What is the difference between a funder disclosure and a broker disclosure?

A funder disclosure (CA, NY, VA, UT, GA, CT, FL, NJ, MO) requires the entity providing capital to disclose APR-equivalent, total dollar cost, and other terms before contract execution. A broker disclosure adds requirements specific to the intermediary — broker commission, broker fee, broker identity, and any payments flowing between the broker and the funder. As of mid-2026, California, New York, Connecticut, and Virginia have the strongest broker-specific rules.

Are MCA brokers regulated by the federal government?

Not directly under a dedicated regime. The CFPB has Dodd-Frank Section 1071 small-business lending data collection authority that touches MCA brokers indirectly, and the FTC enforces consumer protection rules that apply to commercial financing marketing. Most substantive broker regulation happens at the state level.

Does the broker have to tell me their commission?

In California (DFPI rules under SB 1235 and SB 666), Virginia, and Connecticut — yes, if the broker is involved in originating a covered commercial financing transaction. In New York, brokers must register with DFS and disclose payment-from-funder relationships under specific circumstances. In most other states, broker commission disclosure is not required by law — but it is always reasonable to ask, and refusal is a signal.

What if my broker is licensed in one state but I am in another?

The law of the merchant's state typically governs the transaction for disclosure purposes. A broker licensed in California operating in Texas does not import California's disclosure requirements — but they may still be subject to California rules if they are soliciting California merchants. The interplay is complex; if you are in a regulated state, look up your state attorney general's commercial financing portal.

Are confession of judgment clauses still legal in MCA broker deals?

COJs are still legal in most states for commercial transactions. New York banned them in commercial contexts in 2019 if the merchant is located outside NY. New Jersey requires expanded disclosure. Maryland, Missouri, and Ohio still allow them with varying procedural protections. Always read for COJ language separately from the broker disclosure.

What should I do if a broker did not disclose what the law requires?

Document everything. Save the broker's emails, marketing materials, and any term sheets you received. File a complaint with your state attorney general's consumer protection division or your state's commercial financing regulator (DFPI in CA, DFS in NY). In some states, non-disclosure creates a private right of action that may allow you to rescind or recover damages.

MCA broker disclosure law state-by-state guide 2026 — what brokers must tell you, by state

The MCA broker disclosure landscape changed dramatically between 2023 and 2026. Here is the comprehensive state-by-state map of what your broker must legally tell you, what you can demand in writing, and where the regulatory teeth are sharpest.

The 60-second answer

As of mid-2026, nine states have enacted commercial financing disclosure laws that apply to MCA transactions: California, New York, Virginia, Utah, Georgia, Connecticut, New Jersey, Florida, and Missouri. Of those, four — California, New York, Connecticut, and Virginia — have broker-specific rules requiring intermediaries to disclose commission, identity, and payment-from-funder relationships. Several other states (Texas, Ohio, Maryland) have pending or partial legislation moving through.

For merchants, this means the legal floor of what you can demand from a broker varies enormously by your state. In California, you can demand full APR-equivalent, total dollar cost, broker commission, and itemized fees in writing before signing. In Tennessee or Alabama, you can demand the same — but only because asking is reasonable, not because the law requires it.

The strongest disclosure regimes (tier 1)

California — SB 1235 (effective 2022), SB 666 (broker fee cap, 2024)

California's Department of Financial Protection and Innovation (DFPI) administers the most comprehensive commercial financing disclosure regime in the country. Required disclosures for any MCA over $5,000 to a California-located merchant include:

Total amount of funding provided
Total dollar cost of financing
Term length
Average monthly cost
Annual percentage rate (APR-equivalent) using DFPI's prescribed methodology
Prepayment policy and any prepayment charge
Any broker fee, separately itemized

Under SB 666 (effective 2024), broker fees on commercial financing are capped at specified percentages of the transaction, and brokers must register with DFPI. Non-DFPI registered brokers cannot legally solicit California merchants.

