The Alternative Finance Regulations Are Changing. Are You Prepared?
The rules governing commercial financing continue to evolve—and for brokers, knowing what’s changing can matter just as much as knowing where the next opportunity is.
Texas has a broker registration deadline approaching. California has major commercial-financing legislation on the Governor’s desk. And New Jersey lawmakers are considering new disclosure requirements.
đź’¬Are you ready for the next phase of regulation?
Texas: The Clock Is Ticking
HB 700 took effect on September 1, 2025, creating a new regulatory framework for commercial sales-based financing. This includes registration and disclosure requirements for providers and brokers, as well as new restrictions affecting automatic debits from recipient accounts.
🚨 What’s New: Texas Registration Is Now Open
Texas registration through NMLS opened on September 1, 2026. Providers and brokers already doing business in Texas when HB 700 took effect must register by December 31, 2026. Existing registrants must also renew by that date.
👉 Texas OCCC — Registration Information & Requirements:
occc.texas.gov/industry/regulated-lenders/commercial-sales-based-finance/
đź’¬ What should brokers be asking?
âś… Is my business required to register in Texas?
âś… Are the funders I’m working with prepared?
âś… Could a compliance issue affect a deal already in my pipeline?
The time to ask those questions is before a deal is affected—not after.
California: A Major Overhaul Could Be Coming
AB 2116 has passed the California Legislature but is not yet law. It is awaiting action by Governor Gavin Newsom.
🚨 What Brokers Need to Know
The biggest change for the Nexi community: commercial-financing providers and brokers covered by the legislation would generally be required to obtain a California license beginning July 1, 2028.
The legislation would expand the California Financing Law framework to additional forms of commercial financing, including accounts receivable purchases and factoring, asset-based financing, commercial loans, and open-end commercial financing.
It would also impose new restrictions on certain practices, including pre-default confessions of judgment and powers of attorney.
If signed, brokers doing business in California will have time to prepare—but 2028 shouldn’t be mistaken for “nothing to think about today.”
đź’¬ What should brokers be asking?
âś… Would my business need a California license?
✅ Are the funders I’m working with preparing?
âś… What changes would I need to make before the licensing requirement takes effect?
👉 California DFPI — California Financing Law & Licensing Information:
https://dfpi.ca.gov/regulated-industries/california-financing-law/
The DFPI provides information on California’s current licensing requirements, application guidance, and access to NMLS.
New Jersey: A State to Watch
New Jersey has not yet enacted a commercial-financing disclosure law, but lawmakers have renewed efforts to regulate the industry.
Senator Troy Singleton’s S1760 proposes new disclosure requirements for commercial financing, including sales-based financing and factoring, with provisions specifically affecting brokers.
If enacted, the legislation would introduce requirements around financing costs and APR or estimated APR disclosures, as well as broker fees and broker conduct.
⚠️ What Brokers Need to Know
S1760 remains proposed legislation. These requirements are not currently New Jersey law.
But that doesn’t mean brokers should ignore it. If you do business with New Jersey merchants, now is the time to understand what’s being proposed and how it could affect your business if enacted.
đź’¬ What should brokers be asking?
âś… Could my transactions or broker fees be affected?
âś… Am I prepared for additional disclosure requirements?
âś… Are the funders I work with following the legislation?
👉 Track S1760 — New Jersey Legislature:
https://www.njleg.state.nj.us/bill-search/2026/S1760/bill-text?f=S2000&n=1760_I1
Keep More Options on the Table. And Stay Compliant.
As regulations change, who you work with matters.
Nexi works with brokers to understand the merchant, the state, the merchant’s existing obligations, and the funding strategy that makes sense for the business.
When existing MCA remittances put pressure on a merchant’s cash flow, Nexi can provide another path: a Line of Credit for Texas merchants or, in other eligible states, Nexi’s Reverse Consolidation weekly purchase solution—helping reduce the burden of existing remittances, improve cash flow, and create meaningful savings.
The objective isn’t simply to fund another deal. It’s to help brokers stay informed and compliant, keep more options on the table, and build merchant relationships that continue beyond a single transaction.
👉 Got a deal and not sure what options are on the table? Let’s start the conversation.
đź’Ľ New to Nexi? Register as an ISO/Broker: https://shorturl.at/I7zva
👉 Subscribe to Nexi Insider and stay ahead of what’s coming next:
https://lnkd.in/gX2j2enM
Sources & Further Reading
Texas
Texas Secretary of State — Adopted Commercial Sales-Based Financing Rules
https://www.sos.texas.gov/texreg/archive/July32026/Adopted%20Rules/7.BANKING%20AND%20SECURITIES.html
Texas OCCC — Commercial Sales-Based Financing
https://occc.texas.gov/industry/regulated-lenders/commercial-sales-based-finance/
California
California AB 2116 — Current Status and Enrolled Legislation
https://calmatters.digitaldemocracy.org/bills/ca_202520260ab2116
New Jersey
New Jersey Legislature — S1760: Commercial Financing Disclosures
https://pub.njleg.gov/Bills/2026/S2000/1760_I1.HTM
Cobalt Intelligence — NJ Bill Mandates APR Disclosure for MCA & Factoring Deals
https://blog.cobaltintelligence.com/post/nj-bill-mandates-apr-disclosure-for-mca-factoring-deals
Broader Regulatory Landscape
Alston & Bird — States Impose Commercial Financing Disclosure Requirements
https://www.alstonconsumerfinance.com/states-impose-commercial-financing-disclosure-requirements/
This article is provided for informational purposes only and does not constitute legal advice. Brokers should consult their own legal counsel regarding the applicability of any law, regulation, registration, licensing, or disclosure requirement to their business or transactions.
