MCA broker fee state cap rules — the detailed 2026 map of what brokers can charge, what must be disclosed, and where the laws have real teeth.

The 60-second answer

Merchant cash advance broker fees are not federally capped. They are increasingly constrained by a state-by-state patchwork: disclosure regimes that force itemization of broker commission and APR-equivalent, licensing regimes that require brokers to register, post bond, and pass background checks, and a small number of explicit fee caps (Georgia is the clearest example) that limit absolute broker take.

The practical effect in 2026: a merchant in California, New York, Virginia, Utah, or Georgia has more legal protection and visibility into broker fees than a merchant in Tennessee, Alabama, or Wyoming. The disclosure laws have given regulators (and merchants) the tooling to actually contest defective broker fees, and we've seen state AG actions and DFS enforcement settle on broker markups that were illegal under state law.

Why broker fees became a regulatory issue in the first place

A merchant cash advance is legally structured as the sale of future receivables, not a loan. That legal framing has historically exempted MCA from the federal lending statutes (Truth in Lending Act, Equal Credit Opportunity Act) that apply to consumer credit and most term lending. The result through the mid-2010s was a market in which ISOs and brokers could charge essentially whatever they could extract from the merchant, with no itemized disclosure of the markup hidden inside the factor rate.

The pattern that emerged: a funder would quote a 1.28 factor to the broker. The broker would re-quote 1.36 to the merchant. The 0.08 spread on a $100,000 deal was an extra $8,000 of pure margin to the broker — itemized nowhere on the contract, never disclosed, and structurally invisible to the merchant. After thousands of these deals soured into confessions of judgment in 2018–2020, state legislatures started moving.

The state-by-state 2026 map

California (CA) — SB 1235 + Commercial Financing Disclosure Law

• Disclosure regime. Funders and brokers must disclose: amount financed, APR (using DBO's prescribed calculation method), finance charge, payment frequency and amount, prepayment terms.
• Broker markup disclosure. Any broker-added markup over the funder's quoted price must be itemized.
• Licensing. Brokers operating above defined thresholds need a California Finance Lender (CFL) license. Department of Financial Protection and Innovation (DFPI) is the regulator.
• Enforcement. Active. DFPI has taken enforcement action on undisclosed markups. The most-developed state regulator on MCA broker conduct.

New York (NY) — Commercial Finance Disclosure Law + DFS 803

• Disclosure regime. Standardized commercial-financing disclosure form required at funding, including APR-equivalent.
• Licensing. Department of Financial Services licenses both funders and commercial financing brokers above defined volume.
• Confession of judgment ban. COJs against out-of-state merchants banned since 2019, which materially changes broker behavior on NY deals.
• Enforcement. NY DFS has been aggressive. Multiple high-profile enforcement actions and license revocations of MCA shops since 2022.

Virginia (VA) — HB 1027

• Disclosure regime. Requires APR disclosure, fee itemization, and broker commission disclosure on all commercial financing under $500,000 to Virginia businesses.
• Broker registration. Commercial financing brokers must register with the Virginia State Corporation Commission's Bureau of Financial Institutions.
• Enforcement. Newer (effective 2023), enforcement still ramping. Bureau has issued guidance but limited enforcement actions to date.

Utah (UT) — HB 456

• Disclosure regime. Annual percentage rate, finance charge, broker compensation if applicable, all required at point of offer.
• Broker registration. Commercial financing brokers must register with the Department of Financial Institutions.
• Notable feature. Utah's law applies even to non-resident funders offering financing to Utah merchants — extraterritorial reach.

Georgia (GA) — Commercial Financing Broker Act

• Explicit fee cap. Georgia is unusual: caps broker commission at 7% of the amount funded for certain MCA structures, with registration and bonding required.
• Registration. All commercial financing brokers in Georgia must register, post a surety bond, and pass a background check.
• Enforcement. Active. Georgia Secretary of State's office has revoked registrations and pursued unregistered brokers.

Florida (FL) — Commercial Finance Disclosure (effective 2023)

• Disclosure regime. Statutorily defined disclosure requirements for commercial financing including MCA, with broker fee disclosure.
• Limited registration. Brokers operating above thresholds register with the Office of Financial Regulation.
• Enforcement. Newer and lighter than CA/NY. Disclosure compliance is the primary enforcement vector.

