Texas HB 700 Registration Deadline: December 31, 2026

House Bill 700, passed in 2025, created Chapter 398 of the Texas Finance Code, the state's law for commercial sales-based financing, its term for merchant cash advances and similar deals. Its registration date arrives at the end of this year. This page sets out what the law asks of funders and brokers, read from the enrolled bill, the codified chapter, the Texas Register and the regulator's own page, and what it means for an owner already carrying one.

What is the December 31, 2026 deadline?

Section 2(a) of the bill reads: “Not later than December 31, 2026, a person engaging in business as a commercial sales-based financing broker or provider on the effective date of this Act must register under Section 398.053, Finance Code, as added by this Act.” The effective date was September 1, 2025. Filing happens in the Nationwide Multistate Licensing System, known as NMLS, which has taken these applications since September 1, 2026.

That date is written for companies already operating when the law began. Anyone who entered the Texas market later falls under Section 398.053(a), under which a person may not act as a provider or broker “unless, before conducting business, the person registers.” The statute makes a registration effective on the commissioner's receipt of a completed form and the fee. The OCCC's page puts it this way: “A registration becomes active upon receipt of the required initial registration fee.”

Who has to register?

The chapter uses two terms. A provider gives the financing or extends a specific offer of it. A broker, for pay or the expectation of pay, obtains the financing for a recipient or offers to. Section 398.002 extends to anyone doing this over the Internet for a Texas recipient, “regardless of whether the provider or broker maintains a physical presence in this state.”

The exemptions in Section 398.003 are:

• banks, credit unions, bank holding companies, and their subsidiaries and affiliates;
• technology service providers to those institutions, if they hold no interest in the financing;
• lenders regulated under the Farm Credit Act of 1971;
• financing secured by real property, and leases;
• agreements of $50,000 or more with vehicle dealers or vehicle rental companies;
• financing tied to products or services the company or its affiliate makes, licenses or distributes.

The list has no exception for small volume. Virginia, Missouri, Kansas, Georgia and Florida each carve out funders with no more than five deals, and Texas does not, a difference Venable LLP also noted in March 2026. The OCCC will not decide the question for a company: its page says staff “are unable to determine or advise which license or registration a business should apply for.”

What does registration cost and require?

Fees cannot be refunded or transferred, and from July 1, 2027 the OCCC may adjust the initial and annual amounts for inflation. Section 398.053(d) sets the contents of the form: the company's name and trade name, its principal office, a Texas agent for service of process, and any judgment, memorandum of understanding, cease and desist order or conviction tied to a violation of law, fraud, breach of trust or money laundering. That last item also covers anyone who controls the company and its directors and officers.

The OCCC's checklist adds practical items: a compliance contact and a complaint contact in the NMLS company form, a Texas registered agent with no P.O. box, and any direct owner of 10 percent or more named as a qualifying individual. Registrations cannot be transferred if a new entity takes over. Changed information has its own clock: the statute allows 90 days to update the registration statement, while the rules call for certain events, such as civil or regulatory actions and data breaches, to be reported within 30 days.

Two renewal dates: what each source says

The statute's date and the regulator's window do not match. Under the OCCC's page, a registration not renewed by midnight on December 31 expires, can be reinstated until 11:59 p.m. on February 28, and after that is marked “Terminated Failed-To Renew.” Under the statute, a renewal filed on January 31 would be on time. When the Finance Commission adopted its rules, it described NMLS as offering a renewal period “(typically two months)” and declined to add a grace period for that reason.

We found no statement from the OCCC explaining the difference, and none saying how a registration first filed in the last weeks of 2026 is treated in that same window. As non-lawyers, we do not say which date controls. A registrant should ask the OCCC or its own attorney. Renewing by the earlier date leaves nothing to argue about.

What does Chapter 398 mean if you already carry an advance?

There is nothing for you to file. These dates belong to the funder and the broker. What the chapter gives an owner is a set of written facts, some limits on contract terms, and a regulator to complain to.

• Disclosures before signing. For a specific offer below $1 million, Section 398.051 lists eleven items, among them the cash you actually receive, the cost in dollars, what you repay in total, how long repayment should take, other possible fees, charges on early payoff, collateral, and any broker pay from the provider. The recipient signs them before the application is finalized. Under 7 TAC §86.310 they must be in writing at or before the offer, and a provider who learns of an error must promptly send corrected ones.
• Renewals that clear an earlier balance. When a new deal requires it, the statement must also split out the prepayment charges and unforgiven finance charges inside that payoff, and say in dollars how much less cash reaches you.
• Confessions of judgment. Section 398.055 calls a contract with such a clause, or anything similar, “void and unenforceable,” and the rules list it among the prohibited acts. How that applies to paper signed before the law began is one for your attorney.
• Automatic withdrawals. Section 398.056 says a provider or broker may not set up automatic withdrawals from a deposit account without a perfected security interest ranking ahead of every other claim. Under 7 TAC §86.313, debits are automatic “if they are authorized in advance to occur more than one time or on a recurring basis,” more than one prewritten check counts as a mechanism, and the interest required is one in all of the recipient's accounts receivable. A provider also may not direct a third party to complete such a debit.
• Listed unfair practices. 7 TAC §86.312 names fifteen, including claiming a legal right the person does not have, stating there is no personal guarantee when that is inaccurate, charging fees not disclosed and contracted for, filing a lien without an authenticated security agreement, and debiting an account without authorization. It also covers telling a recipient's customer to redirect payments that were scheduled to go to someone else, unless that person consented or the debt was validly assigned to the provider. For the wider picture, see our post on funders writing to customers.
• A notice in the contract. Under §86.310(d) a contract must tell the recipient how to reach the OCCC with a complaint that cannot be resolved with the provider: (800) 538-1579, occc.texas.gov.

