A Rapidly Changing Regulatory Landscape
The MCA industry operated with virtually no state-level oversight until 2022. Today, 10 states require some form of commercial financing disclosure: California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah, and Virginia. Several more — including Illinois, Maryland, Mississippi, North Carolina, and New Jersey — have active pending legislation.
These laws share a common goal: requiring MCA providers to give small business borrowers the same type of standardized cost disclosures that consumers receive when taking out a mortgage or car loan. The details vary significantly by state.
New York: The Strictest Standard
New York's Commercial Finance Disclosure Law took effect August 1, 2023, requiring consumer-style Truth in Lending disclosures for commercial financing up to $2.5 million. New York notably requires APR disclosure calculated under Regulation Z methodology and covers both MCA funders and brokers.
New York has also been the most aggressive in enforcement. In January 2025, the Attorney General secured a $1.065 billion judgment against Yellowstone Capital — the largest MCA enforcement action in history. The judgment cancelled $534 million in debt for more than 18,000 small businesses, vacated over 1,100 court judgments obtained through confessions of judgment, and permanently banned Yellowstone and its officers from the industry. A $77 million judgment against Richmond Capital Group followed for similar predatory practices.
New York also banned out-of-state confession of judgment filings in August 2019, a landmark reform that removed one of the most abused enforcement tools in the MCA industry.
California SB 1235: The First Disclosure Law
California was the first state to enact a commercial financing disclosure law. SB 1235 was signed in 2018, with DFPI regulations taking effect December 9, 2022. It requires a standalone Standard Disclosure Form for transactions of $500,000 or less, including total funds provided, total dollar cost, term, estimated APR, payment details, prepayment policies, and broker compensation. In November 2025, the DFPI entered a consent order against a financial services company for failure to provide required disclosures, signaling active enforcement.
Other States with Disclosure Requirements
Virginia was actually the first state law to take effect (July 1, 2022), though narrowly limited to sales-based financing. Utah's act took effect January 1, 2023, but does not currently require APR disclosure. Georgia's law covers transactions under $500,000 after January 1, 2024. Connecticut's disclosure requirements took effect July 1, 2024, limited to sales-based financing under $250,000 with penalties up to $100,000 for violations. Florida's law became mandatory January 1, 2024. Kansas went effective July 1, 2024. Missouri took effect February 28, 2025. Texas requires provider and broker registration by December 31, 2026.
What This Means for You as a Borrower
If you are in a state with disclosure requirements, MCA providers must give you standardized documents showing the total cost of your advance before you sign. Review these disclosures carefully — they exist specifically to help you compare offers and understand the true cost. If a provider operating in a disclosure state does not provide these documents, that is a red flag.
Even if your state does not yet have disclosure requirements, you can and should ask providers for a complete cost breakdown including total repayment amount, effective APR estimate, all fees, and the daily or weekly payment amount. At iAdvance Now, we provide transparent cost breakdowns regardless of state requirements. Apply now or call 866-448-7628.