Connecticut merchant cash advance law: what your offer has to show
Connecticut requires providers of sales-based financing, including merchant cash advances, to give a disclosure on a form set by the Banking Commissioner, and both providers and brokers register with the Department of Banking. A specific offer can't be withdrawn or changed before midnight of the third day, except for underwriting, and contracts can't waive your right to notice before a prejudgment remedy.
Which offers the Connecticut law covers
The law, Conn. Gen. Stat. §§ 36a-861 to 36a-872, covers commercial financing to Connecticut recipients, with exemptions for banks and some others. The Department of Banking's guidance includes the exact disclosure form.
The disclosure, line by line
The Connecticut form, in the Department's layout:
| Line on the form | What it tells you | Check it against |
|---|---|---|
| Total amount of the commercial financing | The headline advance | The purchase price |
| Finance charges deducted at disbursement | Fees taken out up front | The offer's fee lines |
| Disbursement amount | What reaches you | Your funding-day deposit |
| Finance charge and total repayment amount | Total cost, and disbursement plus cost | The purchased amount |
| Estimated time and payment schedule | Fixed amount and frequency, or the method for variable payments | The ACH authorization |
| Other fees, collateral | Draw, late and returned-payment fees, and security interests | The fee schedule and UCC section |
| Broker compensation | Whether and how much the provider pays a broker from the financed amount | Ask the broker |
| Prepayment or refinance charges | Including any unpaid finance charge still owed | The renewal math, if any |
Do brokers have to register?
Yes. Commercial financing brokers and providers register with the Connecticut Department of Banking through NMLS.
Confession of judgment
The Connecticut law bars any contract term that waives your right to notice, a judicial hearing or a prior court order before a provider gets a prejudgment remedy. That covers the pre-suit shortcuts a confession of judgment is used for. Ask a lawyer how it applies to your contract.
Where to raise a problem
Complaints go to the Connecticut Department of Banking.
The three-day rule
Use the time. An offer that can't change for three days is an offer you can compare. Put it next to others in the offer comparison tool.
Sources
This is general information, not legal advice. For your contract and your state, talk to a business lawyer. This page gets a legal review before it's indexed.
Funding a Connecticut business?
We check which funders fit and what the offer has to show before anything goes out. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.