking of being on hold—last we heard, a judge sided with the state regarding California’s Commercial Financing Disclosure Law, prompting the Small Business Finance Association to appeal. The Department of Financial Protection and Innovation was expected to respond by August 30, 2024, but there have been no public updates since.
Meanwhile, California’s new Small Business Loan Match platform made waves for simplifying the SME funding process, receiving 5.8 million impressions in just two months.
Between tools like this and its financing laws, it’s clear that California is trying to raise the bar for MCA funders—ensuring that only vetted, reliable, and responsible providers remain in the mix.
3. Will CFPB’s Small Business Lending Rule Stand?
Since announcing the Small Business Lending Rule in 2023 (aka the Small Business Lending Data Collection Final Rule), the Consumer Financial Protection Bureau has fought many battles trying to make it law.
Now, after a tumultuous 2024 and early 2025, the chances of it being enacted on time—if at all—are looking increasingly slim.
First, A Bit of Context
If you recall, the CFPB’s final rule under Section 1071 of the Dodd-Frank Act originally required commercial funders to collect more detailed data on SME funding—including the race and gender of SME owners, and approval status.
The goal? To increase transparency in SME funding, uncover funding disparities across the U.S. (particularly in minority and underserved communities), and ultimately promote fairer access to credit.
Lawsuit Logjams Hold Up Rule
As could probably be expected, not everyone was in support of the new rule. As such, a legislative roller coaster ride ensued. Buckle in:
- In late 2023, the Revenue-Based Finance Coalition sued the CFPB, challenging its decision to classify sales-based financing, like merchant cash advances, as “credit,” and questioning how the rule would actually be enforced.
- One resolution sought to scrap the Final Rule altogether. However, in December 2023, President Biden vetoed the disapproval resolution, arguing it would harm small enterprise transparency and favor big banks.
- Then, in January 2024, the Senate failed to override Biden’s veto.
Throughout 2023 and 2024, the CFPB also found itself tangled up in a U.S. Supreme Court battle over its funding structure. The Court ultimately ruled in the agency’s favor, but the legal back-and-forth slowed down its ability to make and enforce rules.
So, while the Final Rule was originally set to go live on October 1, 2024, the CFPB announced an extension of the deadlines before that date.
New Compliance Dates, More Potential Delays
These were the new compliance deadlines announced in August 2024, to be phased in by funder volume size, from highest to lowest:
| Tier | Funder Volume Requirements | Compliance Date | First Filing Deadline |
| 1 | At least 2,500 covered originations in both 2022 and 2023, or both 2023 and 2024 | July 18, 2025 | June 1, 2026 |
| 2 | 500 to 2,499 covered originations | January 16, 2026 | June 1, 2027 |
| 3 | 100 to 499 covered originations | October 18, 2026 | June 1, 2027 |
However, there was more chaos to come.
On October 31, the Fifth Circuit Court of Appeals agreed to fast-track the Texas Bankers Association’s case against the CFPB in regards to the rule—and set oral arguments for early February 2025.
Rule in Limbo: The Tug-of-War Intensifies into 2025
Let’s be blunt: There’s been so much activity regarding the CFPB in the first six weeks of 2025, we’d be doing you a disservice if we didn’t mention it here.
- After Donald Trump’s re-election, he imposed a regulatory freeze effective January 20—halting new regulations and requiring a 60-day review by appointed agency heads before any new or unpublished rules can proceed.
- The CFPB filed an emergency notice with the Fifth Circuit in early February, requesting a pause on litigation over the rule. The reason? “Counsel for the CFPB has been instructed not to make any appearances in litigation except to seek a pause in proceedings.” In other words, they’re at a standstill.
- And most recently, in mid-February, the CFPB’s new leader effectively shut down the agency’s headquarters, instructing staff to stay home and refrain from working.
At this stage, there is major uncertainty regarding whether the Final Rule will ever be enforced at all. And not only that—the future of the agency itself also remains unclear.
Rest assured though, we will be closely monitoring developments throughout 2025, knowing how such changes could have significant implications for funders and SMEs.
Thrive Through Change: Navigate 2025 With Onyx IQ
2024 was certainly a year full of shifts and changes in the merchant cash advance world. Looking ahead, the road will undoubtedly continue to be rocky, with new laws and legal battles continuing to shape the industry.
However, one thing remains clear amid the chaos: The need for accessible and transparent financing for small enterprises is only increasing. And as the industry becomes more regulated and responsible, the opportunities for legitimate, reliable MCA funders to step up and thrive are expanding.
With Onyx IQ by your side, you’re not just watching industry changes unfold; you’re equipped to navigate them with confidence.
That’s because we provide you with the tools—built for MCA funders, by MCA funders—to ensure you’re always prepared to embrace the future of SME funding.
While the MCA world may be unpredictable, the future is bright for those who adapt.
Book a demo today and get ready for continued growth, innovation, and success in 2025 and beyond!
