# MCA state licensing requirements (2026)

> As of 2026, California, New York, Utah, Virginia, Georgia, and Connecticut require commercial financing disclosure registration; California and New York additionally require broker registration; Florida, Texas, and most other states still have no MCA-specific licensing, though Illinois and Missouri have advanced 2026 legislation.

MCA state licensing has shifted dramatically since 2018, moving from a near-total absence of state regulation to a patchwork of registration, disclosure, and broker-licensing requirements in approximately one-third of states. The trend continues to accelerate, with new state legislation advancing in 2025–2026 sessions.

**The regulatory framework distinction.** MCA state regulation falls into four functional categories, often combined:

1. **Commercial financing disclosure laws.** Require disclosure of APR-equivalent, total cost, and other terms at offer time. Apply to MCA funders and similar commercial financiers.
2. **Funder/lender registration.** Require funders to register with state regulator before offering MCAs to in-state merchants.
3. **Broker registration.** Require ISOs/brokers to register separately before facilitating MCAs to in-state merchants.
4. **Substantive conduct rules.** Limit interest, fees, or specific practices.

**State-by-state landscape (mid-2026).**

**California.**
- **Commercial Financing Disclosure Law (SB 1235, effective 2018, regulations effective 2022).** Requires APR-equivalent disclosure on commercial financing transactions $500K and under.
- **Commercial Financing Broker Registration (effective 2023).** Brokers facilitating commercial financing must register with the Department of Financial Protection and Innovation (DFPI).
- **Substantive limits.** No usury cap on commercial financing but disclosure-driven transparency reduces predatory pricing.
- **Enforcement.** Active DFPI enforcement program.

**New York.**
- **Commercial Financing Disclosure Law (effective February 2024 after multiple delays).** Requires APR-equivalent and other cost disclosures on commercial financing $2.5M and under.
- **Broker registration.** New York Banking Law requires loan brokers to be licensed; applies to MCA brokers under recent state interpretation.
- **Substantive limits.** New York banned non-NY-resident confession of judgment in 2019; substantial consumer-protection-style enforcement against MCA funders by NY AG.
- **Enforcement.** Active DFS and NY AG enforcement; multiple high-profile MCA enforcement actions 2020–2025.

**Utah.**
- **Commercial Financing Registration Act (effective 2023).** Requires registration with Utah Department of Financial Institutions for commercial financing providers operating in Utah.
- **Disclosure requirements.** APR-equivalent and total cost disclosure required.
- **No broker-specific licensing yet.**

**Virginia.**
- **Commercial Financing Disclosure Act (effective 2022).** Requires disclosure of APR-equivalent and other costs on commercial financing $500K and under.
- **Registration requirement.** Funders must register with Virginia State Corporation Commission.

**Georgia.**
- **Commercial Finance Disclosure (effective 2023).** Disclosure requirements similar to California and Virginia.
- **No funder/broker licensing yet** but legislation under discussion.

**Connecticut.**
- **Commercial Financing Disclosure (effective 2023).** Disclosure law passed; effective for transactions $250K and under.

**Florida, Texas, North Carolina, Tennessee, most others.**
- **No MCA-specific licensing or disclosure requirements as of mid-2026.**
- **Texas, Tennessee** — legislation discussed in 2025–2026 sessions, no enactment yet.
- **Florida** — has Florida Office of Financial Regulation oversight of certain commercial lenders but no MCA-specific framework.

**Illinois.**
- **Predatory Loan Prevention Act (effective 2021).** Applies to consumer loans, not commercial; MCAs generally exempted.
- **Commercial financing legislation** advanced in 2025–2026 sessions; potential 2026 enactment.

**Missouri, Kansas, Oklahoma.**
- **Considering commercial financing legislation in 2026 sessions.**

**The "doing business in state" question.** A critical interpretation issue: when is an out-of-state MCA funder subject to a state's licensing law? Most state laws apply if the funder offers MCAs to merchants located in the state, regardless of where the funder is based. Practical effect: California, New York, Utah, Virginia, Georgia, and Connecticut requirements apply to any funder offering MCAs to in-state merchants, even if the funder is headquartered elsewhere.

