SMB Financing Blog

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.

A recent map shared by Sean Murray, Chief Editor of deBanked, illustrates how far state-level disclosure laws are spreading. What began with New York, California, and Connecticut is no longer isolated. States like Florida, Georgia, Illinois, Virginia, and now Texas are following suit. The pressure for transparency is quickly becoming a national standard.

Merchant Cash Advances (MCAs) are a lifeline for businesses that need to access capital when they need it most.

The alternative finance space is evolving rapidly, and so are the rules that govern it. As more merchants turn to alternative funding solutions, regulators are stepping in to enforce transparency, fairness, and accountability. For brokers, this shift represents both a challenge and an opportunity to stand out from your competition by leading with trust.

Merchants are overwhelmed, brokers are under pressure, and the MCA stacking model is cracking. What once promised fast funding now delivers daily cash flow stress, renewal friction, and long-term burnout. In 2025, forward-thinking brokers aren’t just chasing quick closes—they’re shifting toward smarter, more sustainable solutions that actually help merchants grow. The real question isn't if the model is broken. The question is what replaces it.