# 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 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: 1. **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. 2. **New York — Commercial Finance Disclosure Law registration.** Required for any commercial financing provider. Threshold: any MCA transaction with NY merchant. Fee: $300-$500 + annual. 3. **Utah — Money Transmitter License (in some structures).** Required for some MCA structures. Threshold: $250K aggregate annual originations. 4. **Virginia — VA Bureau of Financial Institutions registration.** Required for commercial financing providers. Threshold: any VA merchant. 5. **Georgia — GA Department of Banking and Finance registration.** Required for commercial financing under SB 90. Threshold: $50K aggregate annual originations. 6. **New Jersey — NJ Department of Banking registration.** Required for commercial financing under S 819. Threshold: any NJ merchant. 7. **Connecticut — CT Banking Department registration.** Limited circumstances; small-business commercial financing. 8. **Florida — FL Office of Financial Regulation registration.** Required for consumer finance companies; MCA classification disputed. 9. **Illinois — IL Department of Financial and Professional Regulation.** Limited circumstances; some MCA structures. 10. **Texas — TX Office of Consumer Credit Commissioner.** Limited circumstances; sale-of-receivables structure generally exempt. 11. **Washington — WA Department of Financial Institutions.** Limited circumstances; some MCA structures. 12. **Massachusetts — MA Division of Banks.** Limited circumstances; consumer finance company classification disputed. 13. **Minnesota — MN Department of Commerce.** Limited circumstances. 14. **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](https://fundnode.co/llms/glossary/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](https://fundnode.co/llms/glossary/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](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. --- Source: https://fundnode.co/glossary/mca-licensing-thresholds-by-state-2026 (HTML version) Document: MCA licensing thresholds by state 2026 — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.