Five years ago, the only commercial financing disclosure rule that mattered was California's. As of October 10, 2026, eleven states have a commercial financing disclosure law in effect, and Vermont has enacted one that takes effect July 1, 2027. Bills are pending in other states. The patchwork is real, the requirements differ enough to matter, and most borrowers we talk to don't know what their state's law entitles them to see before they sign.
This is the map as read on October 10, 2026, with the practical takeaway: what every borrower should expect to receive, and what to ask for if it's missing.
That's up from a single state (California) in 2018 to eleven states today — California, Connecticut, Florida, Georgia, Kansas, Louisiana, Missouri, New York, Texas, Utah, and Virginia — with Louisiana notable as the first CFDL with no dollar-amount ceiling on the transactions it covers.
What a "commercial financing disclosure" actually is
Commercial financing disclosure laws require providers (and, in many states, brokers) to deliver a standardized disclosure form before a small business owner signs a financing contract. Depending on the state and product, the form typically includes:
- The total amount of the financing and the disbursement amount (after fees deducted up front);
- The finance charge (the dollar cost of capital);
- The total payback amount (principal plus all fees and interest);
- An APR, in California and New York only (the other states' laws do not require one);
- The payment schedule — amount, frequency, term length;
- Prepayment terms — whether early payoff reduces cost, and by how much;
- Information about the broker (in states that cover broker disclosures).
The point is to let small business owners compare two offers using the same numbers — the same problem APR vs. factor rate creates when one product prices in factor rates and the other in APR.
States with a law, as read on October 10, 2026
Each entry below was read at the state legislature's own page, linked in the entry. Twelve states have enacted a law; eleven are in effect.
California — SB 1235 (2018)
Cal. Fin. Code §§ 22800–22807. Disclosures required since December 9, 2022, when the DFPI regulations took effect. Covers: factoring and receivables purchases (including sales-based financing), asset-based lending, commercial loans, open-end credit and lease financing. Offers of $500,000 or less. The disclosure must state an APR. Registration: none in the disclosure statute.
Connecticut — SB 1032, Public Act 23-201 (2023)
Conn. Gen. Stat. § 36a-861 et seq.. July 1, 2024; provider and broker registration by October 1, 2024. Covers: sales-based financing only. Financing of $250,000 or less. No APR is required in the disclosure. Registration: providers and brokers register with the Banking Commissioner.
Florida — CS/HB 1353 (2023), ch. 2023-290
Fla. Stat. §§ 559.961–559.9615. Transactions consummated on or after January 1, 2024. Covers: commercial loans, open-end credit and accounts-receivable purchase transactions. Exempt above $500,000. No APR is required in the disclosure. Registration: none; the Attorney General enforces.
Georgia — SB 90 (2023), Act 78
O.C.G.A. § 10-1-393.18. January 1, 2024. Covers: commercial loans, open-end credit and accounts-receivable purchase transactions. Exempt above $500,000. No APR is required in the disclosure. Registration: none.
Kansas — SB 345 (2024)
The Kansas Commercial Financing Disclosure Act (no K.S.A. section number confirmed). 2024, on publication in the statute book. Covers: commercial loans, open-end credit and accounts-receivable purchase transactions. Exempt above $500,000. No APR is required in the disclosure. Registration: none; the Attorney General enforces.
Louisiana — HB 470 (2025 Regular Session), Act 198
La. R.S. 9:3137.10. August 1, 2025. Covers: revenue-based financing only. No dollar cap in the statute. No APR is required in the disclosure. Registration: none.
Missouri — SB 1359 (2024), amended in 2025
RSMo 427.300. Disclosures and broker registration from February 28, 2025. Covers: commercial loans, open-end credit and accounts-receivable purchase transactions. Exempt above $500,000. No APR is required in the disclosure. Registration: brokers register with the Division of Finance.
New York — S5470-B (ch. 369 of 2020), amended by S898 (ch. 61 of 2021)
N.Y. Fin. Serv. Law §§ 801–812. In effect; the Department of Financial Services' implementing regulation is 23 NYCRR 600. Covers: sales-based financing, closed-end financing, open-end financing and factoring. Exempt above $2,500,000. The disclosure must state an APR. Registration: none in the disclosure statute.
Texas — HB 700 (2025)
Tex. Fin. Code ch. 398. September 1, 2025; provider and broker registration by December 31, 2026. Covers: commercial sales-based financing only. Offers under $1,000,000. No APR is required in the disclosure. Registration: providers and brokers register with the Office of Consumer Credit Commissioner.
Utah — SB 183 (2022)
Utah Code §§ 7-27-101 to 7-27-301. Registration and disclosures from January 1, 2023. Covers: commercial loans, open-end credit and accounts-receivable purchase transactions. Exempt above $1,000,000. No APR is required in the disclosure. Registration: providers register with the Department of Financial Institutions.
