Tracker · updated November 12, 2026
Commercial financing disclosure laws by state
The short answer
11 states require providers of business financing to give a written cost disclosure before you sign, and 1 more have passed laws that take effect soon. 8 of these laws expressly cover invoice factoring. Thresholds, exemptions and whether an APR is required differ by state, and there is no federal equivalent.
- In effect
- 11 states
- Enacted, coming
- 1 states
- Cover factoring
- 8 laws
- Require an APR
- 3 laws
- Register providers
- 6 states
Every state law at a glance
| State | Effective | Threshold | Covers factoring | APR | Registration |
|---|---|---|---|---|---|
| Virginia | July 1, 2022 | Single sales-based financing transactions of $500,000 or less | No | No | Yes |
| California | December 9, 2022 | Commercial financing offers of $500,000 or less | Yes | Yes | No |
| Utah | January 1, 2023 | Commercial financing transactions of $1,000,000 or less | Yes | No | Yes |
| New York | August 1, 2023 | Transactions of $2.5MM or less | Yes | Yes | No |
| Florida | January 1, 2024 | Commercial financing transactions of $500,000 or less | Yes | No | No |
| Georgia | January 1, 2024 | Commercial financing transactions of $500,000 or less | Yes | No | No |
| Connecticut | July 1, 2024 | Sales-based financing of $250,000 or less | No | No | Yes |
| Kansas | July 1, 2024 | Commercial financing transactions of $500,000 or less | Yes | No | No |
| Missouri | February 28, 2025 | Transactions of $500,000 or less; applies to providers that consummate more than 5 commercial financing transactions with Missouri businesses in a calendar year | Yes | No | Yes |
| Louisiana | August 1, 2025 | n/a | Unclear | No | No |
| Texas | September 1, 2025 | Disclosures apply to specific offers of less than $1 million (§398.051) | No | No | Yes |
| Vermont | July 1, 2027 (upcoming) | Transactions under $1,000,000 (deals of $1MM or more that are not for personal use are excluded) | Yes | Yes | Yes |
Check a specific deal in the disclosure checker, or download the full dataset.
What a disclosure usually shows
Depending on the state, a covered provider's disclosure lists some or all of these, in a set format, before you sign:
- Total amount of funds provided (for factoring, the amount you are advanced on the invoices you sell)
- Amount disbursed after fees and any payoff of other debt
- Total dollar cost of the financing, including fees
- Estimated APR, where the state requires one
- Payment terms: how and when the provider is repaid, or for factoring, how collections work
- Prepayment or early termination costs, and any renewal terms
What a disclosure often leaves out: monthly minimums, how long the contract auto-renews, and how a reserve is released. Read our factoring proposal checklist for the questions to ask.
State by state
Virginia: Sales-based financing disclosure and registration law
HB 1027 (2022), 2022 Acts ch. 516. Va. Code §6.2-2228 et seq.. In effect since July 1, 2022. Applies to Single sales-based financing transactions of $500,000 or less. Covers factoring: no. APR required: no.
Registration: Sales-based financing providers and brokers register with the State Corporation Commission ($1,000 initial fee, $500 annual fee due September 15)
Exemptions: Financial institutions, transactions over $500,000, and providers or brokers with no more than 5 sales-based financing transactions with a recipient in 12 months
Enforcement: Attorney General may seek injunctions, damages, restitution and fees; noncompliant terms are unenforceable against the recipient; no express private right of action
The law defines sales-based financing as repayment over time as a percentage of sales or revenue, which describes merchant cash advances; it does not address invoice factoring. Required disclosures include the finance charge and total repayment amount on an SCC form, but not an APR.
California: California commercial financing disclosure law
SB 1235 (2018), amended by SB 362 (2025). Cal. Fin. Code §22800 et seq., with DFPI regulations in Title 10 of the California Code of Regulations. In effect since December 9, 2022. Applies to Commercial financing offers of $500,000 or less. Covers factoring: yes. APR required: yes.
