If you searched "SB 1280" — read this first
A lot of industry coverage (ours included, until we corrected it) cited SB 1280 as Texas's commercial financing disclosure law. It isn't. SB 1280 was an introduced bill in the 2025 session that never became law. The bill that passed is HB 700, signed by the governor on June 20, 2025. Most of its provisions took effect September 1, 2025; providers and brokers must complete OCCC registration by December 31, 2026. Everything below describes HB 700 — the law that actually binds funders in Texas.
The headline
Since September 1, 2025, providers and brokers of sales-based financing (which includes most MCAs, revenue-based financing, and several adjacent products) offering deals under $1 million in Texas must provide standardized cost disclosures to every merchant they fund, and must register with the Office of Consumer Credit Commissioner (OCCC) by December 31, 2026.
This puts Texas alongside California, New York, Utah, Virginia, Connecticut, Florida, Georgia, Kansas, and Missouri as one of ten states with an enacted commercial-financing disclosure law. One important nuance most coverage misses: only California and New York require an APR-equivalent in the disclosure. Texas does not — HB 700 mandates standardized total-cost disclosure and expressly bars the Finance Commission from capping rates.
What changes for you as a merchant
Four concrete things:
- Total cost of capital is broken out. The funded amount, total dollar cost of the financing, payment schedule, and fees must be itemized in a standardized disclosure on every covered offer under $1M. Note what's not required: an APR-equivalent. Texas chose standardized dollar-cost disclosure instead — you'll still need to compute the annualized cost yourself (or use a platform that does).
- Confession-of-judgment clauses are void. HB 700 voids COJ provisions in covered sales-based financing contracts — a merchant protection that goes beyond what most disclosure states offer.
- ACH auto-debit is restricted. A provider can't auto-debit your bank account unless it holds a perfected first-position security interest. That kills a common leverage tactic in stacked-deal collections.
- Violations carry real penalties. Up to $10,000 in civil penalties per violation, enforced through the OCCC registration regime.
What doesn't change
- Approval criteria — funders still underwrite the same way
- Factor rate ranges — disclosure changes pricing transparency, not pricing
- Funding speed — most modern funders are already compliant and shouldn't slow down
- APR opacity — unlike California and New York, Texas does not force funders to quote an APR-equivalent, so you still have to ask for it or compute it
What to ignore in the noise
Three pieces of misinformation you might encounter:
- "Texas SB 1280 requires APR disclosure." Wrong twice over. SB 1280 died; the enacted law is HB 700. And HB 700 requires standardized cost disclosure, not an APR-equivalent — the statute explicitly bars the Finance Commission from capping rates.
- "Texas MCAs are about to disappear." They're not. The law regulates disclosure, not the existence of the product. Established funders adapted; new entrants register and operate.
- "Get funded now before the rules kick in." The disclosure rules kicked in on September 1, 2025. Anyone telling you to rush before they take effect is either confused or working with non-compliant funders.
How Fundnode operates under HB 700
We're a referral platform, not a funder, so the disclosure obligations fall on our funding partners — not on us directly. But two things we do anyway:
- We surface APR-equivalent in pre-qualification. Long before any offer letter, you see what the financing actually costs annualized. Texas law doesn't require this of anyone; most other comparison platforms still hide it.
- We only route to compliant funders. If a funder isn't on track for OCCC registration in Texas, we don't send Texas leads to them. Same posture we take under Florida's and Georgia's disclosure regimes.
If you funded a deal before September 1, 2025
Existing contracts continue under their original terms. HB 700 applies to new financings going forward. If your existing funder is now subject to the new rules, you may see clearer renewal paperwork the next time you renew — but the original deal is grandfathered.
The bigger picture
Texas joining the disclosure states matters because Texas represents about 13% of US small-business MCA volume. Ten states — CA, NY, UT, VA, CT, FL, GA, KS, MO, and now TX — have enacted commercial-financing disclosure laws, so a large share of the US MCA market now operates under standardized cost-disclosure rules. But only California and New York mandate the APR-equivalent. Everywhere else, annualized-cost transparency is still on you — which is exactly the gap we exist to close.