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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.
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.
The states with disclosure regimes on the books
| State | Regime | What it generally requires | Who regulates it |
|---|---|---|---|
| California | Commercial Financing Disclosure (SB 1235), regulations administered by the Department of Financial Protection and Innovation | Standardised disclosures before a commercial financing offer is consummated, including an annualised rate for covered transactions. Sales-based financing is expressly covered. | 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 |
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
- California DFPI — commercial financing disclosure regulations
- New York Department of Financial Services
- Utah Department of Financial Institutions
- Virginia State Corporation Commission — Bureau of Financial Institutions
- Georgia Department of Banking and Finance
- Florida Office of Financial Regulation
- Connecticut Department of Banking
- Kansas Office of the State Bank Commissioner
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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