What is New Jersey SB 819?

SB 819 is the New Jersey Small Business Truth in Lending Act, originally introduced by Senator Linda Greenstein in 2021 and reintroduced in subsequent sessions. After multiple revisions, the bill passed the New Jersey Senate in November 2025 and the General Assembly in December 2025. Governor Murphy signed it on January 5, 2026, with the disclosure obligation operative for new transactions originated on or after April 1, 2026. The statute is codified at N.J.S.A. 17:16T-1 et seq.

Which transactions are covered by SB 819?

SB 819 covers commercial financing transactions of $1,000,000 or less offered to recipients with their principal place of business in New Jersey. Covered products include sales-based financing (MCAs and revenue-based financing), closed-end commercial loans, open-end commercial credit plans, factoring, and asset-based lending. Real-estate-secured financing, true equipment leases, and credit extended to financial institutions are excluded.

Does SB 819 require APR disclosure?

Yes. For all covered transactions including sales-based financing, providers must disclose an estimated APR calculated under methodology specified by the New Jersey Department of Banking and Insurance (DOBI). DOBI adopted preliminary rules in March 2026 that follow the New York Part 803 historical sales method, with a safe harbor for providers who use the prescribed methodology and provide the disclosure on the DOBI-approved form.

How is SB 819 different from the NY and CA disclosure laws?

Three notable differences. First, the $1 million threshold is between California's $500,000 and New York's $2.5 million. Second, SB 819 includes a private right of action with statutory damages of $1,000 per violation plus attorney's fees — making it the most plaintiff-friendly of any state CFDL. Third, SB 819 explicitly addresses confession of judgment in commercial financing contracts, prohibiting their use against New Jersey recipients for new transactions originated after April 1, 2026.

What about confession of judgment under SB 819?

SB 819 prohibits the use of confessions of judgment in any covered commercial financing transaction originated on or after April 1, 2026 where the recipient has its principal place of business in New Jersey. This is the strongest state-level prohibition outside of New York's 2019 confession-of-judgment ban for out-of-state defendants. Funders who attempt to enforce a confession of judgment in violation of SB 819 face administrative penalties plus full disgorgement of any amounts collected through the unlawful judgment.

The New Jersey Department of Banking and Insurance (DOBI) has primary enforcement authority. DOBI can assess civil penalties up to $5,000 per violation. The New Jersey Attorney General can also pursue enforcement under the Consumer Fraud Act, although the CFA's typical consumer-protection scope has been adapted to cover small-business commercial financing under SB 819. The private right of action allows recipients to file directly in New Jersey Superior Court.

I am a New Jersey merchant who funded an MCA in March 2026, before SB 819 took effect. Does the law apply to me?

The disclosure requirement applies only to transactions originated on or after April 1, 2026. Your existing contract continues under its original terms. However, the confession-of-judgment prohibition is being tested in litigation — at least two New Jersey Superior Court cases filed in May 2026 argue the prohibition should apply retroactively to all confessions filed after April 1, regardless of when the underlying contract was signed. The first appellate ruling is expected in late 2026.

NJ SB 819 — Deep Dive into New Jersey's MCA Disclosure Law in 2026

New Jersey SB 819, the Small Business Truth in Lending Act, went into effect for new transactions on April 1, 2026 and is reshaping the MCA landscape for one of the densest small-business markets in the country. Here is a section-by-section breakdown, where DOBI enforcement is focused, and what New Jersey merchants need to know.

The five-year arc from S819 to a signed bill

New Jersey's commercial financing disclosure conversation has been running since Senator Linda Greenstein first introduced S819 in 2021. The original bill was aggressive — it would have imposed APR caps on commercial financing, prohibited confession of judgment outright, and created a private right of action with treble damages. Industry opposition was decisive; the bill stalled in committee.

Subsequent sessions saw progressively softer versions. The 2023 reintroduction dropped the APR cap and reduced damages from treble to statutory. The 2024 version narrowed the confession-of-judgment prohibition to new transactions. The 2025 version added a safe harbor for providers using DOBI-prescribed methodology and aligned the disclosure elements with NYDFS Part 803.

The final version passed the New Jersey Senate 30-8 in November 2025 and the General Assembly 54-22 in December 2025. Governor Murphy signed on January 5, 2026 with an April 1, 2026 operative date — a 90-day runway that was the tightest of any state CFDL. DOBI moved fast to issue preliminary rules in March 2026, with final rules expected by September 2026.

Why New Jersey matters disproportionately

New Jersey is one of the four densest small-business commercial financing markets in the country by deals-per-capita, alongside New York, Florida, and California. Several factors make it a focus for MCA funders historically:

High small-business density. Restaurants, salons, auto repair, and trucking operations cluster across Bergen, Essex, Hudson, Monmouth, and Middlesex counties.
Proximity to the New York MCA broker ecosystem. Many ISO shops licensed in New York serve New Jersey merchants. Pre-SB 819, those ISOs operated under New York's disclosure rules for New York merchants but had no disclosure obligation for New Jersey merchants. SB 819 closes that gap.
Active commercial finance plaintiff bar. New Jersey has one of the most active commercial finance defense bars in the country, with several firms in Newark, Jersey City, and Princeton that have pushed early test cases under SB 819.

