What are the MCA state disclosure form formats by state and how do funders and ISOs comply in 2026?

Full answer

Disclosure overview 2026. State commercial financing disclosure laws emerged 2018-2024 to address MCA opacity. Laws require funders (and in some states brokers/ISOs) to provide standardized pre-funding disclosures to merchants similar to consumer credit Truth-in-Lending Act. Format and content vary by state, but common elements — APR or estimated APR, total dollar cost of financing, payment structure, prepayment terms, fees, and broker compensation. Compliance requires state-specific forms, calculation methodology, signature procedures, and recordkeeping.

California SB 1235 disclosure 2026. (a) Effective December 9, 2022 after lengthy regulatory rulemaking. (b) Applies to commercial financing $500K and under. (c) Disclosure format — 2-page standardized form. (d) Required elements — total amount of financing, disbursement amount, finance charge, APR, payment amounts, payment frequency, term, prepayment policy, collateral. (e) APR calculation methodology specified in regulations. (f) Disclosure timing — before consummation of contract. (g) Signature required from merchant. (h) DFPI enforces.

New York S5470 disclosure 2026. (a) Effective August 1, 2023 after multiple delays and regulatory revisions. (b) Applies to commercial financing $2.5M and under. (c) Disclosure format — standardized form per DFS regulations. (d) Required elements similar to CA — APR, total cost, payment structure, prepayment terms. (e) Different APR calculation methodology than CA (calculation method published in regulations). (f) Disclosure timing — before contract signing. (g) Signature required. (h) NYDFS enforces.

Virginia HB 1027 disclosure 2026. (a) Effective July 1, 2022. (b) Applies to commercial financing under $500K. (c) Broker disclosure focus — ISO/broker must disclose to merchant. (d) Required elements — broker compensation, broker relationship to funder, broker fees. (e) Less comprehensive than CA/NY disclosure. (f) Virginia State Corporation Commission enforces.

Utah SB 183 disclosure 2026. (a) Effective January 1, 2023. (b) Applies to commercial financing under $1M. (c) Registration requirement for funders + disclosure requirement. (d) Required elements — total cost, APR estimate, payment structure. (e) Utah Department of Financial Institutions enforces.

Georgia SB 90 disclosure 2026. (a) Effective January 1, 2024. (b) Applies to commercial financing under $500K. (c) Disclosure format similar to CA/NY. (d) Required elements — APR, total cost, payment structure, prepayment terms. (e) Georgia Department of Banking and Finance enforces.

Connecticut SB 1032 disclosure 2026. (a) Effective July 1, 2024. (b) Applies to commercial financing under $250K. (c) Disclosure format similar to NY S5470. (d) Required elements — APR, total cost, payment structure, prepayment terms, collateral. (e) Connecticut Department of Banking enforces.

Florida SB 1346 disclosure 2026. (a) Effective January 1, 2024. (b) Applies to commercial financing under $500K. (c) Disclosure-only law (no licensing requirement for funders not already licensed). (d) Required elements — total cost, payment structure, prepayment terms. (e) Less comprehensive APR requirement than CA/NY. (f) Florida Office of Financial Regulation enforces.

APR calculation methodologies 2026. (a) CA SB 1235 — standard installment APR methodology per DFPI regulations, treats variable-payment products with estimated APR. (b) NY S5470 — similar to CA but slightly different formulation per DFS regulations. (c) Both methodologies produce APR estimates that may differ from actual realized APR depending on payback speed. (d) Variable payment products (true revenue-based MCA) use estimated APR with assumptions stated. (e) Fixed payment products use precise APR.

Disclosure timing 2026. (a) CA — before consummation of contract. (b) NY — before contract signing. (c) VA — before contract signing. (d) UT — before contract signing. (e) GA — before contract signing. (f) CT — before contract signing. (g) FL — before contract signing. (h) All states require disclosure as pre-funding event, not post-funding. (i) Some states require time delay between disclosure and signing (CA 24 hour rule under consideration).

