The disclosure document that accompanies a merchant cash advance tells you what the product costs, or it tells you nothing at all. Which version you receive depends almost entirely on where your business is located and which state’s law governs the contract. Eight states have enacted disclosure requirements that apply to MCA transactions. The remaining states have not, and in those jurisdictions the funder’s only obligation is to honor whatever the contract itself contains.
California: The Template
California’s SB 1235, the first commercial financing disclosure law in the country, established the framework that other states have adapted. Before a merchant signs, the provider must disclose the total amount of funds provided, the total repayment amount, the estimated annual percentage rate, the payment amounts, the payment frequency, and the total cost of the financing expressed as a dollar figure. The Department of Financial Protection and Innovation administers the program.
SB 362, effective in stages through January 2026, added teeth. Providers cannot deploy the terms “interest” or “rate” in contexts that mislead. When quoting a price or fee following a specific offer, the APR must appear alongside it. The Small Business Finance Association challenged the APR disclosure requirement in federal court; a judge ruled in California’s favor in late 2023, and the appeal to the Ninth Circuit remains pending.
For a merchant in Los Angeles reviewing an MCA offer, the practical effect is substantial. The disclosure document converts a factor rate of 1.40, which communicates little, into an annualized cost that permits comparison with conventional financing.
New York: Disclosure Plus Enforcement
New York requires commercial financing providers to disclose the financing amount, the finance charge, the APR or estimated APR, the total repayment amount, the payment amounts and frequency, and any prepayment policies. Providers must also file annual reports. The state banned confessions of judgment against out-of-state borrowers, eliminating a tool that funders had used to obtain uncontested judgments in New York courts against merchants who had never appeared there.
The FAIR Business Practices Act, effective February 2026, layered enforcement authority on top of disclosure obligations. The combination means that a New York merchant receives both the information needed to evaluate the cost and the legal framework to challenge conduct that the state deems unfair or abusive.
Virginia: Registration and Dispute Resolution
Virginia’s statute covers sales-based financing under five hundred thousand dollars and requires provider registration with the State Corporation Commission. Disclosures must include the total financing amount, the disbursement amount after fees, the finance charge, the estimated APR, the total repayment amount, and the payment schedule. Virginia also prescribes dispute resolution procedures, a feature that most other disclosure statutes omit.
The registration requirement functions as a gatekeeping mechanism. An unregistered provider cannot legally offer MCAs to Virginia businesses, which gives the merchant an affirmative defense if the provider failed to register before executing the agreement.
Utah: Disclosure with a Private Remedy
Utah’s disclosure requirements track the California model in substance. Total funds, total repayment, estimated APR, fees, and payment schedules must be disclosed. Providers completing more than five commercial financing transactions in Utah per year must register with the Department of Financial Institutions.
The distinguishing feature is the private right of action. A merchant who receives deficient disclosures can pursue damages in state court without relying on a regulator to bring an enforcement action. In states where disclosure laws exist but enforcement budgets remain thin, this distinction determines whether the statute has practical force or remains symbolic.
Texas: Broad Disclosure and Structural Prohibitions
HB 700 requires disclosure of total funds provided, total repayment, estimated APR, and payment schedules. Providers and brokers must register with the Office of Consumer Credit Commissioner. The statute voids confession-of-judgment provisions and restricts automatic ACH debits. Implementing rules are due by September 2026.
The breadth of the Texas statute surprised observers who expected a disclosure-only approach. By combining disclosure with structural prohibitions on the most aggressive collection mechanisms, Texas positioned itself closer to New York than to the lighter-touch models adopted by some earlier states.
Maryland: The Two-Million-Dollar Threshold
Maryland’s Commercial Financing Disclosure Law, enacted in 2023, applies to transactions under two million dollars. Required disclosures include total repayment amount, estimated APR, and payment schedule. The law was modeled on California’s framework and is administered by the Office of Financial Regulation.
The two-million-dollar threshold captures most MCA transactions while exempting larger commercial financings that the legislature deemed less in need of disclosure protections. For the typical small business taking an advance of fifty or a hundred thousand dollars, the law applies.
Louisiana: No Exemptions
Louisiana’s statute, effective August 2025, requires disclosure of the annual cost metric, total repayment amount, and payment frequency for revenue-based financing transactions. The definition captures agreements under which a business forwards a percentage of sales or revenue with payment obligations that fluctuate according to volume.
Louisiana enacted its requirements without exemptions by transaction size, entity type, or provider volume. This stands in contrast to states like Connecticut, which exempted transactions above a certain threshold, and Utah, which applies only to providers completing more than five transactions per year. In Louisiana, the obligations attach to every qualifying transaction.
Missouri: Licensing as Disclosure Enforcement
Missouri requires MCA providers to obtain a license from the Division of Finance. Disclosure requirements cover the standard elements: total amount, repayment amount, fees, and payment schedule. But the licensing mandate transforms the disclosure obligation from a regulatory requirement into a condition precedent for enforceability.
A contract executed by an unlicensed provider may be voidable under Missouri law. For a merchant in default who discovers that the funder lacked the required license at the time of origination, the enforceability of the entire agreement becomes a contested question. That is not a theoretical concern. It is a defense that has altered outcomes in collection disputes.
The remaining states, which constitute the majority, impose no MCA-specific disclosure requirements. In those jurisdictions, the contract is the only source of terms. One must read it with the precision that opposing counsel would bring, because no regulatory document will arrive to supplement what the agreement fails to say. Understanding which disclosure protections apply to your specific transaction is the first step. A consultation costs nothing and begins that analysis.
