State regulation of commercial financing disclosures continues to expand and mature. Although legislative activity slowed in 2025 compared with prior years, a few states enacted or refined disclosure regimes. Continued enforcement activity underscores the need for ongoing compliance attention by providers and brokers operating across multiple jurisdictions.
In 2025, Texas enacted House Bill 700 (HB 700), a commercial financing disclosure law narrowly focused on sales-based financing, also referred to as merchant cash advance. Texas joins Connecticut and Virginia in requiring transaction-level disclosures specifically for this product. Under HB 700, providers must deliver a written disclosure to the financing recipient that includes, among other things, the total amount financed, the finance charge, the total repayment amount, all potential fees, and the repayment terms. The law became effective in September 2025. The law is administered and enforced by the Texas Office of Consumer Credit Commissioner (OCCC). Additionally, providers and brokers of sales-based financing must register with the OCCC by December 31, 2026, and renew that registration annually thereafter. Unlike the Connecticut and Virginia laws, the Texas statute does not include a de minimis exemption for low-volume providers.
The Texas law contains several notable limitations and exemptions. It expressly prohibits the Texas Finance Commission (Finance Commission) from adopting a maximum APR, finance charge, or fee for commercial sales-based financing. Exemptions apply to banks, sales-based financing secured by real property, financing extended in connection with the provider’s sale of its own goods or services, and technology service providers to exempt entities. While HB 700 is not enforceable by private litigants, the OCCC may seek civil penalties of up to $10,000 per violation, and the law directs the Finance Commission to adopt rules identifying unlawful, unfair, deceptive, or abusive acts or practices.
California, which enacted a commercial financing disclosure law in 2018, enacted Senate Bill 362 (SB 362) to amend its law to clarify how pricing must be presented. SB 362 requires providers to express interest as an annual percentage rate (APR) and prohibits the use of the terms “interest” or “rate” in a manner that could reasonably mislead recipients. The legislation reflects concern with pricing disclosures that describe “simple interest” or otherwise quote non-annualized rates that materially diverge from APR. SB 362 also requires providers to disclose the APR whenever they state a charge, pricing metric, or financing amount to a prospective recipient.
California regulators are actively enforcing these requirements. In November 2025, the California Department of Financial Protection and Innovation (DFPI) entered into a consent order with a financial services company that, among other things, leased equipment to California businesses without providing required commercial financing disclosures. Providers should also remain mindful of California’s annual reporting obligation. California requires each provider to submit a report covering commercial financing transactions occurring during the previous calendar year by March 15th of the following year.
Looking ahead, additional states continue to evaluate commercial financing disclosure legislation. At this time, ten states, specifically California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah, and Virginia, require some form of disclosure, and proposed legislation is pending elsewhere. For example, in New Jersey, Senate Bill 1760 would impose detailed disclosure requirements across multiple financing products, including sales-based, closed-end, open-end, and factoring transactions, similar to the commercial financing disclosure requirements in other states. The bill would authorize civil penalties of up to $10,000 for willful violations. There are several exemptions in the bill, including for providers that do not make more than five commercial financing transactions in New Jersey within a 12-month period and transactions that exceed $500,000.
Key Takeaways. Providers and brokers should continue to review disclosure templates, sales processes, and marketing materials to ensure state-specific compliance. Registration and reporting obligations—such as those in Texas and California—present additional operational considerations. As states continue to refine and expand commercial financing disclosure regimes, companies may benefit from developing scalable compliance frameworks capable of accommodating jurisdiction-specific requirements and evolving regulatory expectations.