On this page
| Disclosure law | Yes |
|---|---|
| Broker registration | Yes |
| State calling statute | Federal only |
The first state to legislate here and still the most demanding. California treats a commercial financing offer much the way it treats a consumer one: a standardised disclosure, delivered before signing, with an annualised cost figure the merchant can compare against anything else on the table.
The disclosure requirement
| Statute | Commercial Financing Disclosure Law (SB 1235), with DFPI regulations |
|---|---|
| In force | Regulations took effect 9 December 2022 |
| Reaches | Transactions of $500,000 or less |
| Must contain | Amount financed, total dollar cost, term, payment amount and frequency, prepayment policy, and an estimated annualised rate. |
| Annualised rate | Required. California is one of only two states that insists on an annualised figure. |
Registration and licensing
A California Financing Law licence is required to broker commercial loans, and the Department of Financial Protection and Innovation reads its jurisdiction broadly. Advances structured as purchases of receivables sit in genuinely contested territory, which is why a large number of California brokers hold a CFL licence regardless of how their paper is drafted.
Calling into California
No FTSA-style telephone solicitation act, so the federal TCPA is the operative calling rule. What California does have is the strongest privacy regime in the country: since January 2023 the CCPA as amended by the CPRA reaches business contact data, which means a merchant can ask what you hold on them and ask you to delete it.
What changes for a broker
- The disclosure obligation attaches to the offer, not only to the capital. If you are the one putting numbers in front of a merchant, assume it reaches you.
- SB 362 tightened how the words “interest” and “rate” may be used, which changes how a factor can be described on a call as much as in a document.
- A merchant here has an annualised number in writing before they sign. Quoting a factor rate on the phone and letting the APR arrive as a surprise at signing is a bad sequence in every state and a specifically bad one in this one.
- CCPA deletion requests are a real operational obligation on a CRM full of merchant contact data, not a theoretical one.
What California files look like
The largest single pool of qualifying merchants in the country and the most vertical-diverse. Restaurants and personal services dominate by count; logistics around the Los Angeles and Oakland ports, agriculture in the Central Valley, and construction across the state produce the larger advances.
Questions
Does California regulate merchant cash advances?
Yes. Commercial Financing Disclosure Law (SB 1235), with DFPI regulations applies to transactions of $500,000 or less. Amount financed, total dollar cost, term, payment amount and frequency, prepayment policy, and an estimated annualised rate.
Do I need to register to broker MCAs in California?
A California Financing Law licence is required to broker commercial loans, and the Department of Financial Protection and Innovation reads its jurisdiction broadly. Advances structured as purchases of receivables sit in genuinely contested territory, which is why a large number of California brokers hold a CFL licence regardless of how their paper is drafted.
Can I cold call businesses in California?
No FTSA-style telephone solicitation act, so the federal TCPA is the operative calling rule. What California does have is the strongest privacy regime in the country: since January 2023 the CCPA as amended by the CPRA reaches business contact data, which means a merchant can ask what you hold on them and ask you to delete it.
Whichever state you are dialling, what protects you is the consent record rather than an assurance from a vendor. That is covered in the compliance guide.
Do you sell MCA leads in California?
Yes. Every lead clears the same six minimums wherever the merchant is — $30K+ monthly revenue, $15K+ requested, six months trading, four months of statements available, U.S.-based, and mobile-verified by a 6-digit code. $60 per lead, in packs starting at 50. We can filter your leads by state, which is a real risk control in California if you are concerned about the calling rules.