Virginia — HB 1027 (2022), ch. 516
Va. Code §§ 6.2-2228 to 6.2-2238. July 1, 2022; registration by November 1, 2022. Covers: sales-based financing only. Exempt above $500,000. No APR is required in the disclosure. Registration: providers and brokers register with the State Corporation Commission.
Vermont — H.648 (2026), Act 142
8 V.S.A. § 2247. Signed June 16, 2026; the commercial financing sections take effect July 1, 2027. Covers: sales-based financing and factoring. Exempt at $1,000,000 or more. The disclosure must state an annualized rate once the law takes effect. Registration: lender or loan-solicitation license from the Department of Financial Regulation.
Recent 2026 developments: California tightens further, New Jersey still pending
Three updates worth flagging. First, California added a second layer on top of its original CFDL: Senate Bill 362, effective January 1, 2026, restricts how providers can use the words "rate" and "interest" on offers of $500,000 or less. A provider can't call a non-annualized daily, weekly, or monthly charge an "interest rate" without clarifying it isn't annual, and can't quote a "factor rate" or "fee rate" when that figure diverges materially from the APR. It also requires re-disclosing the APR every time a provider states a new charge, pricing metric, or financing amount during the application process — not just once at the initial offer. As of this writing, California's Department of Financial Protection and Innovation had not yet issued clarifying regulations for SB 362, so expect some interpretive uncertainty in the first year.
Second, New Jersey's Senate Bill 1760, a proposed law modeled on the CA/NY pattern, remained pending — the New Jersey Legislature's bill history showed only its January 2026 introduction and committee referral when we read it on October 10, 2026. Illinois (HB 744) and Maryland (HB 1007) bills were also not enacted. It's worth watching if you borrow in New Jersey, but it isn't a compliance requirement yet. Bills like this move quickly; confirm current status with counsel for the state where you're borrowing rather than assuming a "proposed" law has become active.
Third, Vermont enacted H.648 (Act 142) on June 16, 2026. Its commercial financing sections take effect July 1, 2027 and cover sales-based financing and factoring under $1,000,000. That makes twelve states with an enacted law and eleven with one in effect.
What this means for borrowers — practical checklist
Whether or not your state currently has a disclosure law, every borrower should demand the disclosure-style information set before signing. Specifically:
Ask for the disclosure in writing. The product needs all of the following on a single document:
- Amount funded (the wire to your account, after fees)
- Total payback (every dollar leaving your account)
- Finance charge (dollar cost of capital)
- APR or estimated APR (required by law only in California and New York — ask for it anyway)
- Payment schedule (amount, frequency, business-day count)
- Prepayment treatment (discount, no change, or penalty)
If a broker is involved, ask for broker-specific disclosure. Some states require brokers to disclose their compensation; even where the law doesn't, the cleanest firms in the space will tell you on request. ClearValue Lending is a funding platform, so this category of disclosure question doesn't apply to us the same way it applies to traditional brokers.
Compare two offers side-by-side using the disclosure. The whole point of standardized disclosure is to let you do this. If two providers quote you different products and you can't tell which is cheaper, that's the disclosure problem the laws are designed to solve.
Confessions of judgment. If you see a confession-of-judgment clause in any commercial financing contract, slow down — they're banned against out-of-state defendants in New York since 2019 and are increasingly disfavored elsewhere. See What is a confession of judgment.
Read the prepayment language carefully. The single most expensive misunderstanding in commercial financing is assuming early payoff reduces cost. For most MCAs, it doesn't — the full factor-rate payback is owed regardless of speed unless the contract explicitly includes a prepayment discount.
Why this matters even more in 2026
Two reasons disclosure compliance is more important now than two years ago:
The state-law map is denser. Eleven states with a law in effect, one more enacted, and bills pending elsewhere mean more small business owners have disclosure rights than two years ago. Borrowers are more likely to know what to ask for.
Enforcement is real and visible. California's DFPI has issued written guidance and brought enforcement actions; the New York Department of Financial Services has done the same. The cost of non-compliance for a provider has gone up.
For ClearValue Lending's part: every covered offer that comes back from our funding lender network ships with the state-required disclosure, in writing, before you sign. The disclosure isn't a courtesy — it's how borrowers comparison-shop, and how regulators check whether the market is working.
If you're shopping financing now and your state is on the list above, ask for the disclosure form by name. Any reputable provider can produce it.
Where to read more
- What is a Merchant Cash Advance — the product these laws most often cover
- How to compare APR vs factor rates — the underlying math the disclosures expose
- 5 signs of a predatory lender — including provider behavior around disclosure
- The respective state regulator websites (CA DFPI, NY DFS, etc.) for the current rules in your state.
Keep reading
If you're going deeper on this topic, these are the next stops: