Of the states that require disclosure on merchant cash advances, the three most established are California (SB 1235 + SB 362), New York (S5470B), and Florida (HB 1353). California and New York both mandate APR — the annualized cost you can compare against a bank loan. Florida requires only dollar-cost disclosure, not APR. A growing list of other states (Georgia, Texas, Illinois, and more) have newer laws, but most states still have none — there, you must calculate costs yourself before signing.
TL;DR
| California | New York | Florida | |
|---|---|---|---|
| Law | SB 1235 + SB 362 | S5470B (CFDL) | HB 1353 |
| In force | Dec 9, 2022 (SB 362: Jan 1, 2026) | Aug 1, 2023 | Jan 1, 2024 |
| Coverage threshold | $500,000 or less | $2.5 million or less | $500,000 or less |
| APR required? | Yes | Yes | No |
| Dollar cost required? | Yes | Yes | Yes |
| Broker comp disclosure? | Yes | Yes | Partial |
| Enforcement agency | DFPI | NY DFS | FL Attorney General |
| Penalty per violation | Up to $2,500 (non-willful); higher for willful | $2,000 / $10,000 (willful) | $500 / $1,000 (after notice) |
| Aggregate cap | None stated | None stated | $20,000 / $50,000 (after notice) |
| Private right of action | No | No | No |
Three deeply detailed laws — with a growing list of newer ones behind them. Here is what California, New York, and Florida each require, how they differ, and what it means for your next MCA.
The Single Most Important Difference: APR
The biggest practical gap between these three laws is whether your state requires providers to state an APR.
Factor rates are deliberately opaque. A “1.30 factor rate” sounds like 30% — but on a $100,000 advance repaid over 6 months via daily ACH, the true amortized APR is closer to 150%. On a 3-month repayment, it climbs past 250%. Without an APR figure on the disclosure, most borrowers have no way to compare an MCA offer against a business line of credit or term loan on the same measuring stick.
California requires APR before you sign. New York requires APR before you sign. Florida does not require APR at all.
If you are a Florida business, the law gives you the dollar cost but not the annualized rate. Use the MCA calculator to convert any factor rate into both a simple annualized cost and an estimated true APR before you compare offers.
California: SB 1235 + SB 362 (The Strictest Standard)
California was the first state in the country to require consumer-style APR disclosure for commercial financing, including MCAs. The framework has two components.
SB 1235 — Core Disclosure (Effective December 9, 2022)
Coverage: Any commercial financing of $500,000 or less to a business principally directed or managed from California. Applies to any provider regardless of where they are headquartered — a New York MCA funder offering an advance to a Sacramento business must comply with California law.
Exemptions: Federally chartered banks and credit unions, real-property-secured financing, transactions above $500,000, and providers making five or fewer California transactions per year.
Required disclosures (before you sign):
| Disclosure | What it covers |
|---|---|
| Total funding amount | Advance amount and net funds you receive after fees |
| Total dollar cost | The full fee in plain dollars |
| Estimated APR | Annualized cost per a DFPI-approved method |
| Payment amount and frequency | Holdback percentage and estimated daily/weekly payment |
| Term | Estimated repayment period |
| Prepayment policy | Whether early payoff reduces your cost and by how much |
The disclosure must be delivered in writing before you sign the agreement. A verbal summary from a sales rep does not satisfy this requirement. You must receive a written document with your signature acknowledging receipt.
Broker compensation: SB 1235 requires providers to disclose how brokers are compensated if a third party is involved in arranging or marketing the financing. This disclosure must happen at the time of the specific offer.
Enforcement: California DFPI. Violations are enforceable under the California Consumer Financial Protection Law (CCFPL). DFPI can issue desist-and-refrain orders, impose civil money penalties (up to $2,500 per non-willful violation; higher for willful violations), and order restitution. There is no direct private right of action, though violations may support a California Unfair Competition Law (UCL) claim.
SB 362 — Continuous APR Disclosure During Sales (Effective January 1, 2026)
SB 362 extends SB 1235 beyond the contract stage. Providers must now disclose the APR every time they mention any pricing figure during the application or sales process — including verbal conversations, emails, text messages, and application portals.
If a sales representative tells you “the factor rate is 1.25” or “the holdback is 10%,” they must in that same communication also state the APR. Providers are prohibited from using the words “interest rate,” “simple interest,” or “X% fee rate” in ways that could mislead you into thinking you are seeing an annual cost when you are not.
What this means in practice: California borrowers should expect to receive APR figures in every substantive sales communication. If you receive a California MCA offer where the representative discusses pricing without stating an APR, that provider is violating state law.
