Which States Regulate Merchant Cash Advances?

This page is a plain-English map of state MCA regulation as of 2026: which states have disclosure laws, when each took effect, and what each one actually gives a merchant. Two boundaries before the map. First, this is legal education, not legal advice: it describes statutes factually, with sources, and does not apply them to any reader’s contract. How any law applies to your situation is a question for a licensed attorney in your state. Second, this area moves fast, so treat the review date above as part of the information.

Is the MCA industry actually regulated?

Far less than lending, which is the industry’s defining fact. Because MCAs are structured as purchases of future receivables rather than loans, they have largely sat outside state usury caps, lender licensing, and the federal Truth in Lending Act, which covers consumer credit. As NerdWallet’s 2025 reporting and the industry’s own history reflect, that structure is why a product with triple-digit effective costs could be sold for two decades with no required cost disclosure at all.

What exists instead is a patchwork with three layers: state disclosure laws (the subject of this page), general deception law enforced by the FTC and state attorneys general against specific abusive operators, and court decisions deciding case by case when an advance is really a loan. The disclosure layer is the newest and the fastest-growing.

Which states require financing disclosures today?

Eleven, in force as of September 2026. Vermont has enacted a twelfth, H.648 (2026), that takes effect on July 1, 2027. The table below lists each state, its law, when disclosure duties took effect, and what is distinctive about it.

Sources: American Bar Association, State Survey of the Standard Commercial Financing Disclosure Laws (2025); Venable LLP, State Commercial Financing Disclosure Laws (2026); NY DFS 23 NYCRR Part 600; California DFPI; Mayer Brown analysis of Virginia HB 1027 (2022); Holland & Knight analysis of Texas HB 700 (2025). Details vary by transaction size and provider exemptions; check the current statute.

Two reading notes on the table. Disclosure content differs meaningfully by state: California, New York, and Connecticut require an APR or estimated APR figure, while most of the others center on the total dollar cost, payment amounts, and fees without requiring an annualized rate. And every law carves out exemptions, commonly by transaction size or provider type, so coverage always depends on the specific deal.

What did California’s SB 1235 start?

The end of the no-APR era. SB 1235, enacted in 2018, was the first commercial financing disclosure law in the country, and it aimed directly at the number MCA contracts never state. After four years of rulemaking by the Department of Financial Protection and Innovation, its disclosures took effect on December 9, 2022, requiring providers to show an estimated APR, among other cost terms, on covered offers including merchant cash advances.

California’s regulator has also addressed the other side of the contract. In April 2020, the Department of Business Oversight, now the DFPI, advised small businesses that MCA payments may be lowered when revenue falls and that merchants with fixed daily payments can typically reconcile payments to actual income, and it invited complaints when providers refuse. For a merchant, those are the two most useful facts to come out of California: covered offers must show an estimated APR, and the reconciliation right is real enough that a state regulator tells businesses to use it.

Sources: California DFPI, SB 1235 regulations (effective December 9, 2022); California Department of Business Oversight (now the DFPI) advisory to small businesses with merchant cash advance contracts, April 2020.

What is different about Virginia’s sales-based financing law?

It was first, and it made funders show up on a public list. Virginia’s law, HB 1027 of 2022, took effect on July 1, 2022, making it the first commercial financing disclosure law in operation anywhere in the country. It is also narrower than most: it targets sales-based financing specifically, the category that includes merchant cash advances, rather than all commercial financing.

Its second distinctive feature is registration. Sales-based financing providers and brokers were required to register with Virginia’s State Corporation Commission by November 1, 2022, and renew annually. That gives Virginia merchants something merchants in pure-disclosure states do not have: a public register to check a funder against before signing. Virginia’s disclosures center on the financing amount, the finance charge, and payment terms rather than an APR figure.

Sources: Virginia HB 1027 (2022), codified at Va. Code Title 6.2, Chapter 22.1; Mayer Brown, Virginia Enacts Merchant Cash Advance Registration and Disclosure Law, 2022.

What do Texas, Florida, Georgia, and Utah require?

Cost transparency without an APR mandate, and in Texas and Utah, registration too. Utah’s 2022 act paired disclosure duties with provider registration, effective at the start of 2023. Florida’s 2023 law (effective July 1, 2023) and Georgia’s SB 90 (effective January 1, 2024) both require providers to disclose the financing amount, the total to be repaid, and cost terms, and both regulate brokers, but neither requires an annualized rate.

Texas is the newest and, for the MCA industry, the most pointed. HB 700, effective September 1, 2025, targets commercial sales-based financing specifically, requires written disclosures including the amount financed, finance charge, total repayment amount, fees, and repayment terms, and requires providers and brokers to register with the Office of Consumer Credit Commissioner by December 31, 2026. One provision says a lot about the politics of this area: the law expressly bars the state’s Finance Commission from adopting a maximum rate or fee for sales-based financing. Texas chose transparency, and only transparency.

Sources: Texas HB 700 (2025), Holland & Knight and National Law Review analyses; Florida Commercial Financing Disclosure Law (2023); Georgia SB 90 (2023); Utah Commercial Financing Registration and Disclosure Act (2022).

Does my state’s law apply if my contract chooses New York law?

Often both frameworks matter, and the interaction is exactly the kind of question that needs a licensed attorney rather than a blog post. Two general observations can be made safely. First, most disclosure laws attach based on where the financing recipient is located or does business, because the point is protecting that state’s merchants; a choice-of-law clause naming New York does not, by itself, make a California merchant’s disclosure rights disappear. Second, the clause still matters enormously for everything else: which state’s courts hear a dispute, which state’s procedures govern collection, and which substantive law applies to the contract fight.

New York deserves its own page for that reason: it is the contract law of the industry, the state that reformed confessions of judgment in 2019, and the state whose Attorney General secured the largest MCA enforcement judgment on record. We keep it to one row in the table above and cover it fully in our guide to what New York’s MCA laws mean for your business.

Where is regulation heading next?

Toward more states, and toward the federal government watching rather than leading. The direction of travel has been one way since 2018: from zero states with commercial financing disclosure laws to eleven in seven years, and legislatures in additional states have considered similar bills in recent sessions. On the federal side, the clearest signal came in December 2022, when the CFPB preliminarily determined that the Truth in Lending Act does not preempt the New York, California, Utah, and Virginia disclosure laws, as reported by Ballard Spahr’s Consumer Finance Monitor. That determination left states free to build their own regimes, and they have.

For a merchant, the practical use of this landscape is simple: know whether your state is on the list, and if it is, expect cost disclosures on any new covered offer and check registration where it exists. Disclosure laws help you price the next advance. They do very little about the advances you already have. If daily debits are already eating your margin, the operational guides in this cluster are the better starting point, beginning with our guide to how trucking companies get out of MCA debt if you run a carrier, and the glossary and guides hub for every term used on this page. An honest review of your own numbers costs nothing: our team reads contracts and bank statements for free, and if your situation needs a licensed attorney instead, we say so.

Common questions