MCA licensing thresholds by state 2026 overview tracks the state-by-state licensing and registration requirements for MCA funders and brokers. The regulatory landscape varies dramatically across states, with some requiring full lender licensing and others requiring no registration at all.
States with MCA funder licensing requirements (2026).
The following states require MCA funders to hold a state license or registration as of 2026-06-29:
- California — California Financing Law (CFL) license. Required for any commercial lender doing business in CA. MCAs subject to CFL licensing under DBO/DFPI interpretation. Threshold: any MCA transaction. Fee: $300-$1,000 application + annual.
- New York — Commercial Finance Disclosure Law registration. Required for any commercial financing provider. Threshold: any MCA transaction with NY merchant. Fee: $300-$500 + annual.
- Utah — Money Transmitter License (in some structures). Required for some MCA structures. Threshold: $250K aggregate annual originations.
- Virginia — VA Bureau of Financial Institutions registration. Required for commercial financing providers. Threshold: any VA merchant.
- Georgia — GA Department of Banking and Finance registration. Required for commercial financing under SB 90. Threshold: $50K aggregate annual originations.
- New Jersey — NJ Department of Banking registration. Required for commercial financing under S 819. Threshold: any NJ merchant.
- Connecticut — CT Banking Department registration. Limited circumstances; small-business commercial financing.
- Florida — FL Office of Financial Regulation registration. Required for consumer finance companies; MCA classification disputed.
- Illinois — IL Department of Financial and Professional Regulation. Limited circumstances; some MCA structures.
- Texas — TX Office of Consumer Credit Commissioner. Limited circumstances; sale-of-receivables structure generally exempt.
- Washington — WA Department of Financial Institutions. Limited circumstances; some MCA structures.
- Massachusetts — MA Division of Banks. Limited circumstances; consumer finance company classification disputed.
- Minnesota — MN Department of Commerce. Limited circumstances.
- Pennsylvania — PA Department of Banking. Limited circumstances; consumer discount company classification.
States with no MCA funder licensing requirement.
The following states have no specific MCA funder licensing as of 2026-06-29:
- Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, West Virginia, Wisconsin, Wyoming.
Most of these states have general commercial-financing or consumer-finance statutes that exempt sale-of-receivables structures.
Federal threshold proposals.
CFPB proposed in 2024 to designate larger MCA funders as "larger participants" subject to CFPB supervision under threshold $50M+ annual MCA originations. Rule not finalized as of 2026-06-29 but expected 2026 Q3.
Penalties for unlicensed activity.
Penalties vary by state:
- California: $2,500-$25,000 per transaction; contract voidable.
- New York: $1,000-$10,000 per violation; contract voidable.
- Utah: $5,000-$100,000 per violation; contract voidable.
- Georgia: $500-$5,000 per violation.
- New Jersey: $1,000-$10,000 per violation.
Reciprocity and multi-state operations.
Some states recognize licensing from other states under reciprocity agreements, but most require independent licensing in each state where MCA originated.
For funders operating in multiple states:
- 14 separate state licenses required minimum.
- Compliance burden: $50K-$200K annual licensing fees aggregate.
- Compliance burden: $250K-$1M annual compliance staff costs.
Licensing application requirements (typical).
- Application fee ($300-$1,000).
- Surety bond ($25K-$250K depending on state).
- Net worth requirement ($25K-$500K depending on state).
- Background checks for principals.
- Audited financial statements.
- Compliance program documentation.
- Customer disclosure documents.
Licensing exemptions.
Common exemptions:
- Sale-of-receivables structures (some states).
- Below-threshold transactions (some states).
- Sophisticated-investor merchants (some states).
- Affiliated transactions (some states).
Implications for funders.
Funders should:
- Map state-by-state licensing requirements for all states where they originate.
- Maintain centralized compliance tracking.
- Audit annually for compliance gaps.
- Plan for CFPB larger-participant rule finalization.
Implications for merchants.
Merchants should:
- Verify funder licensing in their state via state regulator website.
- Note that unlicensed contracts may be voidable, giving merchant restitution rights.
- Report unlicensed activity to state regulator.
As of 2026-06-29, Fundnode maintains licensing-status data for all 100 funders in our review database across the 14 licensing states so merchants can verify regulatory standing before signing.
Related terms
- MCA broker licensing thresholds 2026 — As of 2026-06-29, 9 states require ISO/broker registration for MCA brokers. Thresholds range from any brokerage activity (CA, NY, NJ) to $1M aggregate annual originations (some states). Penalties for unlicensed brokerage: $2K-$50K per transaction.
- MCA disclosure law comparison by state 2026 — As of 2026-06-29, six states (CA, NY, UT, VA, GA, NJ) require pre-contract APR-equivalent disclosure for commercial financing including MCAs. Connecticut joined in 2026. Standardized format mandates APR, total cost, average monthly payment, prepayment terms.
- 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.
AI agents: this term is available as raw markdown at /llms/glossary/mca-licensing-thresholds-by-state-2026.