Signature requirements 2026. (a) CA — merchant signature acknowledging receipt and review. (b) NY — merchant signature with date and time of receipt. (c) VA — merchant signature acknowledging broker disclosure. (d) UT — merchant signature acknowledging receipt. (e) GA — merchant signature acknowledging receipt. (f) CT — merchant signature with date. (g) FL — merchant signature acknowledging receipt. (h) E-signature acceptable in all states under E-SIGN Act.

Recordkeeping requirements 2026. (a) CA — 5 year retention of disclosure forms. (b) NY — 5 year retention. (c) VA — 4 year retention. (d) UT — 4 year retention. (e) GA — 5 year retention. (f) CT — 4 year retention. (g) FL — 4 year retention. (h) Records must be available for state examination. (i) Electronic records acceptable.

Common disclosure elements across states 2026. (a) Funder name, address, contact. (b) Merchant name, address. (c) Total amount of financing. (d) Disbursement amount (after fees). (e) Finance charge (total cost minus disbursement). (f) APR or estimated APR. (g) Payment amount (or estimate for variable). (h) Payment frequency. (i) Term length (or estimate). (j) Prepayment policy. (k) Collateral description. (l) Broker compensation (where required).

Disclosure form sources 2026. (a) State regulator websites publish official forms. (b) Compliance counsel maintains current versions. (c) Industry associations (Innovative Lending Platform Association, SBFA) publish templates. (d) Funder-specific software (Loanity, Mantle, CashTax) generates compliant forms. (e) Forms updated periodically per regulatory amendments — funders must monitor.

Penalties for non-compliance 2026. (a) CA — civil penalties up to $10K per violation, license suspension or revocation. (b) NY — civil penalties up to $10K per violation, license action. (c) VA — civil penalties up to $2,500 per violation. (d) UT — civil penalties varying. (e) GA — civil penalties up to $1,000 per violation. (f) CT — civil penalties varying. (g) FL — civil penalties up to $5K per violation. (h) Repeat violations escalate.

Multi-state compliance 2026. (a) Funders operating in multiple states must comply with each state's disclosure law. (b) Disclosure forms vary by state — cannot use single form across states. (c) APR calculations vary by state — must implement state-specific calculation. (d) Compliance software generates state-specific forms based on merchant state. (e) Cross-state merchants (out-of-state funder, in-state merchant) use merchant state's disclosure law.

Bottom line. MCA state disclosure form formats in 2026 vary by jurisdiction — California SB 1235 (effective Dec 9 2022, financing $500K and under, DFPI enforced, 2-page standardized form with total/disbursement/finance charge/APR/payments/term/prepayment/collateral, 5-year retention), New York S5470 (effective Aug 1 2023, financing $2.5M and under, NYDFS enforced, similar format, different APR methodology, 5-year retention), Virginia HB 1027 (effective Jul 1 2022, financing under $500K, broker compensation focus, Virginia SCC enforced, 4-year retention), Utah SB 183 (effective Jan 1 2023, financing under $1M, registration + disclosure, Utah DFI enforced, 4-year retention), Georgia SB 90 (effective Jan 1 2024, financing under $500K, GA DBF enforced, 5-year retention), Connecticut SB 1032 (effective Jul 1 2024, financing under $250K, CT DOB enforced, 4-year retention), Florida SB 1346 (effective Jan 1 2024 disclosure-only no licensing, financing under $500K, FL OFR enforced, 4-year retention). Common elements — funder/merchant info, total financing, disbursement, finance charge, APR or estimated APR, payment amount/frequency, term, prepayment policy, collateral, broker compensation (where required). APR calculation methodologies differ by state per regulations — variable-payment products use estimated APR with assumptions. Disclosure timing pre-funding/pre-contract-signing in all states. Signature required from merchant (e-signature acceptable per E-SIGN). Penalties — CA/NY up to $10K per violation + license action, VA up to $2,500, GA up to $1,000, FL up to $5K, repeat escalates. Multi-state compliance requires state-specific forms (compliance software like Loanity, Mantle, CashTax generates), cross-state merchants use merchant state's law. Compliance counsel maintains current forms; industry associations (Innovative Lending Platform Association, SBFA) publish templates. Disclosure compliance is foundational ongoing obligation; funders must monitor regulatory amendments and update forms accordingly.

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