Five years ago, a business owner comparing merchant cash advance offers had no legal right to see the total cost in writing before signing. Today, roughly a dozen states require exactly that, and more have bills pending. This guide maps the state-by-state landscape of commercial financing disclosure laws as of 2026: which states have them, what each requires, and how to use them when you're comparing funding offers. Because these laws change frequently, treat this as an orientation rather than a compliance manual, and confirm current requirements with the relevant state regulator or counsel.
Why These Laws Exist
Commercial financing, business loans, lines of credit, factoring, and merchant cash advances, was historically exempt from the federal Truth in Lending Act, which mandates standardized disclosures on consumer credit. That left a gap: a consumer taking a $15,000 car loan received more cost transparency than a business taking $150,000 in funding. Starting with California in 2018 and accelerating after 2022, states began filling that gap with commercial financing disclosure laws requiring providers to put the cost of funding in writing before the deal closes.
States With APR-Style Disclosure Laws: California and New York
California (SB 1235, with regulations effective December 2022) and New York (its Commercial Finance Disclosure Law, effective August 1, 2023) have the most demanding regimes. Both require providers to disclose an estimated annual percentage rate alongside the total cost, even for products like MCAs where repayment timing depends on revenue and any APR is necessarily an estimate. California has since tightened further: SB 362, signed in October 2025 and operative January 1, 2026, requires the APR to be restated whenever a provider quotes a charge, pricing metric, or financing amount on offers of $500,000 or less, and prohibits deceptive use of the terms 'rate' and 'interest'. Both states exempt banks and cap coverage at a transaction-size threshold ($500,000 in California; $2.5 million in New York).
States With Registration Plus Disclosure: Utah, Virginia, Connecticut, Texas
A second group pairs disclosure with mandatory provider registration. Utah's Commercial Financing Registration and Disclosure Act and Virginia's sales-based financing law both require providers, and in Virginia's case brokers as well, to register with state regulators, giving businesses a public record to check. Connecticut's law also covers sales-based financing specifically and requires both providers and brokers to register with the Department of Banking, but applies only to transactions of $250,000 or less, the smallest coverage cap in the country, concentrating protection on the deals small businesses actually do. Texas joined in 2025 with HB 700, focused specifically on sales-based financing, with provider and broker registration through the Office of Consumer Credit Commissioner required by the end of 2026. We cover the Texas law in detail in our HB 700 guide.
States With Disclosure-Focused Laws: Florida, Georgia, Kansas, Missouri, Louisiana
A third group requires cost disclosures without the APR mandate. Florida's Commercial Financing Disclosure Law (HB 1353) covers commercial loans, lines of credit, and receivables purchases up to $500,000, requires disclosure of the total financing amount, disbursement amount, finance charge, and total repayment, and bans brokers from collecting advance fees; our Florida guide covers it fully. Georgia (SB 90, enacted in 2023 with a January 1, 2024 compliance date), Kansas (SB 345, effective July 1, 2024), and Missouri (SB 1359, signed in 2024, which also requires brokers to register) enacted broadly similar disclosure statutes, and Louisiana added its own in 2025 — notably with no dollar cap and no entity exemptions at all. The common thread: the total dollar cost of financing must be in writing before you sign.
What's Pending
The map keeps expanding. New Jersey has repeatedly advanced legislation that would impose disclosure requirements across sales-based, closed-end, open-end, and factoring transactions, with civil penalties up to $10,000 for willful violations and exemptions for providers doing five or fewer transactions a year. Illinois and Maryland have also reintroduced commercial financing bills. Because bills die and return each session, check the current status with the state legislature before relying on any of this. At the federal level, the CFPB's small business lending rule under Section 1071 requires lenders to collect and report data on small business credit applications, but it is a data-collection rule rather than a borrower-facing cost disclosure, so the momentum on disclosure remains at the state level. If your state isn't listed above, assume a bill has at least been discussed.
What These Laws Do Not Do
None of these statutes cap the cost of commercial financing. Merchant cash advances are generally structured as a purchase of future receivables rather than a loan, which is why they are treated differently from lending products; how usury rules apply to any particular agreement depends on its structure and is a question for your attorney. In Florida the statute expressly states that a disclosure violation does not affect the enforceability or validity of the transaction, though other states vary, so check the specific statute. The laws give you information, not price protection. The responsibility to read the contract, understand the total repayment obligation, and confirm the payments fit your cash flow remains yours, and our guide to reading an MCA contract walks through it clause by clause.
How to Use Disclosure Laws When Comparing Offers
Wherever you operate, the practical playbook is the same. Ask every funder for the cost of financing in writing before you sign: the amount you'll actually receive after fees, the total you'll repay, and the payment structure. In disclosure states, this is your legal right; in the rest, a funder's willingness to provide it anyway tells you a great deal. Check registration where it exists. And be wary of any broker charging fees before funding is delivered, which several states now prohibit outright.
At Y Millennial Funding, we provide full terms in writing before signing to every business we fund, in every state, because that is how a direct funder should operate regardless of what local law requires. If your business generates $25,000 or more in monthly revenue, you can see your actual numbers, including total repayment, before committing to anything. Not all applicants qualify.
This article is for general informational purposes only and is not legal advice. State commercial financing laws change frequently, and their application depends on the specific facts of each transaction. Confirm current requirements with the relevant state regulator or qualified counsel.