New York merchant cash advance law: what your offer has to show
New York requires a cost disclosure on commercial financing offers of $2.5 million or less, including merchant cash advances. The form shows the funding provided, an estimated APR, the finance charge, the total repayment and the estimated term. Providers give it, and brokers have to pass it along. The rules are in Financial Services Law Article 8 and 23 NYCRR Part 600.
Which offers the New York law covers
The law applies to offers of commercial financing of $2.5 million or less to recipients in New York, including sales-based financing. Some providers are exempt, including banks, and so are deals above the limit. The DFS rules let providers estimate APR with either a historical method or an opt-in method, and set the form's layout.
The disclosure, line by line
The New York sales-based financing form includes these lines:
| Line on the form | What it tells you | Check it against |
|---|---|---|
| Funding provided | The cash you receive after anything withheld | Your funding-day deposit |
| Estimated APR | Cost as a yearly rate on the provider's estimate | The APR calculator |
| Finance charge | Total cost beyond the funding | Total repayment minus funding |
| Estimated total repayment amount | The full amount you'll deliver | The contract's purchased amount |
| Estimated payment | What each debit or split takes | The ACH or split agreement |
| Estimated term | How long repayment should take | Payback divided by payment |
| Payment method and prepayment | How payments are figured and what happens if you pay early | The contract's payment and prepayment sections |
Do brokers have to register?
New York doesn't require brokers to register under this law. It does require the provider's disclosure to reach you, including when a broker is in the middle. If you never saw the form, ask for it before you sign.
Confession of judgment
New York courts have their own rules for confessions of judgment, and they've changed over time. The disclosure law doesn't address them. Ask a New York lawyer before you sign one.
Where to raise a problem
Complaints about a provider go to the New York Department of Financial Services. For court questions, see CourtHelp.
Read the form with the contract
The disclosure and the contract have to match. If the estimated payment on the form is lower than the debit in the ACH authorization, stop and ask.
Sources
- New York Financial Services Law, Article 8 (commercial finance disclosure)
- 23 NYCRR Part 600 (New York DFS disclosure rules)
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 New York 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.