The short answer

California requires an estimated APR on commercial financing offers of $500,000 or less, and its financing-broker licensing regime is the broadest in the country.

Checked 30 August 2026. This is a summary of what the rules are, not legal advice on what to do about them — and secondary sources disagree on several of these effective dates, usually because a statute’s own effective date and the date compliance is actually required are different. Confirm against the statute.

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