Most U.S. states have no law written for merchant cash advances. 11 do, and 7 of those stop protecting the business at $500,000 or less. This survey lists every state law we found that requires disclosures or registration for merchant cash advances and other commercial financing, how large a deal it covers and what it requires, with a link to each law.
Key findings
- 11 states have a law in force that reaches merchant cash advances: California, Connecticut, Florida, Georgia, Kansas, Louisiana, Missouri, New York, Texas, Utah, Virginia. Vermont's is enacted but not yet in effect. The other 38 states and the District of Columbia have none.
- 7 of those 11 cover only deals of $500,000 or less: California, Connecticut, Florida, Georgia, Kansas, Missouri, Virginia. A business taking a larger advance there gets none of their protections.
- Only 4 reach larger deals: Louisiana (no dollar cap); New York (up to $2.5 million); Texas (under $1 million); Utah (up to $1 million).
- 2 require an estimated annual percentage rate in the disclosure, and 5 require funders or brokers to register with the state.
- Texas and Virginia bar confessions of judgment in these contracts, California's ban starts in 2028, and New York limits where one can be filed.
State merchant cash advance laws
As of October 9, 2026.
Which states regulate merchant cash advances?
As of October 9, 2026, 11 states have a commercial financing law in force that reaches merchant cash advances: California, Connecticut, Florida, Georgia, Kansas, Louisiana, Missouri, New York, Texas, Utah, Virginia. Vermont has enacted one that takes effect later. These laws mostly require a written disclosure before the deal closes, showing the amount funded, the total cost, the payment amounts and prepayment terms; 2 also require an estimated annual percentage rate. None of them caps what an advance can cost.
| State | Law | In effect | Deals covered | Registration | What it requires | Source |
|---|---|---|---|---|---|---|
| California | Commercial Financing Disclosures (Fin. Code Div. 9.5, SB 1235) Cal. Fin. Code §§22800-22807 | Disclosure duty from Dec 9, 2022 (operative date of 10 CCR §§900-956 | under $500,000 | No | Estimated APR, total cost, payment amounts. SB 666 (small businesses, offers of $500,000 or less): no fee for processing ACH debit payments (NSF fees excepted), no payoff-statement fee, no… | Law |
| Connecticut | An Act Requiring Certain Financing Disclosures (commercial sales-based financing disclosures and registration) Conn. Gen. Stat. §§36a-861 to 36a-872 | July 1, 2024 (disclosures for offers on or after July 1, 2024) | up to $250,000 | Yes | total cost, payment amounts. Renewal disclosures: when a new financing must pay off existing financing from the same provider, the provider must disclose the prepayment charges… | Law |
| Florida | Florida Commercial Financing Disclosure Law Fla. Stat. §§559.961-559.9615 (Part XIII of ch. 559) | Act effective July 1, 2023 | up to $500,000 | No | total cost, payment amounts | Law |
| Georgia | Commercial financing disclosures (Fair Business Practices Act) O.C.G.A. §10-1-393.18 | Applies to transactions consummated on or after Jan 1, 2024 | up to $500,000 | No | total cost, payment amounts | Law |
| Kansas | Commercial Financing Disclosure Act 2024 Kan. Sess. Laws, SB 345 (K.S.A. section numbers not verified) | On publication in the statute book: July 1, 2024 (secondary source) | up to $500,000 | No | total cost, payment amounts | Law |
| Louisiana | Revenue-based financing transaction disclosure La. R.S. 9:3137.10 | Aug 1, 2025 (secondary source) | no dollar cap | No | total cost, payment amounts. Declares revenue-based financing is not a transaction for the use of money and amounts charged are not interest (shields it from usury treatment). | Law |
| Missouri | Commercial Financing Disclosure Law RSMo §427.300 | Section effective Aug 28, 2024 (amended version Aug 28, 2025) | up to $500,000 | Yes | total cost, payment amounts | Law |
| New York | Commercial Finance Disclosure Law (Financial Services Law Article 8) N.Y. Fin. Serv. Law §§801-812 | Compliance required from Aug 1, 2023 (23 NYCRR 600.25: six months after the Feb 1, 2023… | up to $2.5 million | No | Estimated APR, total cost, payment amounts. CPLR 3218 (2019) limits where judgments by confession may be filed | Law |
| Texas | Commercial Sales-Based Financing (Finance Code Chapter 398) Tex. Fin. Code ch. 398 | Sept 1, 2025 | under $1 million | Yes | total cost, payment amounts. Contracts containing a confession of judgment or any similar provision are void and unenforceable (§398.055). | Law |
| Utah | Commercial Financing Registration and Disclosure Act Utah Code §§7-27-101 to 7-27-301 | Registration required beginning Jan 1, 2023 | up to $1 million | Yes | total cost, payment amounts | Law |
| Vermont not yet in effect | Commercial financing licensing and disclosure provisions of Act 142 (2026), 'An act relating to banking,… 8 V.S.A. §2247 (new) per secondary sources | July 1, 2027 (secondary sources) | under $1 million | Yes | Estimated APR. Confession-of-judgment provisions void and unenforceable (secondary sources). | Law |
| Virginia | Sales-Based Financing Providers (Chapter 22.1) Va. Code §§6.2-2228 to 6.2-2238 | Applies to contracts entered on or after July 1, 2022 | up to $500,000 | Yes | total cost, payment amounts. No confession of judgment or similar provision (§6.2-2234(C)). | Law |
Do these laws apply to advances over $500,000?
Mostly not. 7 of the 11 laws in force cover only deals of $500,000 or less. The exceptions are Louisiana (no dollar cap); New York (up to $2.5 million); Texas (under $1 million); Utah (up to $1 million). An owner who signs a $750,000 advance in a state with a $500,000 cap gets no state-required disclosure at all, which is one reason owners with large stacks often cannot say what their advances cost.