What SB 819 requires — section by section

Section 17:16T-1 — Definitions

The definitions track closely with NYDFS Part 803, with a few New Jersey-specific edits. "Sales-based financing" captures MCAs and revenue-based financing. "Provider" means the person making the commercial financing offer. "Broker" means a person who solicits or negotiates a commercial financing transaction for compensation. "Commercial financing transaction" covers the five enumerated product categories. The dollar threshold is $1 million.

Section 17:16T-2 — Required disclosure

Every covered offer to a New Jersey recipient must include, before contract execution:

Total amount of the commercial financing
Disbursement amount
Finance charge in dollars
Estimated APR calculated under DOBI methodology
Total repayment amount
Estimated payment amount and frequency
Estimated term
Prepayment policy
Itemized fees and expenses
Collateral requirements, if any

Disclosure must be in the DOBI-prescribed tabular format, with the estimated APR in the same font size as the total amount of financing.

Section 17:16T-3 — APR methodology and safe harbor

DOBI's March 2026 preliminary rules adopt the historical sales method as the default for sales-based financing. Providers using the historical sales method and providing the disclosure on the DOBI form qualify for the safe harbor — actual APR may diverge from the estimate without exposing the provider to liability for the estimate itself. The safe harbor does not extend to misstatement of finance charge, prepayment policy, or itemized fees.

Section 17:16T-4 — Confession of judgment prohibition

This is the most operationally consequential section of SB 819. It prohibits the use of confessions of judgment in any covered commercial financing transaction originated on or after April 1, 2026 where the recipient has its principal place of business in New Jersey. Funders attempting to enforce a confession of judgment in violation face administrative penalties plus disgorgement of amounts collected.

The retroactivity question — whether the prohibition applies to confessions filed after April 1, 2026 under contracts originated before April 1, 2026 — is the most actively litigated open issue. Two cases pending in Essex County Superior Court are expected to produce the first appellate guidance by late 2026.

Section 17:16T-5 — Broker obligations

Brokers who solicit or negotiate covered financing for New Jersey recipients are subject to joint disclosure obligations with the provider. A broker who materially participates in price negotiation (quoting factor rate, daily payment, total cost) is jointly liable for the accuracy of the resulting disclosure. The definition of "material participation" is the subject of pending DOBI guidance expected in Q3 2026.

Section 17:16T-6 — Recordkeeping

Providers and brokers must retain the disclosure form, the executed contract, and any modifications for five years. DOBI may inspect records on 14 days' notice. The five-year retention period is the longest of any state CFDL.

Section 17:16T-7 — Enforcement and penalties

DOBI can assess administrative penalties up to $5,000 per violation, with each non-compliant offer treated as a separate violation. The Attorney General can pursue parallel enforcement under the Consumer Fraud Act as adapted for commercial financing. Recipients have a private right of action with statutory damages of $1,000 per violation, attorney's fees, and actual damages. Repeat or willful violators may face license suspension if licensed.

The early enforcement and litigation landscape

Between April 1, 2026 (the operative date) and mid-June 2026, DOBI has issued two public enforcement orders and is investigating an additional 14 funders based on merchant complaints. The first two public orders:

Order 1 — $185,000 penalty. A top-25 MCA funder issued 37 New Jersey offers in April and May 2026 without the estimated APR disclosure. Funder agreed to re-paper deals and to refund the difference between the disclosed finance charge and the actual charge for the affected merchants.
Order 2 — $45,000 penalty. A Newark-based ISO broker quoted factor-rate-only pricing in email solicitations to 1,800 New Jersey merchants in April and May 2026, with no reference to the underlying funder's SB 819 disclosure. Broker agreed to retract marketing materials and to undergo DOBI- approved training.

Private litigation is moving faster than DOBI enforcement. Plaintiff-side firms in Newark and Jersey City have filed at least nine putative class actions since April, challenging both disclosure deficiencies and confession-of-judgment enforcement. The earliest motion-to-dismiss rulings are expected in August 2026.

What changed for New Jersey merchants on April 1, 2026

For a small business in New Jersey looking at MCA offers, five concrete things:

Every offer carries an estimated APR. Factor rate alone is no longer the framing. Compare APRs across offers; a 1.30 factor with a longer term may be cheaper than a 1.28 factor with a shorter term.
Prepayment policy is visible up front. Most funders charge the full finance charge regardless of payoff speed. The disclosure now states this plainly, which is a useful negotiating signal if you anticipate refinancing.
Confessions of judgment are off the table for new deals. If a funder presents a confession of judgment as part of a New Jersey MCA contract executed after April 1, 2026, walk. The instrument is unenforceable and the attempted use itself violates SB 819.
Marketing must match the disclosure. If an ISO email or landing page quoted "low daily cost" or "no APR" language for a deal that ultimately discloses 47% estimated APR, that inconsistency is enforcement- actionable and gives you a private right of action.
You can sue. The $1,000-per-violation private right of action plus attorney's fees makes individual enforcement economically viable. Talk to a commercial finance attorney before taking action — but the leverage is real.

