Disclosure law
State-by-State Guide to MCA Disclosure Laws
California, New York, Utah, Virginia, Georgia, and Connecticut now regulate commercial financing disclosure. What each requires, in plain language.
November 22, 2024 · 10 min read
Why these laws exist
Commercial financing sat outside consumer lending disclosure rules for decades, which meant a business owner could sign a six-figure obligation without ever seeing an annualized cost. Beginning with California SB 1235 in 2018, states began requiring standardized cost disclosures for small-business financing.
The disclosures do not cap pricing. They force it into a comparable format before signing.
What is required, state by state
The regimes differ in thresholds and formatting but converge on the same core fields: amount funded, total dollar cost, estimated APR, payment amount and frequency, term, prepayment treatment, and in several states, broker compensation.
California (SB 1235, DFPI regulations)
Applies to commercial financing at or under $500,000. Requires a standardized disclosure with amount financed, APR, finance charge, payment amount, term, and prepayment policy, delivered at the time an offer is extended.
New York (Commercial Finance Disclosure Law)
Covers transactions at or under $2.5 million — the broadest threshold in the country. Requires APR, finance charge, total repayment, average monthly cost, and prepayment terms on a prescribed form.
Utah (Commercial Financing Registration and Disclosure Act)
Requires providers and brokers to register with the Department of Financial Institutions and to disclose total funds provided, total dollar cost, term, payment schedule, and prepayment charges. Utah requires registration rather than an APR calculation.
Virginia (HB 1027)
Requires sales-based financing providers and brokers to register and to give disclosures including total funds, finance charge, estimated APR, and reconciliation terms.
Georgia (SB 90)
Effective 2024, requires disclosure for commercial financing at or under $500,000 including total amount, total cost, payment structure, and prepayment terms, along with broker registration provisions.
Connecticut (SB 1032)
Requires registration for sales-based financing providers and brokers and standardized disclosures covering funds provided, total cost, APR, payment amounts, and reconciliation.
How to use the disclosure sheet
Read three fields first: total dollar cost, estimated APR, and prepayment treatment. Then confirm the payment amount and frequency match what you were told verbally.
Ask for the same sheet even where your state does not require it. Any funder willing to show it in California should be willing to show it in Florida.
FAQ
Questions worth answering.
Does Florida require MCA disclosure?
Florida has not enacted a commercial financing disclosure statute as of this writing. We provide the same cost breakdown to every applicant regardless of state.