This is a plain-English summary for business owners, not legal advice. Laws and regulations change. Check the statute and the regulator's guidance, or ask an attorney, before relying on it.
At a glance
| Law | Commercial sales-based financing law (HB 700) |
|---|---|
| Citation | HB 700, 89th Legislature (2025) |
| Applies from | September 1, 2025 Providers and brokers must register by December 31, 2026 (registration opened September 1, 2026). |
| Deal size covered | Specific offers of less than $1,000,000 |
| Products covered | Sales-based financing only (merchant cash advances) |
| Estimated APR required | No |
| Registration | Providers and brokers must register with the Office of Consumer Credit Commissioner and renew annually. |
| Regulator | Office of Consumer Credit Commissioner (OCCC) |
Key points
- Required disclosures include the total amount of financing, the disbursement amount, the finance charge, the total repayment amount, payment amounts, other potential fees, and any collateral requirements.
- Providers may not automatically debit your deposit account unless they hold a perfected, first-priority security interest in it, and confessions of judgment are prohibited.
- The OCCC may seek civil penalties of up to $10,000 per violation.
What this means when you're comparing offers
Texas's disclosures give you the dollar figures but not an annual rate. That makes it hard to compare a sales-based advance against a loan quoted with an interest rate, and a short, expensive offer can look cheap if you only see the finance charge.
You can fill the gap yourself. From the disclosure, take the amount disbursed (after fees), the total repayment and the payment schedule, and enter them in our merchant cash advance calculator (for factor-rate offers) or the loan comparison calculator (choose "Total amount to repay"). Both compute an estimated APR by the Regulation Z Appendix J actuarial method.
What a disclosure typically shows
The exact list varies by state and product, but commercial financing disclosures generally cover the total amount of financing, the amount actually disbursed after fees, the finance charge or total cost, the total repayment amount, and the payment amount and frequency. Check the statute cited above for Texas's precise requirements.
If an offer is covered and you weren't given a disclosure, ask for one before signing. If a provider refuses, treat it as a warning sign.
Other states
See all state commercial financing disclosure laws, including which require an APR and how deal-size limits compare.
Sources
- Holland & Knight, Texas Governor Signs Commercial Sales-Based Financing Legislation Into Law (accessed 2026-09-26)
- Mayer Brown, Texas Commercial Financing Disclosure and Registration Law (accessed 2026-09-26)
- Venable LLP, State Commercial Financing Disclosure Laws (March 2026) (accessed 2026-09-26)