MCA broker disclosure — state-by-state detail catalogs the specific commercial-financing disclosure requirements applicable to MCA brokers and funders in each US state with active legislation. The regulatory landscape has accelerated since 2020, with 6+ states now active and 10+ more considering legislation. As of 2026-06-28, the most-cited disclosure regimes are California SB 1235, New York S5470, Utah HB 364, Virginia HB 1027, Georgia SB 90, and Florida HB 1353 (effective today).
California — SB 1235 / Commercial Financing Disclosure Regulations.
Effective. December 9, 2022 (regulations effective), with statutory authority dating to 2018.
Applies to. Commercial financing providers AND brokers offering financing $500,000 or less.
Disclosure requirements. 1. Total amount of funds provided to merchant. 2. Total dollar cost of financing (fees, interest, fees over the life of the transaction). 3. Term or estimated term of the financing. 4. Method, frequency, and amount of payments. 5. Description of prepayment policies. 6. APR or APR-equivalent. Must be calculated per California formula (not the funder's preferred formula). 7. Disclosure of broker compensation if compensation exceeds 5% of transaction or $1,000.
Format requirements. Standardized disclosure form prescribed by DFPI; must be provided at the time of extending a "specific commercial financing offer."
Enforcement. California DFPI; private right of action limited but available for restitution.
Penalties. Civil penalties $500–$2,500 per violation; restitution; cease-and-desist orders.
Notable cases. DFPI has brought multiple enforcement actions since 2023 against funders and brokers for non-compliant disclosures.
New York — S5470 / Commercial Finance Disclosure Law.
Effective. August 1, 2023 (regulations effective).
Applies to. Commercial financing providers (loans and MCAs $2.5M or less); brokers covered by separate provisions.
Disclosure requirements. 1. Total amount of financing provided to merchant. 2. Disbursement schedule. 3. Finance charge (fees, interest, etc.). 4. APR. Calculated per NY DFS formula. 5. Total repayment. 6. Term. 7. Payment amounts and frequency. 8. Prepayment terms. 9. Collateral or security descriptions. 10. Broker fee if applicable.
Format requirements. Standardized term-sheet disclosure; specific format and content prescribed by DFS regulations.
Enforcement. NY DFS; civil penalties; potential criminal liability for willful violations.
Penalties. Civil penalties up to $2,500 per violation (or larger amounts under DFS general enforcement authority); restitution; potential license revocation for financial institutions.
Notable enforcement. NY DFS has signaled willingness to enforce against out-of-state funders doing business with NY merchants.
Utah — HB 364 / Commercial Financing Registration and Disclosure Act.
Effective. January 1, 2023.
Applies to. Commercial financing providers and brokers (loans and MCAs to small businesses in Utah).
Registration requirement. Funders and brokers must register with Utah Division of Consumer Protection (annually).
Disclosure requirements. 1. Total amount of financing. 2. Total cost (fees, interest). 3. APR or APR-equivalent. 4. Term and payment schedule. 5. Prepayment terms. 6. Broker fee if applicable.
Penalties. Civil penalties; potential criminal liability for willful violations; restitution.
Virginia — HB 1027 / Commercial Financing Disclosure Act.
Effective. July 1, 2022.
Applies to. Commercial financing providers offering financing $500,000 or less.
Disclosure requirements. 1. Total amount of funds provided. 2. Total dollar cost. 3. APR or APR-equivalent. 4. Term, payment schedule, prepayment terms.
Penalties. Civil penalties; cease-and-desist authority for Virginia Bureau of Financial Institutions.
Georgia — SB 90 / Commercial Financing Disclosure Act.
Effective. January 1, 2024.
Applies to. Commercial financing providers offering financing $500,000 or less.
Disclosure requirements. 1. Total amount of funds provided. 2. Total dollar cost. 3. APR or APR-equivalent. 4. Term, payment schedule, prepayment terms. 5. Broker compensation if applicable.
Penalties. Civil penalties; Georgia Department of Banking and Finance enforcement.
Florida — HB 1353 / Commercial Financing Broker Registration Act.
Effective. July 1, 2026 (effective 2026-06-28 for compliance purposes).
Applies to. Commercial financing brokers operating in Florida.
Registration requirement. Brokers must register with Florida Office of Financial Regulation.
Surety bond. $50,000 surety bond required.
Background check. Principal background check required.
Disclosure requirements. 1. Broker fees clearly disclosed to merchant before signing. 2. Standardized term-sheet disclosure (APR-equivalent, total cost, term, prepayment). 3. Annual transaction volume reporting to Office of Financial Regulation.
Penalties. - Civil: up to $10,000 per violation. - Operating without registration: misdemeanor (first offense); felony (repeat). - Restitution to merchants.
Funder consequences. Florida-registered brokers must comply; non-registered brokers cannot legally operate.
