For decades, Truth in Lending (TILA) disclosures applied to consumer credit, not business financing. That line is gone at the state level. Since California's SB 1235 (effective December 2022), a growing cohort of states has enacted commercial financing disclosure laws (CFDLs) that require providers of business-purpose financing to give standardized cost disclosures at the time an offer is extended.
As of 2026, California, New York, Utah, Virginia, Florida, Georgia, Connecticut, Kansas, and Missouri have some form of the law in effect or imminent, and several more states have bills in committee. If you offer commercial loans, merchant cash advances, factoring, or lease financing to businesses, you are likely in scope somewhere.
What Triggers Disclosure
Coverage is broad. Each state's law defines a provider as a person or entity that extends a specific offer of commercial financing, including:
- Closed-end commercial loans and open-end credit plans
- Factoring and accounts-receivable purchase transactions
- Sales-based financing (merchant cash advances)
- Lease financing and asset-based lending
Exempt providers typically include federally and state-chartered banks, savings and loan associations, credit unions, and licensed industrial banks acting in that capacity. Non-bank fintechs, independent MCA funders, and private credit platforms are the primary targets.
The trigger is a specific offer — a quote with an amount, price, and repayment terms — not a marketing solicitation. At offer, the provider must deliver a standardized disclosure before consummation.
What Must Be Disclosed
Modeled explicitly on TILA, most states require:
- Total amount of financing provided and total funds disbursed after fees withheld
- Total repayment amount and number, amount, and frequency of payments
- Estimated APR or annualized cost calculated under a regulation-specified method, even for products that do not charge interest (like MCAs, where the APR is derived from the purchase price and expected remittance)
- Fees itemized, including origination, servicing, and prepayment or discount costs
- Prepayment terms — whether a discount applies and how it is calculated
New York's DFS regulation and California's implementing regulations go further, prescribing formatting, font size, and a signature line. Using a generic term sheet that buries the APR on page three does not satisfy either.
The 2026 Compliance Map
No two states are identical. Key variations:
- Thresholds. Some states exempt transactions over a threshold (e.g., $500,000 in New York for certain products) while California applies to offers of $500,000 or less.
- Broker obligations. Several states impose disclosure duties on brokers who arrange financing, not just funders.
- Filing and registration. Florida and Georgia layer a registration or notification requirement on top of disclosure.
- Enforcement. Violations can be enforced by the state attorney general or financial regulator, with civil penalties per violation and, in some states, a private right of action.
The CFPB's March 2025 preemption determination confirmed that TILA does not preempt these state laws because TILA applies only to consumer credit — leaving the state patchwork as the operative regime.
How to Operationalize
- Build a disclosure engine by transaction type, not state. Map each product (MCA, factoring, term loan) to the APR or cost-calculation method each state's regulation prescribes. A single miscalculation method applied nationally will fail in at least one state.
- Version your forms. Regulators update implementing regulations without amending the statute. Keep form versions dated and tied to the regulation version.
- Train brokers. If you fund through ISOs or brokers, contractually require use of your compliant disclosures and audit a sample monthly.
- Track in your books. Disclosed fees that are withheld from disbursement need distinct postings —
Income:Fees:OriginationversusAssets:Receivable:Factoring— so the funded amount reconciles to the disclosure total.
Simplify Your Financial Management
Commercial financing disclosure is TILA-like complexity without TILA's uniform federal rulebook — a multi-state matrix that changes yearly. Beancount.io keeps fee, APR, and disbursement postings explicit and version-controlled, so every funded deal ties to the disclosure you delivered. Get started for free and make compliance part of the closing entry.