The headline
As of January 1, 2026, providers and brokers of sales-based financing (which includes most MCAs, revenue-based financing, and several adjacent products) operating in Texas must register with the state and provide standardized disclosures to every merchant they fund.
This puts Texas alongside California (CCFPL), New York (CFDL), Virginia (sales-based financing broker statute), and Utah (Commercial Financing Registration Act) as a major commercial-financing disclosure state. Florida and Georgia — where we currently operate — are watching closely; comparable rules are moving through both legislatures.
What changes for you as a merchant
Three concrete things:
- You'll see APR-equivalent quoted on every funding offer. Funders can no longer rely solely on factor rate as their pricing language. The APR-equivalent (often 50%+ for typical MCAs) must appear on the offer letter.
- Total cost of capital is broken out. Origination fee, ACH cost, any assessment fees, and the total dollar cost of the financing must be itemized.
- Prepayment economics are clarified. If the contract charges the full factor regardless of payoff speed, the offer letter must say so. If there's a prepayment discount, the schedule must appear.
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
- Your ability to negotiate — actually marginally improved, since rate transparency makes apples-to-apples comparisons easier
What to ignore in the noise
Two pieces of fear-mongering you might encounter:
- "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 rules kicked in on January 1, 2026. Anyone telling you to rush before they take effect is either confused or working with non-compliant funders.
How Fundnode operates under SB 1280
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. Most other comparison platforms still hide this.
- We only route to compliant funders. If a funder isn't registered in Texas, we don't send Texas leads to them. Same posture we'll take as Florida and Georgia phase in their own rules.
If you've already funded a deal before January 1, 2026
Existing contracts continue under their original terms. SB 1280 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. With CA, NY, VA, UT, and now TX all requiring standardized disclosure, more than half the US MCA market now operates under explicit APR-equivalent rules. That's the floor for where the rest of the country is heading — and a good thing for merchants either way.