Kansas merchant cash advance law: what your offer has to show
Kansas requires a cost disclosure on commercial financing of $500,000 or less, including merchant cash advances, under its Commercial Financing Disclosure Act. It shows the total funds, what's disbursed, the total you'll pay, the dollar cost and how payments work. Brokers can't collect advance fees, and the attorney general enforces it.
Which offers the Kansas law covers
The act covers commercial financing transactions of $500,000 or less to Kansas businesses. Providers doing five or fewer deals a year are exempt, and so are banks and some others.
The disclosure, line by line
The Kansas disclosure lines:
| Line on the form | What it tells you | Check it against |
|---|---|---|
| Total amount of funds provided | The headline advance | The purchase price |
| Total amount disbursed | What reaches you after fees | Your funding-day deposit |
| Total amount to be paid | The full payback | The purchased amount |
| Total dollar cost | Payback minus funds provided | Subtract it yourself |
| Payments | Manner, frequency and amount, or an estimate if they vary | The ACH authorization |
| Prepayment | Whether paying early costs or saves anything | The contract |
Do brokers have to register?
Kansas doesn't register brokers or providers under this act. It does bar brokers from charging advance fees and from misrepresenting their services.
Confession of judgment
The act doesn't address confessions of judgment. Ask a Kansas lawyer before signing one.
Where to raise a problem
Complaints go to the Kansas attorney general. Penalties run $500 per violation up to $20,000, and more after a warning.
A worked example
Say a Kansas bakery gets an offer of $40,000, with $1,000 in fees taken out and $54,000 to be paid back. The form should show $40,000 provided, $39,000 disbursed, $54,000 to be paid, a total dollar cost of $14,000, how the payments come out, and whether paying early changes anything. If a line is missing, ask for a corrected form before you sign.
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 Kansas 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.