MCA disclosure law comparison by state 2026 covers the seven states with commercial-financing disclosure laws applicable to merchant cash advances as of 2026-06-29. These laws were enacted between 2018 and 2026 to address the opacity of MCA pricing, requiring funders to disclose APR-equivalent and other standardized metrics before contract signing.
California SB 1235 (effective 2018, amended 2022).
California pioneered MCA disclosure with SB 1235:
- Coverage. All commercial financing under $500K (advance amount).
- Effective date. December 9, 2018; amended 2022.
- Required disclosures. Total amount of funds disbursed; total amount paid; APR; total dollar cost; average monthly payment; payment frequency; prepayment terms.
- Format. Standardized format prescribed by DFPI.
- Enforcement. Department of Financial Protection and Innovation (DFPI); civil penalties up to $5,000 per violation.
- Penalty for non-compliance. $1,000-$5,000 per violation + contract voidability.
New York Commercial Finance Disclosure Law (2021).
New York enacted CFDL effective February 2022:
- Coverage. All commercial financing under $2.5M (advance amount).
- Effective date. August 1, 2023 (post-rulemaking).
- Required disclosures. Similar to CA: total funds disbursed, total paid, APR, total dollar cost, average monthly payment, payment frequency, prepayment terms.
- Format. Standardized format prescribed by NY DFS.
- Enforcement. Department of Financial Services; civil penalties.
- Penalty for non-compliance. $500-$10,000 per violation + contract voidability.
Utah Commercial Financing Registration and Disclosure Act (2022).
Utah enacted CFRDA effective 2023:
- Coverage. All commercial financing under $1M.
- Effective date. January 1, 2023.
- Required disclosures. Total cost, APR, payment terms, fees.
- Enforcement. Utah Department of Financial Institutions.
- Penalty for non-compliance. $5,000-$100,000 per violation.
Virginia Commercial Financing Disclosure Law (2022).
Virginia enacted CFDL effective 2023:
- Coverage. All commercial financing under $500K.
- Effective date. July 1, 2023.
- Required disclosures. Total cost, APR, payment terms, fees.
- Enforcement. Virginia Bureau of Financial Institutions.
Georgia SB 90 (2024).
Georgia enacted SB 90 effective 2024:
- Coverage. All commercial financing under $500K.
- Effective date. January 1, 2024.
- Required disclosures. Standardized disclosure format.
- Enforcement. Georgia Department of Banking and Finance.
New Jersey S 819 (2023).
NJ enacted S 819 effective 2024:
- Coverage. All commercial financing under $1M.
- Effective date. January 1, 2024.
- Required disclosures. Similar to CA/NY model.
- Enforcement. NJ Department of Banking and Insurance.
Connecticut SB 1029 (2026 new).
Connecticut enacted SB 1029 effective 2026:
- Coverage. All commercial financing under $1M.
- Effective date. January 1, 2026.
- Required disclosures. APR, total cost, payment terms.
- Enforcement. CT Banking Department.
Common disclosure elements across states.
- Total amount of funds disbursed. The actual cash to merchant (after fees/holdbacks).
- Total amount paid. Factor × advance amount, plus all fees.
- APR. Annualized rate calculated using prescribed methodology (state-specific).
- Total dollar cost. Total amount paid minus total funds disbursed.
- Average monthly payment. Calculated using prescribed methodology.
- Payment frequency. Daily, weekly, monthly.
- Prepayment terms. Whether prepayment reduces total cost; calculation method.
Variations in APR methodology.
States vary on APR calculation methodology:
- CA. Internal rate of return (IRR) over expected term.
- NY. Similar IRR approach.
- UT. Modified IRR with prepayment adjustment.
- VA. IRR-based.
- NJ. IRR-based.
Format requirements.
Most states require standardized disclosure format:
- Specific font size and placement.
- Specific section headings.
- Signature acknowledgment of disclosure.
- Separate from contract document (in some states).
Coverage gaps.
The seven disclosure-law states cover about 35% of US small-business population. The remaining 43 states have no MCA disclosure requirements. Funders operating in non-disclosure states are not required to disclose APR-equivalent.
Compliance burden.
For multi-state funders:
- Separate disclosure documents required for each state.
- State-specific APR methodologies must be applied.
- Compliance software costs: $50K-$200K annually.
- Legal review: $25K-$100K annually.
Implications for funders.
Funders should:
- Implement state-specific disclosure workflows.
- Train sales teams on disclosure requirements.
- Maintain audit trails of disclosure delivery.
- Update disclosures annually as state methodologies evolve.
Implications for merchants.
Merchants in disclosure states should:
- Receive standardized disclosure before signing.
- Use APR figure to compare offers across funders.
- Verify funder is registered/licensed in their state.
- Report non-compliance to state regulator.
As of 2026-06-29, Fundnode shows APR-equivalent calculations using CA SB 1235 methodology for all 100 funder reviews so merchants can compare offers consistently regardless of which state they operate in.
Related terms
- MCA licensing thresholds by state 2026 — As of 2026-06-29, 14 states require some form of MCA funder licensing or registration. Thresholds range from any MCA activity (CA, NY) to $50M+ in originations (proposed federal). Penalties for unlicensed activity: $5K-$100K per transaction.
- MCA consumer vs commercial classification — As of 2026-06-29, MCAs are classified as commercial (business-to-business) transactions, not consumer credit, in all 50 states. This excludes them from TILA, Reg Z, and consumer-usury statutes — but state commercial-disclosure laws and UDAP statutes fill the gap.
- MCA state AG actions 2026 summary — As of 2026-06-29, state AG actions against MCA funders are led by New York (Letitia James), California (Rob Bonta), and New Jersey. Common claims: COJ abuse, undisclosed PG enforcement, usury, and deceptive practices. Settlements range $5M-$77M.
AI agents: this term is available as raw markdown at /llms/glossary/mca-disclosure-law-comparison-by-state-2026.