State-by-State Regulation Is Reshaping the MCA Industry

As of mid-2025, the Merchant Cash Advance (MCA) industry is undergoing a massive legal transformation. Roughly a dozen U.S. states have now enacted—or are actively pushing—MCA-specific laws, with requirements around disclosure, licensing, and interest rate transparency.

While MCAs were once seen as largely unregulated financial products, that era is quickly coming to a close.

Key States Leading the Charge

Here’s a breakdown of the most notable MCA regulation activity across the country:

🇨🇱 Texas — HB 700

Texas recently passed HB 700, which:

• Requires plain-English APR disclosures for all MCA agreements

• Mandates registration with the state for both funders and brokers

• Introduces penalties for misleading sales practices

This is a major step for a historically lender-friendly state—and signals that MCA oversight is expanding even in business-friendly jurisdictions.

🗽 New York, California, Virginia, Utah

These states already have comprehensive MCA regulations in place. Common elements include:

• Annualized cost disclosures that mimic APR

• Broker licensing and registration

• Limits on aggressive collection tactics

• Increased scrutiny around "confession of judgment" clauses

If you're funding or brokering deals in any of these states, compliance isn't optional—it’s the law.

🏛️ Illinois — SB Transparency Act (Pending)

Illinois is moving forward with its SB Transparency Act, designed to align with the regulatory standards of New York and California. Once passed, it will likely:

• Require funders to provide true-cost disclosures

• Prohibit certain types of misleading fee structures

• Create a state-run licensing portal for MCA providers

According to JD Supra, this bill could pass before the end of Q3 2025.

What This Means for the Industry

The result? MCAs are increasingly being regulated as loans, especially when it comes to cost disclosure and broker behavior.

Funders and ISOs can no longer afford to operate in a legal gray area. Each state’s rules vary, but the national trend is unmistakable: more transparency, more licensing, and more accountability.

How Rowan Advance Is Already Ahead of the Curve

At Rowan Advance, we welcome the regulatory shift—and we’re already built for it.

✅ Clear factor rates starting at 1.28
✅ Full payment transparency—no hidden terms
✅ State-compliant disclosure templates
✅ Registered ISO partnerships in regulated states
✅ Same-day commissions and honest pricing

“We believe in upfront terms, no tricks, and no surprises. That’s not just good business—it’s what regulators now demand,” says Eli Sklar, CEO of Rowan Advance.

What Brokers and Business Owners Should Do Now

If you're an ISO or small business owner, here’s what we recommend:

For Brokers For Business Owners ✅ Confirm which states you're actively working in and their MCA laws ✅ Ask for all cost disclosures before signing any MCA deal ✅ Partner only with funders who operate legally and transparently ✅ Avoid working with brokers who aren’t licensed in your state ✅ Stay informed on pending state bills and updates ✅ Seek out providers like Rowan that offer predictable, honest terms

Final Word: The New Normal for MCA

This patchwork of state regulation is just the beginning. Over the next year, we expect even more states to follow suit with licensing, disclosure mandates, and consumer protections.

At Rowan Advance, we’ve long believed that doing the right thing isn’t just ethical—it’s smart business. If you’re looking for funding or funders you can trust in this new regulatory climate, we’re ready to help.

Want help navigating MCA regulations in your state?
📩 Contact Rowan Advance — Our team can guide you through funding options that are fast, compliant, and crystal-clear.

Rowan Advance — Transparent Funding. Real Relationships.