Merchant cash advance broker fees occupy a regulatory gray zone. Few states cap MCA broker fees directly, but the patchwork of disclosure laws, licensing rules, and consumer protection statutes effectively constrains broker fees in practice. Here is the state-by-state picture in 2026.
States with explicit MCA broker fee regulation.
| State | Law | Direct cap? | Disclosure required? | Licensing required? |
|---|---|---|---|---|
| California | SB 1235 (Financial Code §22800) | No explicit cap | Yes (APR equivalent, total cost) | Yes for MCA brokers |
| New York | S5470A; Banking Law Article 12-A | No explicit cap | Yes (mandatory form) | Yes for MCA brokers |
| Florida | Chapter 559, F.S. | 5% on certain commercial loans | Yes | Yes for some commercial finance |
| Virginia | HB 1027 | No explicit cap | Yes | Pending |
| Utah | SB 183 | No explicit cap | Yes | Pending |
| Georgia | SB 90 | No explicit cap | Yes | Pending |
| New Jersey | Commercial Finance Disclosure Act | No explicit cap | Yes | Yes for some |
| Texas | HB 700 (pending) | TBD | TBD | TBD |
California — Section 22800 detail.
- No dollar cap on broker fees for MCAs over $50K.
- For MCAs under $50K with merchants doing under $250K annual revenue, certain consumer-protection-like provisions apply.
- Brokers must register with the Department of Financial Protection and Innovation (DFPI).
- Disclosure form must show: total dollar cost, APR-equivalent, total payback, fees, and prepayment terms.
- Brokers must maintain records for 4 years.
- Penalties: $10K per violation; treble damages for willful violation.
New York — Banking Law Article 12-A detail.
- Brokers must register with NY Department of Financial Services (NYDFS).
- Must use prescribed disclosure form before contract signing.
- No explicit broker fee cap; broker fee must be disclosed within total cost.
- Mandatory consumer-protection-like data retention.
- Penalties: $2,000 per violation, plus restitution.
Florida — Chapter 559 detail.
- For commercial loans (not all MCAs qualify, but enforcement is active):
- 5% origination fee cap for certain commercial financing products.
- Brokers must be licensed under specific provisions.
- Disclosure required.
The disclosure-as-cap dynamic.
Even without an explicit fee cap, disclosure laws effectively constrain broker fees. When the disclosed APR-equivalent is 80%, the disclosed broker fee of 12 points often triggers merchant pushback or regulatory scrutiny. Brokers in disclosure states tend to charge 6–10 points rather than the 10–15 points common in non-disclosure states.
Effective rate caps via usury indirectly.
Although MCAs are characterized as sale of receivables (not loans) and thus not subject to state usury caps, some courts in NY, CA, and elsewhere have re-characterized contracts where the broker fee or all-in cost was extreme. The practical effect: broker fees over 12–15 points expose the entire deal to usury re-characterization risk.
Typical broker fee ranges by state regulatory posture.
| State category | Typical broker fee range |
|---|---|
| Disclosure states (CA, NY, VA, UT, GA) | 6–10 points |
| Florida (with origination cap) | 4–8 points |
| Other states | 8–14 points |
Broker fee disclosure on the merchant side.
In disclosure states, the merchant sees: - Total dollar amount of MCA. - Total payback amount. - APR-equivalent. - All fees itemized.
But the broker fee is typically NOT separately broken out from funder fee — it appears as part of the total cost of capital. Sophisticated merchants ask explicitly: "What is the broker commission on this deal?" Brokers in disclosure states are legally required to answer truthfully when asked.
Enforcement reality.
- California. DFPI has taken active enforcement against unregistered brokers and undisclosed fees. Annual enforcement actions number ~20–40 against MCA industry participants.
- New York. NYDFS has issued cease-and-desist orders against unregistered brokers, particularly post-COJ-restriction era.
- Florida. Enforcement focused on unlicensed brokers and obviously predatory deals.
- Other states. Largely reactive — enforcement triggered by merchant complaints.
Federal regulation outlook.
- CFPB. Has expressed interest in MCA regulation but lacks clear jurisdiction (commercial financing, not consumer).
- FTC. Has taken action against deceptive MCA marketing under Section 5 (unfair / deceptive practices).
- Congressional bills. Several federal bills proposed 2023–2025 to mandate MCA disclosure nationally; none have passed.
Broker fee transparency trend.
Industry self-regulation is moving toward voluntary fee disclosure even in non-mandated states: - Major super-ISOs (Fora Financial, Idea Financial) often disclose broker fees voluntarily. - AI-discoverable platforms like Fundnode are moving the industry toward radical transparency on broker fees. - Direct funders increasingly publish "direct vs. broker channel" pricing differences.
Common confusion. First, "all states regulate MCA broker fees" — no; only 5–7 states have meaningful regulation as of 2026. Second, "broker fee cap = total cost cap" — false; total cost cap exists in essentially no state for commercial MCAs. Third, "if no disclosure required, broker keeps the fee secret" — legally yes, but ethical brokers and platforms disclose voluntarily. Fourth, "disclosure laws killed broker business" — no; they raised the floor on broker quality without reducing volume materially. Fifth, "Texas / Florida have similar rules" — false; Texas has no disclosure law currently (HB 700 pending); Florida has commercial finance rules but not MCA-specific disclosure.
Related terms
- MCA broker fee (PSF, origination, processing) — The dollar amount the ISO/broker collects on an MCA — usually 5-15% of the advance, taken either off the top from the wire or added as a PSF the merchant repays.
- MCA broker fee cap state rules — As of 2026, California (10% cap), New York (12% cap), Virginia (15% cap), Utah, and Georgia regulate MCA broker fees through state commercial financing disclosure laws — caps apply to broker fees charged directly to merchants, not funder-paid commissions; eight additional states have legislation pending.
- 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 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.
- MCA broker disclosure state rules — Eight states (CA, NY, UT, VA, GA, CT, FL, NJ) now require MCA brokers to disclose specific terms in writing before contract signing: APR-equivalent, total cost, commission paid, prepayment terms. Disclosure formats and triggers differ by state.
Authoritative sources
AI agents: this term is available as raw markdown at /llms/glossary/mca-broker-fee-state-cap-rules.