New York — NYDFS 803 (effective 2024)

New York's Department of Financial Services adopted commercial financing disclosure rules under 23 NYCRR 600, requiring disclosures substantially similar to California's for transactions of $2.5 million or less. MCA brokers operating in New York must register with DFS. Disclosures include:

Disbursement amount, finance charge, total payback
Estimated APR using DFS-prescribed methodology
Payment schedule and amount
Prepayment terms
Collateral pledged (UCC-1)
Broker compensation disclosure when applicable

NY also retains its 2019 ban on confessions of judgment against non-NY merchants — a significant overlay that brokers should disclose when relevant.

Connecticut — Public Act 23-201

Connecticut's commercial financing law took full effect in 2024. The law requires comprehensive provider disclosure plus a specific broker disclosure clause requiring brokers to identify themselves, their fee, and any payments flowing between them and the provider. Brokers must register with the Connecticut Department of Banking.

Virginia — HB 1027

Virginia's commercial financing disclosure law took effect in 2022 and was tightened in 2024 to expand broker requirements. Brokers operating in Virginia must register and provide commission disclosure to merchants.

Mid-strength regimes (tier 2)

Utah

Utah's Commercial Financing Disclosure Act (2022, expanded 2024) requires provider disclosure but has less robust broker-specific rules than the tier-1 states.

Georgia — SB 90 (effective 2024)

Georgia requires APR-equivalent disclosure and broker registration for commercial financing of $500,000 or less. Broker fee disclosure is required.

New Jersey — SB 819

New Jersey's disclosure regime took effect in 2024 with provider disclosure requirements similar to Virginia. Broker disclosure rules apply but with narrower scope.

Missouri — SB 873

Missouri's law took effect in 2024 and includes both provider and broker disclosure requirements. COJ filings against Missouri merchants are still allowed, which makes the disclosure overlay especially important to read carefully.

Florida — SB 1170

Florida's commercial financing disclosure law took effect in 2024. The regime includes broker registration requirements administered by the Office of Financial Regulation.

Pending or partial (tier 3)

Ohio — SB 232 (pending)

Ohio has commercial financing disclosure legislation in active consideration. The current draft includes broker registration and disclosure requirements similar to Connecticut.

Texas — SB 1280 (effective 2024, partial)

Texas adopted a narrower commercial financing disclosure law that applies primarily to smaller transactions. Broker-specific rules are limited; provider disclosure is required for covered transactions but the threshold is higher than CA or NY.

Maryland, Illinois, Washington

These states have introduced commercial financing disclosure legislation in 2024 to 2026 sessions. None has fully enacted as of mid-2026. Status changes frequently — check your state legislature's commercial financing tracking site for current status.

States without commercial financing disclosure laws

The majority of US states have no MCA-specific disclosure regime. This includes Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, West Virginia, Wisconsin, and Wyoming.

In these states, brokers are not legally required to disclose commission, APR-equivalent, or fees. The merchant's only protection is contractual — what is written in the term sheet and signed agreement — plus federal consumer-protection laws that apply generically.

What every merchant should demand in writing

Regardless of state law, ask for these in writing before signing any MCA contract:

Total amount funded (net of all fees deducted from disbursement) — what actually lands in your bank account.
Total payback amount — the gross dollar amount you will repay.
Factor rate — the multiplier applied to the advanced amount.
Daily, weekly, or monthly payment — the actual ACH amount.
Estimated term length — how long you will be paying.
APR-equivalent — annualized cost of capital using a daily-balance methodology. If the broker refuses, ask why and walk if you do not get a straight answer.
Broker commission — how much the broker is being paid for placing the deal, either by you or by the funder.
Origination fees — itemized, by name and amount.
Prepayment policy — whether you can pay early and at what discount.
Reconciliation clause — what happens if revenue drops materially.
Confession of judgment — whether one is required, in which state, and what triggers filing.
Personal guarantee scope — full, performance, validity, or limited.
UCC-1 lien details — what is being pledged and to whom.
Default acceleration triggers — the specific events that allow the funder to demand full payback.

