Is a merchant cash advance legal in New Jersey?

The short answer

Merchant cash advances are legal in New Jersey. The state has no statute written specifically for them, and unlike 12 other states it has not enacted a commercial financing disclosure law. That means no New Jersey law requires a funder to show a standard cost box or an estimated APR before you sign.

That is not the same as no rules. MCA funders in New Jersey are subject to the state's general laws, and the Attorney General has used them: in 2023 it settled with Yellowstone Capital for $27.375 million over what it alleged were unconscionable, misleading and abusive practices. Two bills that would add disclosure rules are pending. This page covers what applies now, what may change, and the related rules on calls and card surcharges.

What New Jersey regulates today

Because there is no disclosure law, the burden is on you to get the numbers. Ask every funder for the total payback in dollars, the cash you receive after fees, the payment and how often, and the reconciliation terms. Then run them through the MCA true-cost calculator to see an estimated APR.

Enforcement: the Yellowstone settlement

On Jan 3, 2023, the New Jersey Attorney General announced a $27.375 million settlement with Yellowstone Capital LLC, its parent Fundry LLC and six related companies. According to the announcement:

• all New Jersey customers' outstanding balances under their MCA agreements were forgiven, an estimated $21.75 million;
• $5.625 million went to the Division of Consumer Affairs for restitution, civil penalties, fees and costs;
• the companies must be transparent in future MCA agreements "regarding fees and reconciliation rights" and give notice before taking legal action to collect.

The State alleged the companies lured businesses into "predatory lending arrangements disguised as cash advances on future receivables." These were allegations resolved by settlement. New York's own settlement with Yellowstone canceled $534 million in merchant debts, according to the New York Attorney General.

Pending bills: S1760 and A4580

S1760, sponsored by Senator Troy Singleton, was introduced Jan 13, 2026 and referred to the Senate Commerce Committee. Its synopsis: "Requires certain disclosures by providers of commercial financing." As introduced, it would:

• define a "broker" as a person who, for consideration, arranges or offers to arrange commercial financing, or assists or advises a recipient in getting it;
• exempt individual transactions over $500,000;
• require the estimated annual percentage rate, calculated under federal Regulation Z, among other disclosures.

A4580 was introduced Mar 10, 2026 and referred to the Assembly Financial Institutions and Insurance Committee. The previous session's bill, S1397, was amended by the Senate in December 2025 but lapsed when the session ended. Bills can change before passage, so read the current text before relying on it.

Confessions of judgment

A confession of judgment is a signed statement that lets a creditor get a court judgment without first filing a lawsuit. Fundera's MCA guide tells readers "do not sign a confession of judgment," and other states have limited them in ways that matter to New Jersey businesses.

• New York: CPLR 3218(b) lets a confession be filed only with the clerk of the county where the defendant's affidavit said it resided, or where it resides at filing. A business resides in any county where it has a place of business.
• Vermont: Act 142 makes a confession of judgment void in covered commercial financing from July 1, 2027.

This page does not yet cover New Jersey's own court rules on confessed judgments. If your contract includes a confession of judgment, or a funder has entered one against you, talk to a New Jersey lawyer.

Telemarketing to cell phones

New Jersey's telemarketing law (P.L.2003, c.76) says: "No telemarketer shall make or cause to be made any telemarketing sales call to a commercial mobile service device of any customer." It defines a customer as "an individual who is a resident of this State and a prospective recipient of a telemarketing sales call." Whether that reaches a call to a business owner's cell about financing is a question for a lawyer. If you are getting unwanted sales calls about funding, you can report them to the Division of Consumer Affairs.

Card surcharges in New Jersey

Since Aug 18, 2023, New Jersey law says a seller "shall not impose on a customer who uses a credit card for a transaction occurring in New Jersey a surcharge that is greater than the actual cost to the seller to process the credit card payment." The surcharge must be posted on a sign at the point of entry and point of sale, on the menu for restaurants, on the checkout page online, and stated aloud by phone. See all verified states in our surcharge law table.

If you have an MCA in New Jersey

1. Find your contract's reconciliation clause and use it in writing if sales drop.
2. Keep every bank statement showing the debits, and every message from the funder.
3. Before taking another advance, read our stacking guide.
4. To leave early, request a payoff letter: see MCA early payoff.
5. If you think a funder acted unfairly, you can file a complaint with the Division of Consumer Affairs, and talk to a New Jersey lawyer.