California MCA Disclosure Law: What Funders Must Show You

Q: What has to be on the disclosure page in California?

A separate page, headed OFFER SUMMARY in bold, with nine rows in a fixed order. One row is an estimated APR. No page like that in your packet means the funder skipped it. The law is SB 1235, signed September 30, 2018. It took hold when the regulator, the DFPI, finished its rules. Those took effect December 9, 2022. A funder trade group sued to block them and lost. The Ninth Circuit upheld the rules on April 15, 2025. The statute itself requires six things: the funds provided, the total dollar cost, the term or estimated term, how and how often you pay, the prepayment policy, and the cost “expressed as an annualized rate.” That last item was set to expire January 1, 2024. SB 33 made it permanent. For a cash advance (the rules call it “sales-based financing”) the regulation fixes the rows, in this order: It must be its own document, not a clause inside the contract. The heading is OFFER SUMMARY in bold, followed by a few words naming the product. Numbers are written as numerals, in 12-to-14-point type for the label and amount columns. The law covers offers of $500,000 or less. Some providers are exempt: banks and credit unions, Farm Credit lenders, deals secured by real estate, some

One separate page, headed OFFER SUMMARY. It shows the cash you get, the dollar cost, the total you pay back, the estimated term, and an estimated APR. You should have it the moment a specific offer is quoted. You sign it before the money moves. If you never got one, the state regulator has asked to hear about it.

This guide is general education, not legal, financial, or tax advice; what a missing or wrong disclosure means for your specific contract is a question for a California lawyer.

What has to be on the disclosure page in California?

A separate page, headed OFFER SUMMARY in bold, with nine rows in a fixed order. One row is an estimated APR. No page like that in your packet means the funder skipped it.

The law is SB 1235, signed September 30, 2018. It took hold when the regulator, the DFPI, finished its rules. Those took effect December 9, 2022. A funder trade group sued to block them and lost. The Ninth Circuit upheld the rules on April 15, 2025. The statute itself requires six things: the funds provided, the total dollar cost, the term or estimated term, how and how often you pay, the prepayment policy, and the cost “expressed as an annualized rate.” That last item was set to expire January 1, 2024. SB 33 made it permanent.

For a cash advance (the rules call it “sales-based financing”) the regulation fixes the rows, in this order:

It must be its own document, not a clause inside the contract. The heading is OFFER SUMMARY in bold, followed by a few words naming the product. Numbers are written as numerals, in 12-to-14-point type for the label and amount columns. The law covers offers of $500,000 or less. Some providers are exempt: banks and credit unions, Farm Credit lenders, deals secured by real estate, some vehicle-dealer financing of $50,000 or more, and providers doing one California deal a year (or five or fewer on the side).

One related check. A separate law, SB 666, has barred certain fees since January 1, 2024. It covers financing of $500,000 or less to California small businesses (100 or fewer employees, $15 million or less in average yearly receipts over three years, with officers who live in California). Banned, with some exceptions: fees for paying by ACH (a fee for a bounced payment is still allowed), fees for a payoff statement, extra fees with no matching service beyond origination, most collateral-monitoring fees (allowed if you are more than 60 days late), and lien-filing fees above 150% of the real cost. That law gives a small business the right to sue for the fee, plus $500 to $2,500 and attorney fees.

Funding Provided — what actually lands in your account, after any deductions.
Estimated Annual Percentage Rate (APR) — the cost as a yearly rate.
Finance Charge — the dollar cost of the money.
Estimated Total Payment Amount — everything you are expected to pay back.
Estimated Payment — the daily or weekly pull.
Payment Terms — how the pull is figured and when it can change.
Estimated Term — how long the funder expects collection to take.
Prepayment (two rows) — whether paying early cuts the finance charge, and whether it adds fees.

The verdict

If your offer was $500,000 or less, came after December 9, 2022, from a non-bank funder, and there is no bold OFFER SUMMARY page with an APR row, something California requires is missing. Whether the law reached your deal is a question for DFPI or a lawyer.

