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The states that make them show you the cost

A growing group of states now requires standardised, written disclosures before a commercial financing deal closes — some of them including an APR. Most owners have never been told they are entitled to one.

By MCAFax · Last updated November 2, 2026 · How we source this

For most of this industry's history, the answer to "what is the interest rate?" was "it's not a loan, so there isn't one." That is still legally true of the product structure. It is no longer the whole story about what has to be written down.

Since 2022, a series of states have enacted commercial financing disclosure laws. They differ in the details, but the shape is consistent: before a covered commercial financing transaction closes, the provider must give the business a standardised written disclosure of what the money costs and how repayment works. California and New York go furthest, requiring an annualised rate — an APR or estimated APR — on covered transactions. The Utah-style states require the total dollar cost and payment terms instead, on the theory that APR is a poor fit for a variable-repayment product.

Why this is worth knowing even if you are not in one of these states. Providers who operate nationally often build one disclosure process rather than nine. Asking "please send me the standardised commercial financing disclosure for this offer" is a question a professional shop can answer, and one that a shop hoping you never do the arithmetic tends to find inconvenient.

The states with disclosure regimes on the books

State	Regime	What it generally requires	Who regulates it
California	Commercial financing disclosures (SB 1235, existing law) and AB 2116 (Chapter 823, Statutes of 2026; approved September 30, 2026), which adds licensing and conduct rules under the California Financing Law, administered by the Department of Financial Protection and Innovation. AB 2116 is not in force yet. Its license requirement takes effect July 1, 2028.	Existing law requires standardised disclosures before a commercial financing offer is consummated, including an annualised rate for covered transactions. Sales-based financing is expressly covered by those disclosure rules. The disclosure rules are existing law. AB 2116 adds licensing and conduct rules under the California Financing Law (CFL) for commercial financing providers. AB 2116 is not in force yet. Its license requirement takes effect July 1, 2028. Section 22655(e)(1) defines commercial financing as an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing, intended by the recipient for use primarily for a purpose other than a personal, family, or household purpose. The bill does not name sales-based financing or merchant cash advances, and it is silent on whether either falls under AB 2116. Morrison Foerster writes that the amendments bring covered small-business commercial financing operating in California, including factoring and other accounts receivable purchase transactions such as merchant cash advances, into the CFL. A recipient under Section 22655(l) is a small business or small business owner presented a specific commercial financing offer equal to or less than $500,000. A small business under Section 22655(o)(1) is a business entity organized for profit with annual gross receipts of no more than $16 million, or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater. The new chapter is operative January 1, 2028 (Section 22662). Beginning July 1, 2028, Section 22100.6 prohibits engaging in the business of a commercial financing provider or a commercial financing broker without a license from the commissioner, except that a person may do so if the person submits a complete application on or before July 1, 2028 and is awaiting approval or denial. Section 22658 limits enforceability of a covered contract on and after January 1, 2028 unless the provider is licensed, has a complete application pending, or the contract was entered before that date. Section 22659(a) bars a confession of judgment before default. Section 22659(d) requires a commercial financing broker to post the average and maximum annual percentage rate on its website. Section 22656 says this chapter does not apply to a commercial financing transaction secured by real property, or to a person who makes one or fewer commercial financing transactions in the state in a 12-month period, among the other exemptions in that section.	CA Dept. of Financial Protection and Innovation
New York	Commercial Finance Disclosure Law, administered by the Department of Financial Services	Disclosure at the time an offer is extended, including estimated APR, finance charge, term and payment amounts, for a range of commercial financing including sales-based financing.	NY Dept. of Financial Services
Utah	Commercial Financing Registration and Disclosure Act	Registration of commercial financing providers plus standardised disclosures — total dollar cost and payment terms rather than an APR.	Utah Dept. of Financial Institutions
Virginia	Sales-based financing disclosure and broker registration	Disclosures aimed specifically at sales-based financing, plus registration of brokers — one of the few regimes that reaches the person actually calling you.	Virginia State Corporation Commission
Georgia	Commercial financing disclosure (SB 90) with a registration requirement	Standardised disclosure of the total amount, finance charge and payment schedule for covered commercial financing, in the Utah/Virginia style rather than the APR style.	Georgia Dept. of Banking and Finance
Florida	Commercial Financing Disclosure Law	Pre-consummation disclosure of amount financed, finance charge, payment amounts and prepayment terms for covered commercial financing.	Florida Office of Financial Regulation
Connecticut	Commercial financing disclosure and provider registration	Disclosure plus registration of providers and certain brokers of commercial financing.	Connecticut Dept. of Banking
Kansas	Commercial Financing Disclosure Act	Standardised commercial financing disclosures, following the Utah/Virginia model.	Kansas Office of the State Bank Commissioner