What Chapter 398 does not do

• It sets no price. Section 398.005(d) forbids the Finance Commission to put a ceiling on the rate, the finance charge or any fee.
• It gives an owner no lawsuit of its own. Section 398.102 rules out a private right of action under this chapter. The OCCC enforces it, at $10,000 for each violation under Section 398.101, and under the rules it can also issue injunctions and suspend or revoke a registration. Whether other law gives an owner a claim is for an attorney to say.
• It does not call an advance a loan. It regulates the product under its own name. See Section 398.004 below.
• It does not say a contract with an unregistered funder is unenforceable. We found no such section in the chapter or the rules. California's AB 2116 takes that step for deals from 2028; Texas did not.
• It does not say whether it reaches advances signed before September 1, 2025. The bill has no clause on this. Bring the date on your contract to your attorney.
• It leaves out several requests the Commission heard. The adoption notice records requests to require an ability-to-repay analysis, a cooling-off period, a model disclosure form and limits on stacking. The Commission did not add them, though it noted the automatic-debit rule partly addresses stacking.

None of this changes what a contract requires of you. Falling behind carries real risks: you can be sued, fees can be added, your credit can suffer, and a personal guarantee can make you answer for it yourself. Before you change how you pay, have a Texas attorney read your contract.

How can you check whether a funder or broker has registered?

The OCCC keeps this registration in NMLS, where, in the agency's words, “your registration is considered your Company License.” NMLS has a public lookup, NMLS Consumer Access. The OCCC's own Licensee Search offered no category for this registration when we looked on November 5, 2026. We did not run searches in NMLS Consumer Access for this page, so we cannot say how complete its listing is or how many companies have registered.

A name that does not appear settles nothing by itself. The company may be exempt, may have registered under a different legal name, or may still be inside its time until December 31.

Section 398.004 and the word purchase

Merchant cash advance contracts usually describe themselves as purchases of future receipts. Elsewhere in the Texas Finance Code, Section 306.103 says a discount in an account purchase transaction “is not interest,” and that calling the deal a purchase is the last word for that chapter's purposes. Section 398.004 takes this product out of that section: a sales-based financing transaction “is not a form of an account purchase transaction for purposes of Section 306.103, regardless of the principal amount of the advance.”

That removes one statutory argument. It does not decide whether any advance is a loan. Other states went the other way, and our state law study lists them. Courts still read the contract, as the court decisions study shows, and only a Texas attorney can say what Section 398.004 changes in a given dispute.

Texas and the other states that register funders

California and Vermont have licensing laws that start later: California on July 1, 2028 and Vermont on July 1, 2027. New York, the state whose law many of the court decisions apply, requires disclosures but no registration. The full state table has the citations.

What this means for a Texas stack above $500,000

At this size the $1 million line is the one to watch. The statute speaks of “a specific offer,” which reads as measuring each offer on its own rather than the stack as a whole, and a single offer of $1 million or more falls outside Section 398.051. The automatic-debit section, the confession-of-judgment section and the OCCC notice carry no such limit in their text. If your advances are recent, the signed disclosures are worth finding, because they state the disbursement, the finance charge and the repayment amount in one place. Our MCA cost calculator and stack model put those numbers side by side.

The paths open at this level, each with its own risks and costs, are laid out in our guide to large balances. We are not lawyers. We send owners to a settlement company and are paid a referral fee for it. The first conversation with Hamilton & Merchant is free: (407) 993-1416.

Method and limits

• We read the enrolled bill, the codified chapter, the bill history, the Texas Register proposal and adoption, and the OCCC's page on November 5, 2026. The bill and the codified text match on the sections quoted here.
• Rules adopted without change were not reprinted in the July 3, 2026 Register, so §§86.306 and 86.307 are quoted from the March 6, 2026 proposal.
• We did not search the OCCC's enforcement records, so this page says nothing about actions taken under the chapter.
• Laws and agency pages change, and the OCCC may yet explain or change its renewal dates. Read the current source yourself before you act on this.
• This page is general information about the law, not advice about your contract, which needs an attorney who has read it.

Questions and answers

Sources

1. Texas Legislature, H.B. 700, 89th Leg., R.S., enrolled version. capitol.texas.gov
2. Texas Finance Code, Chapter 398, Commercial Sales-Based Financing (codified). statutes.capitol.texas.gov
3. Texas Legislature, H.B. 700 bill history. capitol.texas.gov
4. Texas Register, adopted 7 TAC §§86.301 to 86.322, effective July 9, 2026. sos.state.tx.us
5. Texas Register, proposed 7 TAC §§86.301 to 86.322 (51 TexReg 1355), March 6, 2026. sos.state.tx.us
6. Office of Consumer Credit Commissioner, Commercial Sales Based Finance. occc.texas.gov
7. Office of Consumer Credit Commissioner, Company Registration Checklist, updated Aug. 18, 2026. occc.texas.gov (PDF)
8. Texas Finance Code §306.103 (FindLaw copy, current to Jan. 1, 2026). codes.findlaw.com
9. Venable LLP, State Commercial Financing Disclosure Laws, March 2, 2026 (secondary). venable.com