SMB Financing Blog

The MCA market continues to expand, but the pressure behind that growth is accelerating. As volume climbed to $19.7B, defaults surged 59% year over year, exposing a growing disconnect between funding demand and merchant durability. For brokers, the takeaway isn’t to slow down—it’s to structure smarter

Starting January 1, 2026, California is expanding regulatory scrutiny beyond disclosures and into how pricing is discussed throughout the application process — including calls, texts, emails, and sales conversations. In this latest issue, we break down what this means for ISOs and brokers and how to prepare.

The regulatory wave reshaping alternative finance isn’t slowing down — it’s expanding. From New York to Texas and California, with Florida as another key stop in the broader national progression, each state is moving toward stronger MCA transparency and heightened enforcement. This issue breaks down how Florida fits into the nationwide regulatory wave — and why brokers should be paying close attention.

From New York to California, the regulatory wave continues to reshape the alternative finance landscape. In this article, we break down how California’s rules differ from other states, how enforcement is beginning to take shape, and what brokers should do to stay compliant and competitive as these changes ripple across the industry.

When New York passed its Commercial Financing Disclosure Law (CFDL) in 2021, it set a new standard for transparency in alternative financing. What began as a state-level push to protect small business borrowers has evolved into the national blueprint for MCA regulation. From California and Connecticut to Texas and beyond, the ripple that started in New York continues to spread—shaping how funders, brokers, and merchants operate in a new era of accountability.

Summer is still the best time to prepare for Q4. But this year, margins are tighter, competition is tougher, and merchants are seeking capital earlier than ever. Brokers who act now will be best positioned to capture the biggest wins.

When even Texas, one of the most pro-business states in the country, tightens the rules on MCA practices, the message is clear: our industry is being required not just to explain better, but to operate better. But regulation is only the starting line. Compliance may be the floor, but it’s not the ceiling. The real differentiator for brokers isn’t disclosure—it’s relationship-building. Brokers who educate merchants, provide clarity, and deliver real solutions are the ones who earn long-term trust and repeat business.

Texas joins New York and California in reshaping the alternative finance industry. For years, states like California and New York have pioneered the regulation of MCAs. But now, Texas, one of the most pro-business states in America - with its historically light regulatory touch - has enacted legislation that doesn’t just call for disclosure and transparency, but rewrites the rules for how payments can be legally collected.