State commercial financing disclosure laws

Commercial financing disclosure laws require the company providing financing to a business to give that business a standard, plain-language summary of the cost before it signs. They were written to cover products that consumer lending law does not, including merchant cash advances, factoring, lines of credit and term loans to businesses.

Think of the disclosure as a cost box. Every provider in the state fills in the same fields the same way, so a merchant can compare a factor-rate advance with an interest-rate loan side by side.

Our guide to state disclosure laws, last updated October 11, 2026, follows Venable's March 2026 overview, which lists ten states: California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah and Virginia. New Jersey had a bill pending at the time. This list changes, so check the guide and counsel before relying on it.

The fields differ by state, but most disclosures cover the same core numbers:

• The total amount of financing provided.
• The amount actually disbursed to the business, after fees and any payoffs of existing balances (the net funding).
• The total repayment amount (for an advance, the RTR).
• The finance charge or total cost of the financing.
• Estimated payment amounts and frequency, and an estimated term where the payments vary.
• In some states, including California and New York, an estimated annual percentage rate calculated by the method the state's regulation sets.
• Prepayment terms and other fees.

In broad terms, these laws put the main duty on the provider, the funder or lender that extends the financing. The provider prepares the disclosure, calculates any required APR, delivers it and usually collects the merchant's signature or acknowledgment.

Brokers are not off the hook. Depending on the state, a broker may have to deliver the provider's disclosure unchanged, may be barred from collecting fees from the merchant before funding, may have to identify itself in advertising, and in Texas must register. Exemptions also vary: several laws apply only below a dollar threshold, and some exempt providers that do only a handful of deals a year. Your counsel should tell you which states and deal sizes catch you.

A worked scenario

A rep is placing a $90,000 advance for a landscaping company in California. The funder's contract package arrives with its California disclosure. The rep's job is to send the merchant that disclosure exactly as received, answer questions by pointing to its numbers, and keep a copy with a note of when it went out and when the merchant acknowledged it. If the rep quoted a different daily payment on an earlier call, the fix is to correct it in writing now, not to hope nobody notices.

In Ferrylend, a state disclosure is a document type you attach to the deal. When the merchant is in a state with a disclosure law, the deal cannot move to Merchant Reviewing Contracts until a state disclosure is on file (an owner or manager can override it, and the override is audit-logged). Per-deal disclosure tracking with delivery and acknowledgment dates is part of the compliance pack, which is Coming soon. See audit log and data security.