New York's commercial financing disclosure law went into effect in 2024 with a multi-year ramp of regulatory clarifications. By 2026, it's the most consequential state-level regulation in MCA. Every funder doing business with NY merchants — and every ISO submitting NY paper — needs to understand the rules.
Who's covered
The law applies to commercial financing offers of $2.5 million or less extended to recipients located in New York. It covers MCA, factoring, sales-based financing, and traditional commercial loans. Banks and certain other lenders are exempt.
What must be disclosed
At the time a specific offer is extended, the provider must disclose, in a standardized format:
- ▸Total amount of financing
- ▸Disbursement amount (after fees)
- ▸Finance charge
- ▸Annual percentage rate (APR)
- ▸Total repayment amount
- ▸Term
- ▸Payment amounts and frequency
- ▸Description of any prepayment policies
- ▸Description of collateral requirements
The APR question
MCA is structured as a purchase of future receivables, not a loan, and historically resisted APR disclosure. New York's rule requires APR calculation using a defined methodology. Many funders comply by disclosing an estimated APR with assumptions about the merchant's revenue pattern.
For brokers, this means the APR on a typical MCA — when calculated under the NY methodology — often appears in triple digits. Be ready for that conversation with the merchant.
ISO operational impact
- ▸Use only funder-approved disclosure documents at offer time
- ▸Don't quote rates verbally before disclosure has been delivered
- ▸Document delivery timing — disclosure must precede the merchant's signing
- ▸Train your team on the APR conversation — it will come up
Other states with similar laws
California (SB 1235), Virginia, Utah, Connecticut, Georgia, and Florida have all passed or proposed similar disclosure laws. The rules differ in specifics. If you're funding multi-state, you need to know each one.
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