Which states restrict confessions of judgment?
| State | Law | What it does | Source |
|---|---|---|---|
| New York | N.Y. CPLR 3218(b) | All confessions of judgment (not MCA-specific). A confession may be filed only in the county where the defendant said it resided when the affidavit was signed or resides at filing; entities reside where they have a place of business. The sponsor memo targets out-of-state small business owners. | Source |
| Virginia | Va. Code §6.2-2234(C) | Sales-based financing contracts may not contain a confession of judgment or any similar provision. | Source |
| Texas | Tex. Fin. Code §398.055 | A commercial sales-based financing contract with a confession of judgment or similar provision is void and unenforceable. | Source |
| California | Cal. Fin. Code §22659(a) (added by AB 2116, Stats. 2026 ch. 823) | Commercial financing providers and brokers may not take a confession of judgment or power of attorney before default (small-business offers of $500,000 or less). | Source |
| Vermont | 8 V.S.A. §2247 (Act 142 of 2026), per secondary sources | Confession-of-judgment provisions void in covered commercial financing contracts (secondary sources; enacted text not opened). | Source |
| Connecticut | Conn. Gen. Stat. §36a-868 (related restriction, not a COJ ban) | Commercial financing contracts (sales-based, $250,000 or less) may not waive notice, hearing or court order before prejudgment remedies such as attachment or garnishment. | Source |
Which bills are pending?
- Maryland: HB 1007 (2026), Commercial Financing - Small Business Truth in Lending Act. Not enacted (source)
- Maryland: SB 881 (2026), Financial Institutions and Activities - Licensing Requirements and Regulation of Commercial Financing. Not enacted (source)
- New Jersey: S1760 (2026-2027 session). Pending as of Mar 2, 2026 (secondary source) (source)
What this means for a business that owes $500,000 or more
Above $500,000 most of these protections fall away, so the contract, the law of the state named in it and the courts' view of whether the deal is really a loan decide what an owner can do. That is why reading every agreement matters more at this size, and why the questions in our court decisions study come up in almost every large-stack negotiation. Our guide to MCA debt over $500,000 explains the options.
Method and limits
- We read each law on the legislature's or regulator's own site, or an archived copy where the live site would not load, and confirmed dollar thresholds and dates from that text wherever it was available.
- The survey covers laws aimed at commercial or sales-based financing. It does not cover general usury statutes, consumer-lending laws or court decisions.
- Some details could not be confirmed from primary text, including parts of Vermont's law and the status of bills in New Jersey and Illinois; they are left out of the findings.
- Laws change. Check the linked source before relying on a row. Nothing here is legal advice.
Questions and answers
Which states regulate merchant cash advances?
As of October 9, 2026, 11 states have a commercial financing law in force that reaches merchant cash advances: California, Connecticut, Florida, Georgia, Kansas, Louisiana, Missouri, New York, Texas, Utah, Virginia. Vermont has enacted one that takes effect later.
Do state MCA disclosure laws apply to advances over $500,000?
Mostly not. 7 of the 11 laws in force cover only deals of $500,000 or less. The ones that reach larger deals are Louisiana (no dollar cap); New York (up to $2.5 million); Texas (under $1 million); Utah (up to $1 million).
Do these laws cap what a merchant cash advance can cost?
No. They require disclosures and, in some states, registration and limits on terms such as confessions of judgment. None sets a maximum price.
Sources
- California: Cal. Fin. Code §§22800-22807. leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=FIN&d
- Connecticut: Conn. Gen. Stat. §§36a-861 to 36a-872. web.archive.org/web/20251228045420/https://www.cga.ct.gov/current/pub/
- Florida: Fla. Stat. §§559.961-559.9615 (Part XIII of ch. 559). leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_Str
- Georgia: O.C.G.A. §10-1-393.18. codes.findlaw.com/ga/title-10-commerce-and-trade/ga-code-sect-10-1-393
- Kansas: 2024 Kan. Sess. Laws, SB 345 (K.S.A. section numbers not verified). kslegislature.gov/li_2024/b2023_24/measures/documents/sb345_enrolled.p
- Louisiana: La. R.S. 9:3137.10. web.archive.org/web/20260422212333/https://legis.la.gov/legis/Law.aspx
- Missouri: RSMo §427.300. web.archive.org/web/20260617065627/https://revisor.mo.gov/main/OneSect
- New York: N.Y. Fin. Serv. Law §§801-812. nysenate.gov/legislation/laws/FIS/801
- Texas: Tex. Fin. Code ch. 398. capitol.texas.gov/tlodocs/89R/billtext/html/HB00700F.htm
- Utah: Utah Code §§7-27-101 to 7-27-301. codes.findlaw.com/ut/title-7-financial-institutions-act/ut-code-sect-7
- Vermont: 8 V.S.A. §2247 (new) per secondary sources. web.archive.org/web/20260804120240/https://legislature.vermont.gov/bil
- Virginia: Va. Code §§6.2-2228 to 6.2-2238. law.lis.virginia.gov/vacodefull/title6.2/chapter22.1/
About this study
A survey of state statutes and regulations, built from the legislatures' and regulators' own pages (archived copies where a state site would not load), with law-firm summaries used only as a second check. It covers laws written for commercial or sales-based financing, not general usury or consumer-lending laws.
How to cite: Hamilton & Merchant Research, “State Merchant Cash Advance Laws,” October 9, 2026, https://hamiltonmerchant.com/research/state-mca-laws/
Download the data (CSV) · Free to reuse with attribution under CC BY 4.0. Found an error? Email [email protected] and we will correct it and date the change.