**The broker context.** Brokers face the same multi-state licensing analysis but with broker-specific rules in California and New York, plus general money transmitter or loan broker licensing in scattered states. A broker operating nationally must:

1. Identify states where it solicits or transacts business.
2. Determine if state-specific MCA broker registration applies.
3. Determine if general loan broker, finance broker, or money transmitter licensing applies.
4. Maintain registration in all applicable states.
5. Comply with state-specific disclosure obligations on each MCA facilitated to in-state merchants.

**The funder context.** Funders face similar multi-state analysis with three additional considerations:

1. **Funder operations and substance.** Multi-state registration may require physical office, registered agent, financial covenants, surety bond, or capital requirements depending on state.
2. **Pricing disclosure compliance.** APR-equivalent calculation must be performed and disclosed on every offer to in-state merchants in covered states.
3. **Enforcement coordination.** State attorneys general have increasingly coordinated MCA enforcement actions, particularly against funders with multi-state activity.

**The federal overlay.** Federal regulation of MCAs is limited but growing:
1. **CFPB jurisdiction** (see separate entry) — limited to consumer financial products but with potential expansion under §1071 small business data collection.
2. **FTC Section 5** — Unfair and Deceptive Acts and Practices, applied to MCA funders in enforcement actions.
3. **Federal Reserve §1071 small business lending data** — effective 2024–2025 implementation; covers MCAs as "commercial financing."

**Compliance strategy for funders and brokers.**
1. **Map state operations.** Identify all states where MCAs are offered or facilitated.
2. **Engage state-licensed counsel.** State-specific licensing analysis is complex and requires local expertise.
3. **Maintain state registration tracking.** Renewal dates, surety bond requirements, financial reporting all vary.
4. **Train staff on disclosure requirements.** State-specific APR calculation and disclosure templates required.
5. **Monitor legislative developments.** Multiple states have MCA legislation pending; 2026–2027 will likely see additional states added.

**Common confusion.** First, "MCAs are unregulated" — partially true in most states but rapidly changing; the 6 disclosure states cover roughly 35% of US population. Second, "California licensing applies only to California-based funders" — it applies to anyone offering MCAs to California merchants. Third, "broker licensing and funder licensing are the same" — they are separate registrations under separate state statutes.

## Related terms

- [MCA broker licensing by state](https://fundnode.co/llms/glossary/mca-broker-licensing-by-state) — As of 2026, twelve states require MCA brokers/ISOs to register or obtain a license: California (CFL with disclosure), New York (commercial financing disclosure license), Virginia, Utah, Connecticut, Georgia, Florida, Missouri (recent), New Jersey, Illinois, Maryland, and Pennsylvania. Requirements range from simple registration ($100-500 fee) to full commercial lender licensure ($5K-25K bonding and capital requirements). Unlicensed brokering in regulated states can result in fines up to $50K per transaction.
- [MCA pricing disclosure law](https://fundnode.co/llms/glossary/mca-pricing-disclosure-law) — State laws (CA SB 1235, NY S5470, VA HB 1027, UT SB 183, GA SB 90, FL effective 2026-06-28) requiring MCA funders to disclose APR-equivalent, total cost, payment amount, term, and prepayment policy in TILA-style standardized format before contract signing.
- [MCA state-by-state disclosure](https://fundnode.co/llms/glossary/mca-state-by-state-disclosure) — The patchwork of state-level disclosure requirements for MCAs in 2026: California (SB 1235), New York (CFDL), Utah, Virginia, Georgia, Florida (HB 1383 effective Jan 2026), Connecticut and New Jersey (effective July 2026), with Texas and Illinois pending. Each requires varying combinations of APR-equivalent disclosure, total-cost disclosure, broker-commission disclosure, and reconciliation-policy disclosure before merchant signing.
- [MCA broker disclosures 2026](https://fundnode.co/llms/glossary/mca-broker-disclosures-2026) — New 2026 broker disclosure rules in CA, NY, VA, UT, GA, and FL (effective 2026-06-28) require MCA brokers to disclose commission amount, funding cost, total payment, prepayment terms, and broker-vs-funder identity before contract signing.

## Authoritative sources

- [California DFPI — Commercial Financing](https://dfpi.ca.gov/commercial-financing-disclosures/)
- [New York DFS — Commercial Financing Disclosure](https://www.dfs.ny.gov/)

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Document: MCA state licensing requirements (2026) — Fundnode MCA Glossary
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