New York: S5470B / Commercial Finance Disclosure Law (The Highest Penalties)
New York’s approach mirrors California’s in requiring APR disclosure, but applies to a larger deal size and carries the highest civil penalties of the three states.
What the Law Covers
Coverage: Any commercial financing of $2.5 million or less to a New York business (principally directed or managed from New York). The $2.5 million threshold is significantly higher than California’s $500,000 or Florida’s $500,000, meaning the law catches many mid-market deals that would be exempt in other states.
The law was enacted as Senate Bill S5470-B (signed December 23, 2020) and became effective January 1, 2022, but enforcement did not begin until the DFS finalized implementing regulations as 23 NYCRR 600 — mandatory compliance began August 1, 2023.
Exemptions: Federally chartered banks and their majority-owned subsidiaries, transactions above $2.5 million, real-property-secured financing, providers making five or fewer New York transactions per year, and lenders under the federal Farm Credit Act.
Required Disclosures
For merchant cash advances (classified under 23 NYCRR 600 as “sales-based financing”), providers must give you a signed, written 10-row disclosure table that includes:
| Field | What it means |
|---|---|
| Funding provided | Advance amount and net amount you receive |
| Estimated APR | Calculated per Regulation Z Appendix J |
| Finance charge | Total dollar cost of the advance |
| Estimated total payment | Full amount you will repay |
| Estimated payment | Estimated daily or weekly holdback |
| Payment terms | The holdback percentage and frequency |
| Estimated term | Estimated repayment period based on your historical sales |
| Prepayment | Cost or savings if you pay early |
| Collateral | UCC-1 financing statement or other security |
| Avoidable fees | Any fees you can avoid by taking specific actions |
Because MCA repayment floats with your actual sales, the APR and term figures are “estimated” — they use your historical sales average. The disclosure must include a note explaining that actual APR and term may vary based on your future sales volume.
Broker compensation: New York’s law explicitly requires providers to inform recipients in writing of how and by whom any broker involved in the transaction will be compensated.
Penalties: New York has the strictest penalty structure of the three states.
| Violation type | Penalty |
|---|---|
| Standard violation | Up to $2,000 per violation |
| Willful violation | Up to $10,000 per violation |
There is no aggregate cap stated in the statute, and there is no private right of action — only the NY DFS can bring enforcement actions.
Confessions of judgment ban (2019): Separate from the disclosure law, New York banned confessions of judgment against out-of-state business owners in August 2019 (S06395). MCA providers had used COJs to obtain near-instant judgments against borrowers nationwide without notice or court appearance. If your MCA agreement includes a confession-of-judgment clause and you are an out-of-state borrower, that clause is unenforceable under New York law.
Florida: HB 1353 (Dollar Cost, No APR)
Florida enacted commercial financing disclosures with HB 1353 — but it stops short of requiring APR.
What the Law Covers
Coverage: Any commercial financing of $500,000 or less consummated with a Florida business. The law explicitly covers MCAs, commercial loans, and accounts receivable purchase agreements.
Governor Ron DeSantis signed HB 1353 on June 26, 2023, and the law is codified as part XIII of Chapter 559 of the Florida Statutes. Mandatory disclosures took effect January 1, 2024. Unlike some lending regimes, Florida does not impose a provider or broker licensing requirement for merchant cash advances — the law is a disclosure-and-conduct statute, not a licensing one.
Exemptions: Federally insured depository institutions and their affiliates, real-property-secured financing, transactions above $500,000, finance leases, and providers making five or fewer Florida transactions per year.
Required Disclosures
| Required | Not required |
|---|---|
| Total financing amount | APR |
| Disbursement amount (net funds received) | — |
| Total amount to be repaid | — |
| Total dollar cost of financing | — |
| Payment amount, frequency, and method | — |
| How variable payments are calculated | — |
| Prepayment options and any penalties | — |
The absence of an APR requirement is the defining gap. You will receive a document showing you the total dollar cost — for example, that a $50,000 advance carries a $12,500 fee — but you will not be told that this translates to approximately 50–55% APR if repaid over 6 months.
Broker compensation: HB 1353 does not require a standalone broker-compensation disclosure the way California and New York do. Instead, it regulates broker conduct directly — most notably by prohibiting brokers from collecting advance fees before a transaction is completed. That is why broker compensation is marked “Partial” in the comparison below: the law constrains brokers but does not force a written disclosure of how they are paid.
Enforcement — and its limits:
Florida’s penalty structure is the weakest of the three states:
| Situation | Penalty | Aggregate cap |
|---|---|---|
| Standard violation | $500 per violation | $20,000 |
| After written AG notice | $1,000 per violation | $50,000 |
Only the Florida Attorney General can enforce HB 1353. There is no private right of action — a borrower cannot sue a provider who failed to give the required disclosure. Enforcement depends on the AG’s office opening a case, which sets a high bar for individual businesses experiencing violations.
