Disclosure law
New York's Commercial Finance Disclosure Law
The broadest disclosure threshold in the country — up to $2.5 million — and what the prescribed form requires.
September 24, 2024 · 7 min read
Scope and threshold
New York's CFDL applies to commercial financing transactions of $2.5 million or less, capturing nearly the entire small and lower-middle-market financing universe rather than only the smallest deals.
Sales-based financing, closed-end financing, open-end plans, factoring, and lease financing each have their own prescribed disclosure format.
What must be shown
Amount financed, finance charge, annual percentage rate, total repayment amount, estimated term, payment amounts, average monthly cost, and prepayment charges — presented on the Department of Financial Services format.
For factoring and receivables purchases, the disclosure translates the discount into comparable cost terms.
Practical effect on New York merchants
Restaurants, contractors, and retailers in New York now receive an APR figure with every offer. Where two funders quote similar factor rates and different terms, the APR line usually exposes a meaningful cost gap.
New York also retains strong protections against confessions of judgment for out-of-state small businesses, which materially changed enforcement practice industry-wide.