Free tool · State rules
Does my factoring deal need a disclosure?
The short answer
It depends on your state and your deal size. 11 states now require written cost disclosures on commercial financing, most with a dollar threshold, and most of those laws reach invoice factoring. Pick your state and amount to see whether yours likely applies.
Result
A disclosure is likely required
California commercial financing disclosure law (Cal. Fin. Code §22800 et seq., with DFPI regulations in Title 10 of the California Code of Regulations) is in effect (since December 9, 2022) and applies to Commercial financing offers of $500,000 or less. It expressly reaches accounts receivable purchases (factoring). A covered provider must give you a written cost disclosure before you sign, including an estimated APR. 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.
All California factoring rules · Every state law
General information, not legal advice. Exemptions that depend on the provider are not checked.
How this checker decides
It looks up the state where your business is located in our state rules dataset and checks three things: whether that state has a commercial financing disclosure law in effect or enacted, whether your deal is under its dollar threshold, and whether the law reaches the kind of financing you picked. Factoring is covered when the law reaches accounts receivable purchase transactions.
It cannot see exemptions that turn on the provider, such as a bank or a provider that does only a few deals a year in the state. Treat a "likely required" answer as a reason to ask for the disclosure, not as a legal conclusion.
What to do with the answer
If a disclosure is likely required and the offer arrived without one, ask for it in writing before you sign. If your state has no law, ask for the same figures anyway: the amount advanced, total dollar cost on a sample invoice, every fee, minimums, the term and how you exit.
Then compare offers in the proposal decoder, and see every state law in the disclosure law tracker.
Questions people ask
Which states require disclosures on factoring?
California, Florida, Georgia, Kansas, Missouri, New York, Utah, Vermont have laws that expressly reach factoring (accounts receivable purchases), subject to each state's threshold and exemptions.
Does the law follow my state or the funder's state?
Generally the state where the business receiving the financing is located or principally does business, not where the provider is. Check the law's text or ask counsel if you operate in several states.
Is a disclosure the same as a good deal?
No. A disclosure makes the cost visible; it does not make it fair. Use it to compare offers on the same basis and to spot fees, minimums and renewal terms the headline rate leaves out.
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