The Commercial Financing Disclosure Laws, State by State

For most of the history of small business finance, commercial transactions carried no required disclosures. Consumer credit had Truth in Lending; business credit had whatever the funder chose to put on the term sheet.

That is over. Ten states now require written cost disclosures on commercial financing, and the laws are not identical. They differ on dollar thresholds, on which products they cover, on who has to deliver the disclosure, and on whether brokers register.

Here is where it stands as of September 2026.

The states with laws in effect

California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah and Virginia.

The thresholds vary more than people expect:

• New York reaches transactions up to $2,500,000, the widest in the country, and covers closed-end financing, open-end plans, sales-based financing and factoring.
• Utah covers deals of $1,000,000 or less.
• Texas covers sales-based financing under $1,000,000.
• California covers financing of $500,000 or less.
• Virginia covers sales-based financing under $500,000.
• Connecticut covers sales-based financing up to $250,000, the lowest threshold of the group.

Georgia, Florida, Kansas and Missouri each set their own coverage, generally in the $500,000 range. Several states include a small-volume exemption, typically for providers doing five or fewer transactions a year in the state. Real-property-secured financing is excluded in most of them.

What the disclosures have to say

The details differ, but the common core is the numbers a business owner needs to compare one offer against another: the total amount financed, the total dollar cost of the financing, the total repayment amount, the payment schedule and amounts, any prepayment terms, and the fees.

California went further. Under SB 362, effective in 2025, pricing has to be expressed as an annual percentage rate, and it restricts using words like "interest" or "rate" in a way that misleads. If you state a charge or a financing amount to a California prospect, the APR has to come with it. California also requires annual reporting by March 15.

That APR requirement is the direction of travel, and it changes conversations. A factor rate that sounds modest turns into an APR that does not, and the disclosure puts the comparison in front of the client whether or not you raise it. Brokers who already explain cost honestly gain from this. Brokers whose pitch depends on the client not doing the math do not.

Where brokers come into it

This is the part that gets skipped, because people assume disclosure is the funder's problem.

Texas is the clearest case. Under Texas Finance Code chapter 398, enacted as HB 700 and effective September 1, 2025, both providers and brokers of commercial sales-based financing must register with the Office of Consumer Credit Commissioner. Registration is $1,000 initially and $1,000 a year to renew, and the deadline is December 31, 2026. There is no exemption for low volume. If you broker sales-based financing to Texas businesses, that date applies to you.

Connecticut requires commercial financing brokers to register with the Department of Banking. Virginia requires registration for brokers of sales-based financing. Utah takes the other approach: providers register, brokers do not.

New York can put a broker in the disclosing seat. Under N.Y. Fin. Serv. Law § 801, a broker can itself be a disclosing party on covered transactions up to $2,500,000. Legislation that would add broker registration in New York has been introduced and is still pending; it is not law today, and anyone telling you otherwise is guessing.

What actually goes wrong

Almost none of the enforcement risk here is about calculating a number wrong. The failures are procedural.

The disclosure arrives after the client has already decided. These laws are about the moment of comparison. A disclosure delivered alongside the closing documents is technically present and practically useless, and regulators read it that way.

Nobody kept the record. The obligation is not just to disclose. It is to be able to show you disclosed, to the right person, at the right time, in the right version. Operators who track this in email threads find out how weak that record is at exactly the wrong moment.

The marketing contradicts the disclosure. A rate stated in an ad, on a website or in a text message that does not match what the disclosure shows is its own problem, and in California the APR language rules apply to what you say to prospects, not only to what is in the file.

The state is decided by the borrower, not by you. You do not get to work under your home state's rules. A Tampa broker placing a deal for a Hartford business is in Connecticut's $250,000 world.

What to do about it

Four things, none of which require a lawyer to start:

1. Know which states your deals are actually in. Pull your last hundred files and sort by borrower state. Most operators are surprised: the concentration is usually higher than they thought, which makes the work smaller than they feared.
2. Handle Texas now. December 31, 2026 is a real date with a real fee and no volume exemption. Register, or stop placing sales-based financing with Texas businesses.
3. Fix the timing before you fix the format. Get the disclosure in front of the client at the point of comparison. The funder usually generates the document; whether it arrives at a useful moment is often down to the broker.
4. Keep the record. Which version, delivered when, to whom, and how. If your system cannot produce that on demand, that is the gap worth closing first. It is the same discipline that credit authorizations require, and it is the same evidence problem.

The underlying shift is simple enough. Commercial finance is being asked to show its pricing in a form a business owner can compare. For anyone who was already doing that, this is paperwork. For anyone who was not, it is a business model question, and the states are going to keep asking it.

Current as of September 2026. Thresholds, effective dates and registration requirements change; verify against the current statute and the state regulator before relying on any of this. General information for operators, not legal advice.

Sources: Venable LLP, State Commercial Financing Disclosure Laws · Texas OCCC, adopted chapter 86 rules · Alston & Bird, Commercial Financing Disclosure Requirements and Exemptions