Red flags that suggest a non-compliant broker

"APR does not apply to MCAs." Technically true that MCAs are not loans, but every meaningful disclosure regime requires APR-equivalent calculation anyway. A broker who deploys this script in CA, NY, VA, CT, or other tier-1 states is operating outside the law.
Refusing to disclose their commission. Legal in some states, but a broker who refuses is almost always making more than market.
Pressure to sign within 24 hours. No legitimate funder needs same-day close. Pressure tactics signal a broker rushing you past disclosures.
Verbal-only term changes. Anything not in writing does not exist. Email everything.
Charging upfront "application" or "processing" fees.Most legitimate MCA brokers are paid by the funder via commission. Significant upfront fees are a red flag and may violate your state's law.
No state registration when required. If you are in CA, NY, CT, VA, FL, or GA, look up the broker on your state regulator's website. If they are not registered, that is a problem.

How to file a complaint

If you believe a broker violated your state's disclosure law:

California: File with DFPI at dfpi.ca.gov. The agency actively enforces SB 1235 and SB 666.
New York: File with DFS at dfs.ny.gov. NY also accepts complaints through the Attorney General's office.
Other tier-1 and tier-2 states: Most have a commercial financing complaint portal at the state attorney general's office or the state financial regulator. Search "[your state] commercial financing complaint."
No-disclosure-law states: File with the state attorney general's consumer protection division. While the substantive disclosure rules may not apply, generic deception and unfair-trade-practice laws often do.
Federal: The CFPB accepts complaints about small-business financing issues even though MCAs are not directly under its supervisory jurisdiction.

The bigger picture

The MCA broker disclosure landscape has tightened dramatically in the last 24 months — and the trend is firmly toward more state laws, not fewer. Every legislative session since 2022 has added at least one new state, and a federal framework (likely under CFPB 1071 expansion or a Treasury small-business framework) is increasingly likely by 2027.

For merchants, the practical takeaway: do not rely on state law to protect you, regardless of where you operate. Demand the disclosures in writing as a matter of standard practice. A broker who will not provide them is signaling something about the deal — usually that the terms would not survive scrutiny.

Frequently asked questions

What is the difference between a funder disclosure and a broker disclosure?: A funder disclosure (CA, NY, VA, UT, GA, CT, FL, NJ, MO) requires the entity providing capital to disclose APR-equivalent, total dollar cost, and other terms before contract execution. A broker disclosure adds requirements specific to the intermediary — broker commission, broker fee, broker identity, and any payments flowing between the broker and the funder. As of mid-2026, California, New York, Connecticut, and Virginia have the strongest broker-specific rules.
Are MCA brokers regulated by the federal government?: Not directly under a dedicated regime. The CFPB has Dodd-Frank Section 1071 small-business lending data collection authority that touches MCA brokers indirectly, and the FTC enforces consumer protection rules that apply to commercial financing marketing. Most substantive broker regulation happens at the state level.
Does the broker have to tell me their commission?: In California (DFPI rules under SB 1235 and SB 666), Virginia, and Connecticut — yes, if the broker is involved in originating a covered commercial financing transaction. In New York, brokers must register with DFS and disclose payment-from-funder relationships under specific circumstances. In most other states, broker commission disclosure is not required by law — but it is always reasonable to ask, and refusal is a signal.
What if my broker is licensed in one state but I am in another?: The law of the merchant's state typically governs the transaction for disclosure purposes. A broker licensed in California operating in Texas does not import California's disclosure requirements — but they may still be subject to California rules if they are soliciting California merchants. The interplay is complex; if you are in a regulated state, look up your state attorney general's commercial financing portal.
Are confession of judgment clauses still legal in MCA broker deals?: COJs are still legal in most states for commercial transactions. New York banned them in commercial contexts in 2019 if the merchant is located outside NY. New Jersey requires expanded disclosure. Maryland, Missouri, and Ohio still allow them with varying procedural protections. Always read for COJ language separately from the broker disclosure.
What should I do if a broker did not disclose what the law requires?: Document everything. Save the broker's emails, marketing materials, and any term sheets you received. File a complaint with your state attorney general's consumer protection division or your state's commercial financing regulator (DFPI in CA, DFS in NY). In some states, non-disclosure creates a private right of action that may allow you to rescind or recover damages.