Exemptions: Depository institutions, deals over $500,000, financing secured by real property, certain vehicle dealer financing, and providers that make no more than one deal (or five incidental deals) in 12 months.
Enforcement: The Department of Financial Protection and Innovation (DFPI) enforces, under the California Financing Law for licensees and the California Consumer Financial Protection Law for others.
Since January 1, 2026, SB 362 bars using 'interest' or 'rate' in a misleading way and requires the APR to be stated whenever a price or pricing metric is quoted during the application process. The disclosure duty falls on the provider, not the broker. No separate registration today. AB 2116 (2026) will require California Financing Law licensing for providers and brokers of commercial financing offers of $500,000 or less, including factoring; most provisions take effect January 1, 2028 and the licensing requirement July 1, 2028.
Utah: Commercial Financing Registration and Disclosure Act
SB 183 (2022). Utah Code §7-27-101 et seq.. In effect since January 1, 2023. Applies to Commercial financing transactions of $1,000,000 or less. Covers factoring: yes. APR required: no.
Registration: Providers must register with the Utah Department of Financial Institutions through NMLS and renew annually (registrations expire December 31)
Exemptions: Depository institutions and their regulated subsidiaries, Farm Credit lenders, licensed money transmitters, providers with 5 or fewer transactions in Utah in 12 months, real-estate-secured deals, leases, purchase-money obligations and deals over $1,000,000
Enforcement: Department of Financial Institutions, with civil penalties of $500 per violation (up to $20,000 per set of documents, higher for repeat violations); no private right of action, and a violation does not void the agreement
Required disclosures are the total funds provided and disbursed, total amount paid back, total dollar cost, payment manner and amounts, and any prepayment costs or discounts. 'Accounts receivable purchase transaction' expressly covers selling accounts at a discount, which is factoring.
New York: New York Commercial Finance Disclosure Law
S5470-B (2020, Chapter 369), amended by S898 (2021). N.Y. Fin. Serv. Law §801 et seq. (Article 8); 23 NYCRR Part 600. In effect since August 1, 2023. Applies to Transactions of $2.5MM or less. Covers factoring: yes. APR required: yes.
Exemptions: Financial institutions, deals over $2.5MM, deals secured by real property, true leases, certain vehicle dealer financing of $50K or more, and providers making 5 or fewer New York deals in 12 months are exempt.
Enforcement: The Superintendent of Financial Services enforces it, with civil penalties of up to $2,000 per violation or $10,000 per willful violation; the statute gives no private right of action.
Section 806 sets the factoring-specific disclosure. Because factoring has no fixed term, the APR shown is an estimate, so compare the dollar finance charge too.
Florida: Florida Commercial Financing Disclosure Law
HB 1353 (2023), ch. 2023-290, Laws of Florida. Fla. Stat. §§559.961 to 559.9615. In effect since January 1, 2024. Applies to Commercial financing transactions of $500,000 or less. Covers factoring: yes. APR required: no.
Exemptions: Federally insured depository institutions and their affiliates, Farm Credit lenders, licensed money transmitters, real-estate-secured deals, leases, purchase-money and vendor financing, providers doing 5 or fewer Florida deals in 12 months, and deals over $500,000.
Enforcement: Attorney General has exclusive authority; fines of $500 per incident (capped at $20,000), or $1,000 per incident (capped at $50,000) after a prior written notice; no private right of action.
For a factoring facility, one disclosure based on an example $10,000 receivable satisfies the law, and no new disclosure is needed each time invoices are purchased. Required figures are dollar amounts: funds provided, funds disbursed, total to be paid, total dollar cost, payment terms and prepayment costs.
Georgia: Georgia commercial financing disclosure law
SB 90 (2023). O.C.G.A. §10-1-393.18. In effect since January 1, 2024. Applies to Commercial financing transactions of $500,000 or less. Covers factoring: yes. APR required: no.
Exemptions: Federally insured depository institutions and their affiliates, Farm Credit lenders, licensed money transmitters, providers doing 5 or fewer Georgia deals in 12 months, real-estate-secured deals, leases, purchase-money and vendor financing, and deals over $500,000.