When am I supposed to get it: before I sign, or after the money lands?

Before. The funder must disclose “at the time of extending a specific commercial financing offer” and get your signature on the page “before consummating” the deal. A page that shows up after funding is late.

A “specific offer” is any written message that states a payment or financing amount plus any rate, price, or cost. An email saying “$40,000 at 1.3, $413 a day” is an offer. So the summary is due with it. DFPI set that timing on purpose, earlier than the federal Truth in Lending rule. The point is that you can compare offers before you commit.

If terms change, the funder sends a new summary. You sign only the final one that matches the deal you close. E-signatures count. If a broker is pitching you, DFPI's rules say the broker must pass along the funder's summary, unaltered, before pitching a specific offer. In a DocuSign packet, look for the page with OFFER SUMMARY at the top. If you signed the contract first and the summary came later, or never, write down the dates.

Is a 1.3 factor rate the same as 30% interest? How do I read the APR line?

No. A 1.3 factor on $40,000 means you owe $52,000, however fast you pay, unless the Prepayment row or a written discount says otherwise. The APR row puts that $12,000 on a yearly scale so you can compare it with anything else. Our calculator puts a 1.3 factor repaid daily over about six months near 109% APR, not 30%.

Read the word estimated. The row must say APR “is the estimated cost of your financing expressed as a yearly rate,” and warn that “since your actual income may vary from our estimate, your effective APR may also vary.” The funder estimates your monthly sales, then estimates how long collection takes (the Estimated Term row). Stronger sales mean the same $12,000 leaves in fewer months, and the real APR goes up. By statute, the funder is not liable if the real APR differs from an estimate computed by the rules.

So the printed APR is a guess, and good months push the real number higher. Three rows drive it: Funding Provided, Estimated Total Payment Amount, and Estimated Term.

Same dollar cost, shorter term, higher APR. Every time.
The APR row must state the monthly sales figure the funder assumed. If that figure is lower than what you really bring in, expect the real APR to run higher than the printed one.

The verdict

The factor rate tells you the dollars; only the APR row tells you the speed, and speed is what makes an advance expensive.

Does the law apply if the funder is in New York (or online) and my business is in California?

Yes, if your business is “principally directed or managed from California.” The test is where you run your business. It is not where the funder sits.

The funder may rely on your written statement. It may also rely on the business address in your application. So a funder that sees a California business address on your application has what it needs to know the rule applies. The small-provider exemption counts deals “in California,” which again looks at your side. In August 2026, DFPI settled with a Houston, Texas company. DFPI said it had made loans to California businesses without the required page. The regulator reached a Texas company.

This does not settle which state's contract law governs a fight later. Some MCA contracts pick another state. NPR's March 2026 story told of a New York funder. Its contract, on page 9 of 21, named Connecticut. That clause is a separate question for a lawyer. The disclosure duty is about where you are.

Can a broker still quote me a “rate” or “interest” after January 1, 2026?

They can say the words. But the funder behind the quote cannot use “interest” or “rate” in a way “that could reasonably result in the recipient being misled,” and once a specific offer exists, every price the funder states must come with the APR, using the words “annual percentage rate” or “APR.” Whether a broker's own sales talk is covered is less clear; see the caveats below.

That is SB 362, signed October 6, 2025. It has been in force since January 1, 2026. The bill's own findings name the moves it targets: calling a non-annual rate “simple interest,” calling a daily or weekly rate an “interest rate,” and quoting an “X% fee rate” or “Y% factor rate” when those differ a lot from the APR. A true annual rate, fixed or floating over an index, is fine.

Two honest caveats. The duty sits on the “provider,” the company extending the offer. A funder that sends its offer through a broker still counts as the provider. And a separate DFPI rule makes the broker pass along the funder's Offer Summary, unaltered, before pitching a specific offer. But the statute does not say, in so many words, that a broker's own sales talk breaks the rule. And as of a December 2025 law-firm alert, DFPI had not written rules on what counts as deceptive. What you can do today: when you hear “your rate is 1.3, that's 30%,” ask “What's the APR?” If the answer is “we don't do APR,” note the date and the name.

