Merchant Cash Advance by State — Laws, Rules & Requirements

Eleven states — California, Connecticut, Florida, Georgia, Kansas, Louisiana, Missouri, New York, Texas, Utah, and Virginia — had a commercial financing disclosure law in effect as of October 10, 2026 (Vermont has enacted one that takes effect July 1, 2027); each requires a written cost disclosure before a business signs covered financing, and only California and New York require that disclosure to state an APR. The format and the figures required vary by statute. The other 38 states and DC have no state-specific MCA disclosure law; an MCA there is governed by federal law and the contract itself.

Not entirely — federal law still applies everywhere (the FTC and CFPB have both scrutinized MCA marketing, disclosure, and collection practices nationally), and general contract law governs the agreement you sign. But without a state-mandated disclosure format, the burden shifts to you: ask any provider in writing for the total repayment amount, the holdback percentage or fixed payment amount, and the estimated repayment period before signing — a factor rate alone (e.g., 1.3) doesn't tell you that number. MCA factor rates of 1.18–1.55 work out to roughly 34–189% APR (computed illustration); the "How a merchant cash advance works" section above has a calculator link to run your own offer's numbers.

MCA is structured as a purchase of future receivables, not a loan, which is why it's priced as a factor rate rather than an interest rate/APR and generally falls outside state usury caps. States that have enacted CFDLs (starting with California's SB 1235 in 2018) deliberately wrote them broadly enough to reach "sales-based financing" — MCA was a primary legislative target, since consumer-style APR disclosure doesn't otherwise apply to receivables purchases.

New York's Commercial Finance Disclosure Law (S5470-B) sits alongside a separate, specific New York rule: a 2019 amendment to CPLR 3218 that bars confession-of-judgment filings against out-of-state debtors — a direct legislative response to New York state courts historically being the venue MCA providers used to enter fast judgments against merchants nationwide. No other state on this page carries that specific documented COJ history.

Yes. Texas: HB 700 (2025), Tex. Fin. Code ch. 398 — September 1, 2025; provider and broker registration by December 31, 2026. Louisiana: HB 470 (2025 Regular Session), Act 198, La. R.S. 9:3137.10 — August 1, 2025. If you are evaluating an MCA offer in either state now, ask the provider for the written disclosure. Neither law requires an APR in it.

The statutes on this page were last read on October 10, 2026. State commercial financing disclosure law is an active area — Vermont enacted a law in June 2026 that takes effect July 1, 2027, and bills are pending in other states. Each row links to the legislature page it was checked against; if the status of a state has changed, that page is the place to confirm it.