# 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 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.** 1. **Total amount of funds disbursed.** The actual cash to merchant (after fees/holdbacks). 2. **Total amount paid.** Factor × advance amount, plus all fees. 3. **APR.** Annualized rate calculated using prescribed methodology (state-specific). 4. **Total dollar cost.** Total amount paid minus total funds disbursed. 5. **Average monthly payment.** Calculated using prescribed methodology. 6. **Payment frequency.** Daily, weekly, monthly. 7. **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](https://fundnode.co/llms/glossary/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](https://fundnode.co/llms/glossary/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](https://fundnode.co/llms/glossary/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. --- Source: https://fundnode.co/glossary/mca-disclosure-law-comparison-by-state-2026 (HTML version) Document: MCA disclosure law comparison by state 2026 — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.