Texas (TX) — SB 1280

• Disclosure regime. Effective 2024. Standardized commercial-financing disclosure required for transactions to Texas businesses, including APR-equivalent and broker compensation.
• No explicit broker licensing. Texas opted for disclosure without a separate broker registration regime.
• Enforcement. Office of Consumer Credit Commissioner enforces; early stage.

New Jersey (NJ) — SB 819

• Disclosure regime. Commercial financing disclosure law modeled on CA/NY. Effective 2024.
• Broker disclosure. Broker compensation must be itemized on the funding documents.

Connecticut (CT)

• Disclosure regime. Commercial financing disclosure (effective 2024). APR, fee, and broker compensation disclosure required.

Missouri (MO)

• Disclosure regime. SB 1208 commercial financing disclosure (effective 2025). Standardized disclosure form required.

Ohio (OH) — SB 232

• Disclosure regime. Effective 2025. Comprehensive commercial financing disclosure including broker compensation.

Other states

Roughly 35 states have no specific MCA disclosure or licensing law in 2026. Brokers operating in those states are constrained only by funder commission agreements, general consumer protection statutes (which often don't apply to commercial financing), and the threat of state AG action under unfair-and-deceptive-acts theories. The practical gap between MCA broker conduct in California and MCA broker conduct in Wyoming is enormous in 2026.

How brokers actually get paid — the two-layer fee structure

To understand which state rules matter, you have to understand the two layers of broker compensation:

• Layer 1: Funder-paid commission. The funder pays the ISO/broker a commission for the originated deal — typically 4–8% of the funded amount, sometimes higher on smaller deals or competitive deals. This is paid out of the funder's spread; the merchant doesn't directly see it on the contract.
• Layer 2: Broker markup (added to the factor). The broker re-quotes the funder's offer at a higher factor and keeps the difference. On a $100,000 deal with a 0.08 factor markup, that's an extra $8,000 the merchant pays — historically invisible. This is the layer that disclosure laws target.

In states with strong disclosure regimes (CA, NY, VA, UT), Layer 2 must be itemized. In states with explicit caps (GA), Layer 1 + Layer 2 combined cannot exceed the statutory limit. In disclosure-free states, both layers operate without merchant visibility.

How to spot a broker operating outside the rules

Six warning signs in 2026:

• Won't quote APR-equivalent in writing. In a disclosure state (CA, NY, VA, UT, TX, NJ, CT, MO, OH, FL) this is now a legal obligation, not an option. If they refuse, walk.
• Can't or won't disclose their commission. If they're licensed in a disclosure state and refuse to itemize their fee, file a complaint with the state regulator.
• The factor moves between the verbal quote and the signing document. Common pattern: broker verbally quotes "1.28," final signing document shows 1.34. The spread is often the broker's undisclosed markup.
• The broker isn't registered in your state when state law requires registration. Check CA DFPI, NY DFS, VA SCC-BFI, UT DFI, GA SOS registries before signing.
• They pressure you to sign in a different state than your operating state. Brokers sometimes try to route the deal through a state without disclosure requirements. The state of your operating business controls — don't let them paper it otherwise.
• They quote you "factor only" and refuse to walk through fees, term, and reconciliation. Industry standard in 2026 is a full term sheet. A factor-only quote is a broker hiding the math.

Filing a complaint — what actually happens

The complaint paths that have actually produced merchant remediation:

• California DFPI. File at dfpi.ca.gov. Active enforcement bureau, historically responsive on broker conduct.
• New York DFS. File at dfs.ny.gov. The most aggressive state regulator on MCA broker conduct in the country.
• Georgia Secretary of State. File at sos.ga.gov. Will revoke broker registration on substantiated complaints.
• Virginia Bureau of Financial Institutions. File at scc.virginia.gov.
• The funder directly. Often more leverage than the regulator on a specific dollar amount. Funders frequently disclaim and reverse broker fees on substantiated complaints about misconduct.

The 2026 trajectory

Three regulatory trends to watch:

• State coverage is expanding. A model commercial-financing disclosure statute developed by NCSL is now under consideration in 8+ additional states. Expect another 4–6 states to add disclosure regimes by end of 2027.
• CFPB Section 1071 data collection has gone live. Small business financing data — including MCAs above defined size — is now being collected by funders and reported. This data will surface broker fee patterns in ways the public hasn't seen.
• Federal action remains uncertain. CFPB has signaled interest in commercial financing; legislative action is unlikely in the near term. State-level enforcement remains the operative regime.