Enforcement: Attorney General; fines of $500 per violation (capped at $20,000) and $1,000 per repeat violation (capped at $50,000); no private right of action.
Disclosures are dollar figures: funds provided, funds disbursed, total to be paid, total dollar cost, payment terms and prepayment costs, given once before closing. Brokers may not charge advance fees.
Connecticut: Connecticut commercial (sales-based) financing disclosure and registration law
Public Act 23-201 (SB 1032, 2023). Conn. Gen. Stat. §§36a-861 to 36a-872. In effect since July 1, 2024. Applies to Sales-based financing of $250,000 or less. Covers factoring: no. APR required: no.
Registration: Providers and brokers of sales-based financing must register annually with the Connecticut Department of Banking through NMLS (registration deadline was October 1, 2024).
Exemptions: Banks, credit unions and their affiliates, Farm Credit lenders, real-estate-secured deals, leases, purchase-money obligations, vendor financing, and providers that extend no more than 5 deals in Connecticut in 12 months.
Enforcement: Banking Commissioner, who can suspend or revoke registrations, seek injunctions and impose civil penalties of up to $100,000 per violation (§36a-872).
The law defines commercial financing as sales-based financing only, repaid as a share of sales or through a reconciliation mechanism, so a standard invoice factoring deal is not covered. A 2026 bill (HB 5211) to add an APR disclosure and drop the $250,000 cap passed the House but did not pass the Senate before the session ended.
Kansas: Kansas Commercial Financing Disclosure Act
SB 345 (2024). K.S.A. 75-783 through 75-787. In effect since July 1, 2024. Applies to Commercial financing transactions of $500,000 or less. Covers factoring: yes. APR required: no.
Exemptions: Banks and other federally regulated depository institutions and their affiliates, Farm Credit lenders, deals secured by real property, leases, certain purchase money and dealer financing, licensed money transmitters, providers with 5 or fewer Kansas deals in 12 months, and deals over $500,000.
Enforcement: Kansas Attorney General exclusively; civil penalty of $500 per violation (capped at $20,000), rising to $1,000 per violation (capped at $50,000) after prior written notice; no private right of action, and a violation does not void the agreement.
The disclosure lists total funds provided, amount disbursed, total of payments, total dollar cost, payment terms and prepayment terms. For a factoring facility, one disclosure is enough, based on an example of $10,000 in receivables, and no new disclosure is needed for each purchase.
Missouri: Missouri Commercial Financing Disclosure Law
SB 1359 (2024). RSMo 427.300. In effect since February 28, 2025. Applies to Transactions of $500,000 or less; applies to providers that consummate more than 5 commercial financing transactions with Missouri businesses in a calendar year. Covers factoring: yes. APR required: no.
Registration: Commercial financing brokers must register with the Missouri Division of Finance ($100 initial fee, $50 annual renewal due January 31) and keep a $10,000 surety bond on file. Providers themselves do not register.
Exemptions: Depository institutions and their affiliates, Farm Credit lenders, real estate secured deals, leases, licensed money transmitters, providers with 5 or fewer Missouri deals a year, deals over $500,000, certain vehicle dealer and patient injury receivable deals, and (since 2025) premium finance agreements.
Enforcement: Enforced exclusively by the Missouri attorney general; no private right of action. Penalties are $500 per incident (capped at $20,000) and $1,000 per incident (capped at $50,000) after a prior AG notice. A violation does not void the financing contract.
Required disclosures are dollar figures (funds provided, funds disbursed, total of payments, total cost of financing, payment amounts and prepayment terms), not an APR. The statute says a provider's characterization of a receivables deal as a purchase is conclusive that it is not a loan.
Louisiana: Revenue-based financing transaction disclosure
HB 470 (2025), Act 198 of the 2025 Regular Session. La. R.S. 9:3137.10. In effect since August 1, 2025. Covers factoring: unclear. APR required: no.