Update, November 2026. The Governor approved AB 2116 on September 30, 2026, and it was filed with the Secretary of State the same day. The Secretary of State chaptered it as Chapter 823, Statutes of 2026. AB 2116 adds licensing and conduct rules under the California Financing Law (CFL) for commercial financing providers. AB 2116 is not in force yet. Its license requirement takes effect July 1, 2028. The commercial financing disclosure rules are existing law. The new chapter is operative January 1, 2028 (Section 22662). Section 22100.6, operative July 1, 2028, provides that a person shall not engage in the business of a commercial financing provider or a commercial financing broker without obtaining a license from the commissioner, except that a person may do so if the person submits a complete application on or before July 1, 2028 and is awaiting approval or denial. Section 22655(e)(1) defines commercial financing as an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing, intended by the recipient for use primarily for a purpose other than a personal, family, or household purpose. The bill does not name sales-based financing or merchant cash advances, and it is silent on whether those products fall under that definition. Morrison Foerster writes that the amendments bring covered small-business commercial financing operating in California, including factoring and other accounts receivable purchase transactions such as merchant cash advances, into the CFL. Section 22658 limits enforceability of a covered contract on and after January 1, 2028 unless the provider is licensed, has a complete application pending, or the contract was entered before that date. Section 22659(a) bars a confession of judgment before default. Section 22659(d) requires a commercial financing broker to post the average and maximum annual percentage rate on its website. Section 22656 says this chapter does not apply to any of the following: a commercial financing provider that is a lender regulated under Chapter 23 (commencing with Section 2001) of Title 12 of the United States Code; a commercial financing transaction secured by real property; a commercial financing transaction in which the recipient is a dealer, as defined in Section 285 of the Vehicle Code, or an affiliate of a dealer; a commercial financing transaction in which the recipient is a vehicle rental company, or an affiliate of a vehicle rental company, pursuant to a specific commercial financing offer or commercial open-end credit plan of at least $50,000, including a commercial loan made pursuant to that commercial financing transaction; a person who makes one or fewer commercial financing transactions in the state in a 12-month period; and a person who makes five or fewer commercial financing transactions in the state in a 12-month period that are incidental to the business of the person relying upon the exemption. Morrison Foerster's October 15, 2026 client alert is California Expands the California Financing Law to Include Small Business Commercial Financing. The bill text is AB 2116.

This table is a starting map, not a compliance reference. Effective dates, thresholds, transaction-size caps and exemptions vary considerably — several regimes exempt transactions above a dollar threshold, or financing by depository institutions — and more states have introduced similar bills. Verify against the regulator's own page before relying on any of it, and tell us at info@mcafax.com if something here has moved.

What to ask for, in writing

"Please send the standardised commercial financing disclosure for this offer, in writing, before I sign."
"What is the total repayment amount, the total dollar cost of the financing, and every fee?"
"What is the estimated APR or annualised rate?" — if they are in a state that requires it, they have the number; if not, ask anyway and compare it to your own calculation.
"Are you the funder or a broker, and what are you paid on this deal?"
"Is your company registered in my state, and under what name and licence number?" — some of these regimes register providers, and Virginia and Connecticut reach brokers.

Get the answers by email. An integration clause in the contract will later say the agreement supersedes everything said on the phone — clause 10 — so anything that matters needs to be on paper.

If you were not given a required disclosure

These laws are enforced by state regulators, not usually by a private lawsuit — the remedies and enforcement mechanisms differ by state, and several regimes expressly leave contract validity untouched. The practical route is a complaint to the regulator in the table above, or to your state attorney general, with the offer documents attached. The complaint map has the filing links.

Sources

Laws and agency pages in this area move. If something here is out of date, tell us at info@mcafax.com and we will fix it. MCAFax is not a law firm and this is not legal advice.

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