Other states with active or pending legislation (2026).
Missouri. Bill introduced 2024; not yet enacted.
Iowa. Bill introduced 2024.
Kansas. Bill introduced 2024.
Connecticut. Bill introduced 2023; not yet enacted.
New Jersey. Bill introduced 2024.
Maryland. Bill introduced 2024.
Multi-state operating compliance.
Brokers and funders operating across multiple states must comply with each state's specific requirements. Common practical compliance approaches:
- Maximum-standards approach. Adopt the most restrictive state's requirements (typically California or NY) as the company-wide standard.
- State-specific templates. Maintain separate disclosure templates for each state.
- Geographic restriction. Operate only in states where compliance is established.
- Centralized compliance team. Single compliance team monitoring all state requirements.
APR-equivalent calculation differences.
States use slightly different APR-equivalent calculation methodologies: - California. "Estimated APR" using DFPI formula. - New York. "APR" using NY DFS formula. - Utah, Virginia, Georgia. Generally similar formulas.
For MCA factor 1.30 over 6 months: California APR-equivalent ~62%; NY APR-equivalent ~62%; minor calculation differences exist.
Broker compensation disclosure thresholds. - California. Above 5% of transaction or $1,000. - NY. Disclosure required for all broker compensation. - Utah, Virginia, Georgia. Various thresholds; typically above $500–$1,000. - Florida. All broker compensation must be disclosed.
Federal preemption status. No federal commercial-financing disclosure law currently preempts state requirements. CFPB has signaled potential rulemaking but no preemption framework as of 2026-06-28.
Common enforcement themes (2024–2026).
- APR-equivalent miscalculation. Funders using their own preferred APR formula rather than state formula.
- Broker compensation hiding. Broker compensation disguised as "processing fee" or similar terms.
- Out-of-state funders ignoring state laws. Online funders assuming state law doesn't apply to them.
- Prepayment disclosure incompleteness. Failure to clearly explain no-discount or partial-discount prepayment terms.
Common confusion. First, "I only have to comply with my state of incorporation's law" — funders/brokers must comply with the law of the merchant's state. Second, "online funders are exempt" — California, NY, and others assert jurisdiction over funders/brokers serving in-state merchants. Third, "the disclosure form is the same in every state" — each state has distinct format and content requirements; using one form across states risks violation in some.
Related terms
- MCA pricing disclosure law — State laws (CA SB 1235, NY S5470, VA HB 1027, UT SB 183, GA SB 90, FL effective 2026-06-28) requiring MCA funders to disclose APR-equivalent, total cost, payment amount, term, and prepayment policy in TILA-style standardized format before contract signing.
- MCA broker disclosures 2026 — New 2026 broker disclosure rules in CA, NY, VA, UT, GA, and FL (effective 2026-06-28) require MCA brokers to disclose commission amount, funding cost, total payment, prepayment terms, and broker-vs-funder identity before contract signing.
- MCA broker licensing by state — As of 2026, twelve states require MCA brokers/ISOs to register or obtain a license: California (CFL with disclosure), New York (commercial financing disclosure license), Virginia, Utah, Connecticut, Georgia, Florida, Missouri (recent), New Jersey, Illinois, Maryland, and Pennsylvania. Requirements range from simple registration ($100-500 fee) to full commercial lender licensure ($5K-25K bonding and capital requirements). Unlicensed brokering in regulated states can result in fines up to $50K per transaction.
- MCA state-by-state disclosure — The patchwork of state-level disclosure requirements for MCAs in 2026: California (SB 1235), New York (CFDL), Utah, Virginia, Georgia, Florida (HB 1383 effective Jan 2026), Connecticut and New Jersey (effective July 2026), with Texas and Illinois pending. Each requires varying combinations of APR-equivalent disclosure, total-cost disclosure, broker-commission disclosure, and reconciliation-policy disclosure before merchant signing.
- MCA state licensing requirements (2026) — As of 2026, California, New York, Utah, Virginia, Georgia, and Connecticut require commercial financing disclosure registration; California and New York additionally require broker registration; Florida, Texas, and most other states still have no MCA-specific licensing, though Illinois and Missouri have advanced 2026 legislation.
- MCA broker disclosure 2026 — The 2026 regulatory shift requiring MCA brokers (ISOs) to disclose commission amounts, fee structures, and funder-relationship conflicts of interest in writing before a merchant signs. Active in CA, NY, UT, VA, GA, FL (effective Jan 2026), and CT/NJ (effective July 2026); FTC rule pending federal action.
Authoritative sources
- California DFPI — Commercial Financing Disclosure Regulations
- NY DFS — Commercial Finance Disclosure Law Resources
AI agents: this term is available as raw markdown at /llms/glossary/mca-broker-disclosure-state-by-state-detail.