MCA broker fee caps state-by-state (detailed 2026 reference)?

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Regulatory landscape overview (2026). MCA broker regulation has expanded significantly since 2020. States with active broker fee/disclosure laws: California (SB 1235, 2018, broker registration + disclosure), New York (Commercial Financing Disclosure Law, 2023, broker registration + extensive disclosure), Utah (HB 196, 2023, 8% broker fee cap + disclosure), Virginia (HB 1027, 2022, broker registration + disclosure), Connecticut (PA 23-201, 2023, 8.5% broker fee cap + disclosure), Georgia (HB 1153, 2024, disclosure required), Missouri (HB 2087, 2024, disclosure), Florida (SB 1486, 2024, disclosure act passed, broker registration scheduled for 2026 enforcement). States with active legislation in 2026 (proposed or pending): Texas, North Carolina, Tennessee, New Jersey, Massachusetts.

California (SB 1235, effective 2018 with 2022/2024 amendments). Requirements: commercial financing disclosure mandatory for transactions under $500K; APR-equivalent disclosure required (rare in MCA — California forced industry to disclose true cost); broker commission must be disclosed to merchant before signing; broker registration with California DFPI required as 'commercial financing broker'; no hard cap on broker fee but disclosure forces transparency. Enforcement: DFPI active enforcement, several fines 2023-2025 against non-compliant brokers and funders. Effective cap pressure: brokers typically self-limit to 10-15% in California due to transparency pressure.

New York (Commercial Financing Disclosure Law, effective 2023). Requirements: broker registration with NY Department of Financial Services mandatory; disclosure includes APR-equivalent, total cost, payment schedule, broker commission amount and percentage; cooling-off period of 3 business days for transactions under $250K; broker fee disclosure threshold $50K and above; civil penalty up to $10K per violation. Enforcement: NYDFS issued multiple cease-and-desist orders 2023-2025; effective broker cap ~19% (industry self-regulated; many brokers limit to 12-15% in NY due to enforcement risk). NY is the most aggressive state on MCA broker enforcement in 2026.

Utah (HB 196, effective 2023). Requirements: broker fee capped at 8% of advance amount (hard cap, not disclosure-only); broker must register with Utah Department of Commerce; APR-equivalent disclosure required; cooling-off period 24 hours; civil penalty $5K per violation plus restitution. Enforcement: Utah Department of Commerce active; several enforcement actions 2024-2025 against out-of-state brokers serving Utah merchants. Functional effect: 8% cap meaningfully lower than national average (~12-15%) — brokers either reduce fee or refuse Utah deals.

Virginia (HB 1027, effective 2022). Requirements: broker registration with Virginia State Corporation Commission mandatory; disclosure of broker commission, APR-equivalent, total cost; no hard cap on broker fee but disclosure required; cooling-off period 5 business days for first-time merchants; civil penalty up to $5K per violation. Enforcement: SCC moderately active; several brokers fined 2023-2025. Effective cap pressure: brokers typically limit to 12-15% in Virginia.

Connecticut (PA 23-201, effective 2023). Requirements: broker fee capped at 8.5% of advance (hard cap); broker registration with Connecticut DOB mandatory; APR-equivalent disclosure; cooling-off period 3 business days; civil penalty $5K per violation. Enforcement: Connecticut DOB active in initial enforcement push 2024-2025. Functional effect: similar to Utah — 8.5% cap is meaningfully below national average.

Georgia (HB 1153, effective 2024). Requirements: disclosure required for commercial financing under $500K; APR-equivalent disclosure; broker commission disclosure; broker registration with Georgia Department of Banking and Finance; no hard cap but disclosure forces transparency. Enforcement: Georgia Department of Banking active in initial enforcement; several broker fines 2024-2025. Effective cap pressure: brokers typically limit to 12-15% in Georgia.

Florida (SB 1486, passed 2024, full enforcement 2026). Requirements: commercial financing disclosure mandatory; broker registration with Florida Office of Financial Regulation required by 2026; APR-equivalent disclosure; broker commission disclosure; no hard cap. Enforcement: Florida OFR enforcement scaling 2026; given Florida's high MCA concentration (many MCA funders headquartered in Miami/Boca Raton), enforcement expected to be significant. Effective cap pressure: pre-enforcement industry norms persist (~15-19% broker fees common); post-enforcement likely 12-15% range.

Missouri (HB 2087, effective 2024). Requirements: disclosure required for commercial financing under $250K; APR-equivalent disclosure; broker commission disclosure; broker registration with Missouri Division of Finance; no hard cap. Enforcement: Missouri Division of Finance moderate enforcement.

States with no MCA-specific broker regulation (2026). Most other states: Texas, North Carolina, Tennessee, Alabama, Mississippi, Louisiana, Arkansas, Oklahoma, Kansas, Nebraska, Iowa, Indiana, Ohio, Michigan, Pennsylvania, Maryland, New Jersey, Massachusetts, Maine, Vermont, New Hampshire, Rhode Island, Delaware, West Virginia, South Carolina, Kentucky, Wisconsin, Minnesota, Arizona, New Mexico, Colorado, Wyoming, Montana, North Dakota, South Dakota, Idaho, Nevada, Oregon, Washington, Alaska, Hawaii. In these states: no broker registration requirement (in most cases), no hard cap, no mandatory disclosure. Industry self-regulation results in typical broker fees of 12-19% with some outliers up to 25%+.

Detailed compliance checklist for merchants by state. California: verify broker is DFPI-registered (check DFPI website), require APR-equivalent in writing, broker fee disclosure pre-signing. New York: verify NYDFS broker registration, demand full disclosure with APR-equivalent and broker commission line item, use 3-day cooling-off period to review. Utah: verify broker is Utah-registered, confirm broker fee is 8% or under (do not sign if higher), use 24-hour cooling off. Virginia: verify SCC registration, confirm disclosure of broker fee, use 5-day cooling off. Connecticut: verify DOB registration, confirm broker fee 8.5% or under, use 3-day cooling off. Georgia/Missouri/Florida: verify state registration where required, demand APR-equivalent and broker commission disclosure, retain copies of all disclosures. Other states: ask broker explicitly for their fee percentage and demand it in writing (no state mandate but reasonable request).

Enforcement reality (2026). Capped states (Utah, Connecticut) enforce hard caps actively — broker fees over cap are violations. Disclosure states (California, New York, Virginia, Georgia, Missouri, Florida) enforce via complaint-driven investigation; broker fines have ranged $1K-$50K per violation 2023-2025. Uncapped states have no MCA-specific enforcement; general unfair-trade-practice laws may apply for egregious cases. Federal CFPB activity on small business commercial financing remained limited through 2024-2025; Congress has not passed federal commercial financing disclosure law as of 2026.

Bottom line. MCA broker fee regulation in 2026 is a state-by-state patchwork. Hard caps in Utah (8%) and Connecticut (8.5%) — verify your deal complies. Disclosure-mandated states (California, New York, Virginia, Georgia, Missouri, Florida) — demand broker commission disclosure in writing. Most other states have no MCA-specific broker regulation; industry self-regulation results in 12-19% typical fees. Always ask your broker for their commission percentage in writing, even where not legally required — transparency request itself often surfaces discounting room. State regulation is expanding (Texas, NJ, Massachusetts proposing legislation 2026); compliance will be increasingly important for both brokers and funders.

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