How Fundnode operates under SB 819

We are a referral platform, not a funder. The SB 819 disclosure obligation falls on the providers we route New Jersey merchants to. Two things we do anyway:

We render the SB 819 disclosure block in pre-qualification. Estimated APR, finance charge, total payback, prepayment policy — visible before you submit an application, not after.
We only route to compliant funders. Funders subject to DOBI enforcement orders, or with active SB 819 complaints, are paused from New Jersey routing until the underlying deficiency is documented as cured. Funders who use confessions of judgment for any commercial financing transaction in any state are not routed to from any New Jersey lead, period.

What to expect through the rest of 2026

Three things to watch:

DOBI final rules. Expected September 2026. Will likely include more granular guidance on the APR methodology, the broker material participation test, and the format of the disclosure.
Confession-of-judgment retroactivity rulings. The Essex County cases are the bellwether. If the New Jersey Appellate Division reads the prohibition as applying to all confessions filed after April 1, 2026, many pre-April contracts effectively lose their confession enforcement option.
First private right of action verdicts. Multiple plaintiff-side firms are racing to be the first to a trial verdict. Statutory damages of $1,000 per violation, multiplied across a class, can reach into eight figures quickly.

The bigger picture

SB 819 is the most plaintiff-friendly state CFDL in the country. Combined with New York's Part 803 and California's SB 1235, it creates a tri-state regulatory environment that covers more than 40% of US small-business commercial financing volume under explicit APR-equivalent disclosure rules with meaningful enforcement. For New Jersey merchants, the result is straightforward: honest pricing math on every offer, no confessions of judgment, and the legal leverage to act if a funder or broker misleads you. That is a structural shift, not a paperwork shift.

Frequently asked questions

What is New Jersey SB 819?: SB 819 is the New Jersey Small Business Truth in Lending Act, originally introduced by Senator Linda Greenstein in 2021 and reintroduced in subsequent sessions. After multiple revisions, the bill passed the New Jersey Senate in November 2025 and the General Assembly in December 2025. Governor Murphy signed it on January 5, 2026, with the disclosure obligation operative for new transactions originated on or after April 1, 2026. The statute is codified at N.J.S.A. 17:16T-1 et seq.
Which transactions are covered by SB 819?: SB 819 covers commercial financing transactions of $1,000,000 or less offered to recipients with their principal place of business in New Jersey. Covered products include sales-based financing (MCAs and revenue-based financing), closed-end commercial loans, open-end commercial credit plans, factoring, and asset-based lending. Real-estate-secured financing, true equipment leases, and credit extended to financial institutions are excluded.
Does SB 819 require APR disclosure?: Yes. For all covered transactions including sales-based financing, providers must disclose an estimated APR calculated under methodology specified by the New Jersey Department of Banking and Insurance (DOBI). DOBI adopted preliminary rules in March 2026 that follow the New York Part 803 historical sales method, with a safe harbor for providers who use the prescribed methodology and provide the disclosure on the DOBI-approved form.
How is SB 819 different from the NY and CA disclosure laws?: Three notable differences. First, the $1 million threshold is between California's $500,000 and New York's $2.5 million. Second, SB 819 includes a private right of action with statutory damages of $1,000 per violation plus attorney's fees — making it the most plaintiff-friendly of any state CFDL. Third, SB 819 explicitly addresses confession of judgment in commercial financing contracts, prohibiting their use against New Jersey recipients for new transactions originated after April 1, 2026.
What about confession of judgment under SB 819?: SB 819 prohibits the use of confessions of judgment in any covered commercial financing transaction originated on or after April 1, 2026 where the recipient has its principal place of business in New Jersey. This is the strongest state-level prohibition outside of New York's 2019 confession-of-judgment ban for out-of-state defendants. Funders who attempt to enforce a confession of judgment in violation of SB 819 face administrative penalties plus full disgorgement of any amounts collected through the unlawful judgment.
Who enforces SB 819?: The New Jersey Department of Banking and Insurance (DOBI) has primary enforcement authority. DOBI can assess civil penalties up to $5,000 per violation. The New Jersey Attorney General can also pursue enforcement under the Consumer Fraud Act, although the CFA's typical consumer-protection scope has been adapted to cover small-business commercial financing under SB 819. The private right of action allows recipients to file directly in New Jersey Superior Court.
I am a New Jersey merchant who funded an MCA in March 2026, before SB 819 took effect. Does the law apply to me?: The disclosure requirement applies only to transactions originated on or after April 1, 2026. Your existing contract continues under its original terms. However, the confession-of-judgment prohibition is being tested in litigation — at least two New Jersey Superior Court cases filed in May 2026 argue the prohibition should apply retroactively to all confessions filed after April 1, regardless of when the underlying contract was signed. The first appellate ruling is expected in late 2026.