Unlike most state disclosure laws, New York's covers brokers directly. Here's what that means for the borrower experience.
New York's S5470-B and the related AB 10118 require commercial financing brokers and providers operating in NY to disclose APR-equivalent rates, total cost, payment schedule, and prepayment treatment on every offer. Enforced by the New York Department of Financial Services (DFS). Also banned out-of-state confessions of judgment (COJs) under CPLR §3218 in 2019.
Most state commercial financing disclosure laws regulate the provider — the lender or funder writing the check. New York's S5470B is one of the few that pulls brokers into the same disclosure regime. For borrowers shopping financing in New York, that's a meaningful difference: the person you're talking to (often a broker, not a direct lender) has specific obligations to you that are baked into state law, not just into best-practice norms.
This post is a working borrower's guide to S5470B as it sits in March 2026 — what it covers, where the broker-specific obligations live, how it interacts with New York's older confession-of-judgment ban, and what to ask if your offer is in New York.
New York's commercial financing disclosure law (S5470B) took effect August 1, 2023 — six months after the NYDFS final regulations were published — and applies to commercial financing transactions of $2.5 million or less. That threshold is meaningfully higher than California's $500,000 cap under the CFDL framework, which means the New York law sweeps in larger working-capital deals, equipment financing, term loans, and most MCAs that ClearValue Lending's network actually touches.
The law applies to several product categories:
If the financing is consumer-purpose, it's covered by federal Truth in Lending and is outside S5470B. If it's commercial-purpose and under the threshold, it's in.
The disclosure that providers must deliver before signing covers the same basic numbers you'd see in California or any of the other eight states with active disclosure laws:
The methodology for computing APR on a sales-based product (where there's no fixed term) is set by NY DFS regulations and produces an estimated APR using assumed payment behavior. It's not perfect — see our note on APR vs. factor rate — but it gives borrowers a number they can compare across products that wouldn't otherwise have a common denominator.
This is where S5470B departs from most peer state laws. Brokers operating on covered New York transactions have their own disclosure obligations layered onto the provider's:
Brokers facilitating commercial financing in New York are subject to registration and licensing requirements that the New York Department of Financial Services has been spelling out through implementing regulations. Specifics vary by transaction type, but the high-level obligation is real: the broker isn't just a salesperson, they're a regulated participant in the transaction.
In a covered transaction with a broker, the borrower is entitled to know:
This is significantly more transparency than most other states require. In California, broker compensation disclosure exists in some forms but isn't the centerpiece of the law. In New York, broker-borrower transparency is part of the design.
Some MCA brands operate hybrid models — they look like a direct funder, but on certain transactions they're effectively brokering to a third-party syndicate. New York's framework makes those arrangements harder to obscure. If your "lender" is actually placing the deal with a different funder, you have a right to know.
For ClearValue Lending's part: we operate as a funding platform. That positioning is the same regardless of which state the borrower is in.
New York's broker-and-disclosure regime sits next to a separate, older protection: the 2019 amendment to CPLR 3218 that bars New York courts from accepting confessions of judgment against out-of-state defendants in commercial disputes.
A confession of judgment (COJ) is a contract clause where the borrower pre-agrees, in writing, to lose any future lawsuit by the lender. In the MCA world, COJs were the mechanism that let aggressive funders move from "missed payment" to "frozen bank account" in a matter of days, because the funder could file a pre-signed judgment in a friendly New York court. The 2019 reform substantially shut that down for non-NY borrowers — judgments confessed in New York can now only be entered against New York residents.
The COJ ban and S5470B are technically separate, but in practice they work together. S5470B forces transparency before signing. The COJ ban limits the most aggressive enforcement tool that previously existed after signing. Together, they make New York one of the more borrower-protective jurisdictions for commercial financing in 2026.
For a deeper look at how COJs work and where they still appear, see What is a confession of judgment in an MCA.
If you're a New York-based borrower, or your operating entity is in New York, six questions to put to any broker quoting you a deal:
1. Are you registered or licensed to broker commercial financing in New York? Get a yes/no answer and the registration number if applicable.
2. Who is the actual funder? Brokerages can place across multiple funders — that's normal and good. But you should know whose money you're taking and which entity will appear on your contract.
3. What is your compensation on this deal? Phrased neutrally — many brokers will tell you this on request even when not required to. Resistance to the question is itself information.
4. Will I receive an S5470B-compliant disclosure before I sign? The answer should be yes, for any covered transaction. It should arrive in writing, with all the required line items (total, finance charge, APR, payment schedule, prepayment treatment).
5. Is there a confession of judgment clause in the contract? For New York commercial transactions involving non-NY defendants, the answer should effectively be "no, and it wouldn't be enforceable anyway." For New York-resident borrowers, you can still see them — read carefully.
6. What's your prepayment treatment? Not strictly an S5470B-only question, but the most expensive misunderstanding in commercial financing. Make sure it's disclosed in writing.
If a broker can't or won't answer the first four, that's a tell. See 5 signs of a predatory lender for the broader pattern.
The New York Department of Financial Services (NY DFS) administers S5470B and handles consumer complaints related to commercial financing. If you believe a provider or broker violated their disclosure obligations on a covered New York transaction, NY DFS accepts complaints through its consumer-services channel.
DFS's enforcement record on commercial financing has been visible — administrative actions and consent orders are public — and the practical effect is that providers and brokers operating at scale in New York take the disclosure regime seriously. For borrowers, that's a real protection: if something feels off about a New York-covered deal, the regulator is reachable.
We did a full walk-through of California's CFDL elsewhere on the blog. The high-level comparison:
For most borrowers, the practical takeaway is the same in both states: demand the standardized disclosure, compare offers using it, and walk away from anyone who won't produce one.
New York's S5470B is the closest thing the U.S. has to a comprehensive commercial-financing transparency regime that covers both the lender and the broker. If your operating entity is in New York, use it: the broker on the other end of the call has obligations to you, and they're enforceable.
If you want to talk through whether a specific offer you're holding lines up with what S5470B requires, start an application and the matched lender will walk through it with you. Or run the numbers on the funding calculator before you take a call.
We'll keep the state disclosure-law map updated as new states come online.
If you're going deeper on this topic, these are the next stops:
APR-equivalent rate (calculated per the statute's methodology), total dollar cost of capital, all fees, payment amount and schedule, and prepayment policy. Disclosed before the borrower signs, in a standardized format.
Yes. Commercial financing is defined broadly to include sales of future receivables (MCAs) alongside traditional loans, lines of credit, and factoring.
Different statutes, same regulatory push. CPLR §3218 (2019) banned out-of-state confessions of judgment in NY commercial financing — predatory MCA enforcement was the precipitating policy concern. S5470-B (2023) added the disclosure layer on top of that consumer-protection foundation.
The New York Department of Financial Services (DFS). Violations carry fines and can lead to license revocation for registered providers.