Exemptions: The statute lists no exemptions and no maximum deal size; it applies only to revenue-based financing transactions, not loans.
Enforcement: The section contains no enforcement or penalty provision and does not authorize a state agency to adopt rules.
The law covers deals where a business sells or forwards a percentage of its sales, revenue or income and payments rise and fall with that volume; it requires one written disclosure (funds provided, funds disbursed, total repayment, total dollar cost, payment terms, prepayment costs) at or before closing. Whether a classic invoice factoring deal falls inside that definition is not addressed in the text, so confirm with counsel.
Texas: Commercial sales-based financing law
HB 700 (2025). Tex. Fin. Code §398.001 et seq.. In effect since September 1, 2025. Applies to Disclosures apply to specific offers of less than $1 million (§398.051). Covers factoring: no. APR required: no.
Registration: Providers and brokers of commercial sales-based financing must register with the Office of Consumer Credit Commissioner; existing businesses by December 31, 2026, renewed by January 31 each year
Exemptions: Banks, credit unions and their affiliates, Farm Credit lenders, real-estate-secured deals, leases, certain $50K+ motor vehicle dealer financing, and seller financing of the provider's own products
Enforcement: Consumer Credit Commissioner, with civil penalties up to $10,000 per violation; the chapter creates no private right of action
The law covers financing repaid as a percentage of sales or revenue (including fixed payments with a true-up), not a purchase of specific invoices, so ordinary invoice factoring is outside it. It also bars automatic debits unless the provider holds a perfected first-priority security interest, and voids confessions of judgment.
Vermont: Commercial financing licensing and disclosure law
H.648, Act 142 (2026). 8 V.S.A. §2247. Takes effect July 1, 2027. Applies to Transactions under $1,000,000 (deals of $1MM or more that are not for personal use are excluded). Covers factoring: yes. APR required: yes.
Registration: Providers must hold a Vermont lender license under the Licensed Lenders chapter (8 V.S.A. ch. 73); anyone soliciting or presenting offers for a third party needs a loan solicitation license
Exemptions: State and federal agencies, depository and other financial institutions under 8 V.S.A. §11101(32), sellers financing their own goods or services, and deals of $1MM or more
Enforcement: Commissioner of Financial Regulation, who may adopt rules and prescribe the disclosure format; a private right of action was not confirmed
For factoring, the provider must disclose the purchase price, amount disbursed, finance charge (including the discount), an estimated APR under Regulation Z Appendix J, total payment amount, avoidable fees and the receivables purchased, and get the recipient's signature before closing. Applies to contracts entered into, modified or restructured on or after July 1, 2027.
States without a disclosure law
As of November 12, 2026, these 39 jurisdictions have no commercial financing disclosure law: Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Washington, West Virginia, Wisconsin, Wyoming.
Bills are introduced most years, so this list shrinks. We re-check every state's status and date every change.
Questions people ask
What is a commercial financing disclosure law?
A state law that makes providers of business financing (loans, merchant cash advances, factoring and similar products) give the business a written, standardized summary of the cost before it signs, much like the federal Truth in Lending Act does for consumers. Each state sets its own dollar threshold, exemptions and required fields.
Do disclosure laws apply to invoice factoring?
Most do. 8 of the 12 state laws we track expressly reach accounts receivable purchase transactions: California, Utah, New York, Florida, Georgia, Kansas, Missouri, Vermont. Coverage also depends on the deal size, the provider (banks are usually exempt) and where the business is located.
Which states require an APR?
California, New York, Vermont require an estimated APR in the disclosure. The others require dollar figures, such as the total cost and amount disbursed, without an APR.
Is there a federal commercial financing disclosure law?
No. The Truth in Lending Act covers consumer credit only. Business financing disclosures exist only where a state has passed its own law, which is why the rules differ so much from state to state.
What if my state has no disclosure law?
Ask for the same information anyway: the advance rate, every fee in dollars on a sample invoice, the minimums, the term and the exit terms. A provider that will not put total cost in writing is telling you something. Our proposal decoder compares up to three offers side by side.