The verdict

After January 1, 2026, a quote with a price but no APR is the thing this law was written to stop.

I never got a disclosure. What can I actually do about it?

File a complaint with the DFPI. Keep every page you were sent. Run the numbers so the complaint states the APR you were never shown. A complaint will not cancel your contract. But the form is online, and the regulator has asked for exactly this.

In an April 14, 2025 advisory, DFPI invited small businesses that “did not receive proper disclosures” on a cash advance to file. Its rules since October 1, 2023 also bar unfair, deceptive, or abusive practices in commercial financing. File online at dfpi.ca.gov/submit-a-complaint/. Or mail DFPI, Attn: Consumer Services, 651 Bannon Street, Suite 300, Sacramento, CA 95811. Or call 1-866-275-2677. Know the limits. DFPI says it does “not act as a court of law,” gives no legal advice, and does not settle contract disputes.

Penalties, plainly. Since January 1, 2026, skipping the page is a California Financing Law violation for licensed lenders. For everyone else it is an unfair, deceptive, or abusive practice. That second law allows fines of up to $2,500 per violation or $5,000 for each day it continues, whichever is more. Reckless or knowing violations cost more. A fine is not a refund. Refunds are ordered case by case.

A real case. On August 4, 2026, DFPI settled with Amerisource Funding, a Houston, Texas lender. DFPI said it made loans to California businesses without a license and without the required disclosures, including “the total cost of financing expressed as an annualized rate.” It paid a $44,000 penalty and $2,500 in costs. It must credit about $88,959 to 18 California businesses. Read the fine print. The credits were for charging above the 10% interest cap in California's constitution, not for the missing page. And these were equipment and business loans, not advances. The company neither admitted nor denied the findings. We found no source saying a missing summary voids a contract. What it means for yours is a lawyer's question.

File at dfpi.ca.gov/submit-a-complaint/ and attach the contract plus the messages where the offer was quoted.
Put the missing APR in the complaint. Compute it in the calculator from the advance amount, payback amount, and daily payment.

Does New York (or any other state) have the same law?

Yes. New York's version has been mandatory since August 1, 2023. It covers offers up to $2.5 million. It applies when a business is “principally directed or managed from the state of New York.” A California business does not get New York's page. A New York business does not get California's.

New York's cash-advance table has the same rows, plus a row for collateral. It also asks one question California's does not. In the Funding Provided row, it must ask whether a renewal includes money “used to pay unpaid finance charges or fees, also known as double dipping.” That is the treadmill in one line. A March 2026 law-firm survey counts ten states with some form of disclosure law: California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah, and Virginia. Details differ. Check your own state's rule before relying on it.

The Offer Summary exists so a funder cannot hide the yearly cost behind a factor rate. If you have one, the APR row is the number to argue about. If you do not, the absence itself is worth a complaint, and the form is online.

Take the Funding Provided, Estimated Total Payment Amount, and Estimated Term rows from your Offer Summary (or the advance, payback, and daily payment from your contract if you never got one) and put them in the calculator now, so you have your own APR estimate before you sign or before you file.

Run your offer through the calculator →

The calculator is free and collects nothing. If you use the funding-request form on that page, we may be paid a referral fee by the funder.

