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 | Sales-based financing providers law (HB 1027) |
|---|---|
| Citation | Va. Code §§ 6.2-2228 to 6.2-2236 |
| Applies from | July 1, 2022 Providers and brokers had to register by November 1, 2022. |
| Deal size covered | $500,000 or less |
| Products covered | Sales-based financing only: funding repaid as a percentage of sales or revenue (merchant cash advances) |
| Estimated APR required | No |
| Registration | Sales-based financing providers and brokers must register with the Commissioner of Financial Institutions. |
| Regulator | State Corporation Commission, Bureau of Financial Institutions |
Key points
- Providers must disclose the finance charge and other terms when making a specific offer, but not an APR.
- Financial institutions, and providers that make no more than five sales-based financing transactions with a recipient in 12 months, are exempt.
What this means when you're comparing offers
Virginia'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 Virginia'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
- Mayer Brown, Virginia Enacts Merchant Cash Advance Registration and Disclosure Law (accessed 2026-09-26)
- Virginia HB 1027 (2022) bill text (accessed 2026-09-26)