Side-by-Side: The Complete Picture
| Feature | California | New York | Florida |
|---|---|---|---|
| Law | SB 1235 + SB 362 | S5470B / 23 NYCRR 600 | HB 1353 |
| Signed | Sept 2018 (regs Dec 2022) | Dec 23, 2020 | June 26, 2023 |
| Enforceable since | Dec 9, 2022 | Aug 1, 2023 | Jan 1, 2024 |
| Products covered | MCAs, term loans, LOC, factoring, leases | MCAs, term loans, LOC, factoring, sales-based financing | MCAs, loans, accounts receivable agreements |
| Max deal size covered | $500,000 | $2,500,000 | $500,000 |
| APR required | Yes (SB 362: at every pricing mention) | Yes (estimated, per Reg Z) | No |
| Dollar cost required | Yes | Yes | Yes |
| Broker comp disclosed | Yes | Yes | Partial |
| Enforcing agency | DFPI | NY DFS | FL AG |
| Penalty (non-willful) | Up to $2,500/violation | Up to $2,000/violation | $500/violation |
| Penalty (willful) | Higher per CCFPL | Up to $10,000/violation | $1,000/violation (after notice) |
| Aggregate penalty cap | None stated | None stated | $20,000 / $50,000 |
| Private right of action | No | No | No |
| License required | No (disclosure only) | No (disclosure only) | No (disclosure & broker conduct only) |
| Notable additional protection | SB 362 continuous APR during sales | COJ ban (2019) for out-of-state borrowers | None |
| Out-of-state lender bound? | Yes (business in CA triggers) | Yes (business in NY triggers) | Yes (business in FL triggers) |
What If Your State Has No Disclosure Law?
Roughly 40 states have no commercial financing disclosure requirement as of mid-2026. (Several states have passed laws since this guide originally covered only CA, NY, and FL: Georgia enacted SB 90 effective January 1, 2024; Texas enacted HB 700 effective September 1, 2025; Illinois, Utah, Virginia, and New Jersey also have disclosure requirements. See our Georgia MCA guide for how SB 90 works.) If your business is in Ohio, Michigan, Pennsylvania, or most of the Midwest and South, an MCA provider can legally offer you an advance without disclosing the APR, total cost, or any standardized cost figure. The only required document is the underlying contract — and MCA contracts are notoriously dense.
What you can do in any state:
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Calculate costs before you sign. Use the MCA calculator to enter the advance amount, factor rate, and expected holdback percentage. The calculator shows total repayment, simple annualized cost, and estimated true APR.
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Ask for the factor rate and holdback in writing. Any reputable lender will give you both before you sign. Holdback percentage determines how fast you repay — and therefore how high the effective APR climbs.
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Request a disclosure even if not legally required. Tell the provider: “Give me a written breakdown of the total cost, total repayment, and estimated APR before I sign.” If they refuse, that is a warning sign about how they will treat you after funding.
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Compare offers using total repayment, not factor rate alone. A 1.28 factor rate with a 15% holdback repaid over 5 months costs more than a 1.30 factor rate with a 10% holdback repaid over 8 months — because the IRR is higher when repayment is faster.
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Check which of the 24 providers in our directory serve your state. All directory providers have verified factor-rate ranges, advance limits, and minimum requirements you can compare before applying.
The Bottom Line
California’s SB 1235 and SB 362 set the highest transparency standard — they require APR before and during the sales conversation, and mandate broker compensation disclosure. New York’s S5470B matches California on APR and coverage, carries the highest penalties, and adds the COJ protection for out-of-state borrowers. Florida’s HB 1353 gets partial credit — dollar-cost disclosure is a real improvement over nothing — but the absence of APR leaves borrowers unable to do a fair apples-to-apples cost comparison without calculating it themselves.
If you are a California or New York business and an MCA provider hasn’t given you a written APR disclosure before asking you to sign, don’t sign. They are violating state law, and that behavior tells you something about their standards throughout the relationship.
Wherever you are, use the MCA calculator to verify the cost of any offer before you commit.
Sources: California SB 1235 (2018) and SB 362 (2025), DFPI implementing regulations (effective December 9, 2022); New York Financial Services Law Article 8 (S5470B, 2020), 23 NYCRR 600 (effective August 1, 2023); Florida HB 1353 (2023, effective January 1, 2024). Penalty structures: NY Financial Services Law §812; FL HB 1353 §501.993; CA CCFPL §90014. Reviewed by MCA Guide Editorial Team, June 2026.