Sources

leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB1235 — Official bill status page; verified by fetch
dfpi.ca.gov/press_release/dfpis-commercial-financing-disclosure-regulations-approved-to-be — DFPI press release; verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=22802 — Fin. Code 22802(b); verified by fetch
leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB33 — Official bill status page and digest; verified by fetch
www.law.cornell.edu/regulations/california/10-CCR-914 — 10 CCR 914; verified by fetch
www.law.cornell.edu/regulations/california/10-CCR-901 — 10 CCR 901; verified by fetch
www.law.cornell.edu/regulations/california/10-CCR-900 — 10 CCR 900(a)(28); verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=22800 — Fin. Code 22800; verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=22801 — Fin. Code 22801(a)-(e); verified by fetch
dfpi.ca.gov/press_release/critical-dfpi-protections-for-small-businesses-upheld-by-ninth-c — DFPI press release, April 25, 2025; verified by fetch
natlawreview.com/article/ninth-circuit-upholds-dfpis-commercial-financing-disclosure-rules — National Law Review, April 23, 2025; verified by fetch
leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB666 — SB 666 chaptered text and status page; verified by fetch. The fee list and small-business definition in the text follow Civil Code 1799.300-1799.303 as amended by SB 1521 (Stats. 2024, ch. 194), effective January 1, 2025, per compliance review; a verified link to the amended sections should be added before publishing.
www.huschblackwell.com/newsandinsights/new-california-law-prohibits-certain-fees-in-commer — Husch Blackwell client alert; verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1799.30 — Current statutory text; verified by fetch
www.law.cornell.edu/regulations/california/10-CCR-920 — 10 CCR 920(a)-(c); verified by fetch
www.law.cornell.edu/regulations/california/10-CCR-952 — 10 CCR 952; verified by fetch
www.mofo.com/resources/insights/220721-california-commercial-financing-disclosure-regulati — Morrison Foerster, July 21, 2022; verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=22805 — Fin. Code 22805, renumbered from 22806 by SB 362, operative January 1, 2026; verified by fetch
www.truecostfunding.com/#calculator — Computed with the site's own calculator and shown on the page; an arithmetic result, not an external statistic
www.law.cornell.edu/regulations/california/10-CCR-954 — 10 CCR 954(a)-(b); verified by fetch
dfpi.ca.gov/wp-content/uploads/2026/08/Consent-Order-Amerisource-Funding-Inc.pdf — DFPI consent order dated August 4, 2026, Recitals C, G, H, J; text extracted from the PDF
www.nepm.org/national-world-news/2026-03-25/they-gave-her-business-a-lifeline-then-froze-a — NPR story by Alina Selyukh, March 25, 2026, NEPM republication; verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=22806 — Fin. Code 22806; verified by fetch
leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260SB362 — Official bill status page; verified by fetch
leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260SB362 — SB 362 bill text, Section 1(e); verified by fetch
www.buchalter.com/insights/starting-january-1-2026-for-commercial-financing-offers-of-5000 — Buchalter client alert, December 29, 2025; verified by fetch. DFPI's December 2025 bulletin was also checked and announces no rulemaking.
dfpi.ca.gov/alert/advisory-to-small-businesses-speak-up-about-merchant-cash-advances — DFPI advisory; verified by fetch
dfpi.ca.gov/submit-a-complaint — DFPI complaint page; verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=22807 — Fin. Code 22807; verified by fetch
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=90012 — Fin. Code 90012; verified by fetch
natlawreview.com/article/dfpi-resolves-commercial-financing-licensing-and-pricing-allegati — National Law Review, August 27, 2026; verified by fetch
www.law.cornell.edu/regulations/new-york/23-NYCRR-600.19 — 23 NYCRR 600.19; verified by fetch
www.law.cornell.edu/regulations/new-york/23-NYCRR-600.24 — 23 NYCRR 600.24; verified by fetch
www.law.cornell.edu/regulations/new-york/23-NYCRR-600.25 — 23 NYCRR 600.25; verified by fetch
www.buchalter.com/insights/ny-dfs-publishes-final-regulation-implementing-article-8-new-yo — Buchalter client alert, February 13, 2023; verified by fetch
www.law.cornell.edu/regulations/new-york/23-NYCRR-600.6 — 23 NYCRR 600.6; verified by fetch. California's 10 CCR 914 was checked and has no renewal or double-dipping language.
www.venable.com/insights/publications/2026/03/state-commercial-financing-disclosure-laws — Venable client alert, March 2, 2026; verified by fetch; details and dates not given for most states

This guide is general education, not legal, financial, or tax advice; what a missing or wrong disclosure means for your specific contract is a question for a California lawyer.