What New York's commercial finance disclosure law covers
New York's rules live in Article 8 of the Financial Services Law, sections 801 through 812, and in the Department of Financial Services rules at 23 NYCRR Part 600 [1][8]. The state calls the statute the Commercial Finance Disclosure Law. It reaches sales-based financing (which includes merchant cash advances), closed-end loans, open-end lines of credit, factoring and other forms of business financing, each with its own disclosure section [1].
The law applies when your business is "principally directed or managed" from New York, or, for a sole owner, when you are a legal New York resident [7]. A funder may rely on the business address on your application to decide that [7].
| Not covered | What that means for you |
|---|---|
| Banks and other financial institutions | A bank's offer will not carry this state disclosure; ask the bank for its own cost terms |
| Deals over $2,500,000 | Large deals are outside the law |
| Financing secured by real property | A mortgage-backed business loan follows other rules |
| Leases | Equipment leases are outside Article 8 |
| Providers making 5 or fewer deals a year in the state | A one-off private funder may not have to disclose |
The Department of Financial Services adopted the Part 600 rules in the State Register on Feb 1, 2023 [8], and the rules set the compliance date at six months after that notice was published [9]. Penalties run up to $2,000 per violation, or $10,000 per violation when it is willful, and the superintendent can also order restitution [3].
The ten rows a New York cash advance disclosure must show
For sales-based financing, the rules fix the format: a table of ten rows and three columns, in a set order, with set wording [4]. Knowing the rows tells you where to look first.
| Row | What it tells you |
|---|---|
| Funding Provided | The amount financed, and what you get directly after deductions |
| Estimated Annual Percentage Rate (APR) | The cost as a yearly rate, based on the funder's estimate of your sales |
| Finance Charge | "This is the dollar cost of your financing." |
| Estimated Total Payment Amount | Every dollar you are expected to pay back |
| Estimated Payment | The average payment and how often it comes out |
| Payment Terms | Daily or weekly debits, the split of sales, any true-up and minimums |
| Estimated Term | How long collection should take, at the assumed sales |
| Prepayment (two rows) | Whether paying early still costs some or all of the finance charge, and any extra fees |
| Collateral Requirements | Any security interest or collateral the deal takes |
The double dipping question
When part of a new advance pays off an older one with the same funder, the Funding Provided row must answer in plain words whether the renewal includes money used to pay unpaid finance charges, which the rule calls "double dipping" [4]. If the answer is yes, it must show the amount. This matters most on renewals offered before the first advance is paid.
When an offer charges fees rather than interest, the APR row must also say "APR is not an interest rate" [4]. That line is honest: a cash advance is a purchase of future receivables, collected by a split of sales or a fixed debit, subject to reconciliation. The APR is still the best single number for comparing it with a loan.
How accurate the New York APR has to be, and why it is still an estimate
The APR on a New York disclosure is calculated with the same federal methods used for consumer loans, and it must include all finance charges [10]. For a regular deal it counts as accurate if it is within one-eighth of one percentage point of the correct figure [11].
For a cash advance the APR depends on how fast your sales come in. The rules make the funder state the monthly income it assumed, and warn that "your effective APR may also vary" if your actual income differs [4]. So check the assumption against your own bank statements. If the funder assumed higher sales than you really have, collection runs slower and the term runs longer than shown.
- Compare the Finance Charge row in dollars first. It does not change with assumptions on a fixed-fee deal.
- Then compare APRs across offers, using the same months for each.
- Read both Prepayment rows. Many advances keep the full finance charge even if you pay early.
- Run any offer through our offer comparer to see it beside a bank loan.
What a broker owes you in New York
Article 8 has no broker registration section [1], but the rules still bind brokers. Before a broker tells you about a specific offer, it must send you the funder's disclosure exactly as the funder wrote it [5]. A broker may not present a specific offer without doing that, or without confirmation from the funder that you already received it [5].
The funder must also tell you in writing how the broker is paid and who pays it [5]. Batch Capital, the funding team behind Business Funders, works as a broker and arranges offers from funders; it does not lend. Whoever you work with, the broker pay line is worth reading, because broker pay can be built into the cost you see.
New York State and SBA programs to check before a private offer
Empire State Development (ESD) runs New York's share of the federal State Small Business Credit Initiative, which it describes as more than $500 million for loans, equity and technical help [12]. Most of the money reaches owners through partner lenders, not as checks from the state. Three programs suit a working small business:
| Program | What it offers | How you apply |
|---|---|---|
| Small Business Revolving Loan Fund Round 2 | $63.5 million for microloans of $500 to $25,000 and larger loans; firms of 100 or fewer full-time staff [13] | Through a community based lending organization [13] |
| Main Street Capital Loan Fund | A $10 million fund for term loans of $100,000 or less to startups and early-stage firms, with interest-only payments the first year [14] | Pre-application on the partner Pursuit's platform [14] |
| Capital Access Program | $6.4 million in loan portfolio insurance so participating banks can say yes more often [12] | Through a participating lender [12] |
Program money is often cheaper than private offers, and slower. If you can wait a few weeks, ask a community lender about the revolving loan fund before taking a daily debit.
The SBA 7(a) loan goes up to $5 million and is made by private lenders with SBA backing [15]. Upstate, the SBA's Buffalo District covers 14 western counties from Buffalo and Rochester [16], and the Syracuse District serves 34 counties [17]. Read our SBA loan guide for terms and rate caps.
A simple order for comparing New York offers
- Ask every funder for the state disclosure, signed copy included, before you sign the contract.
- Put the Finance Charge rows side by side in dollars.
- Check each APR's income assumption against your last three months of deposits.
- Read the Prepayment and Collateral rows, then the contract's personal guarantee clause.
- Compare against one program option above, even if it is slower.
Our state disclosure law table shows how New York compares with other states, and how an MCA works explains reconciliation in plain words. New Jersey, our home market, has no such law yet; see New Jersey.
This is general information, not legal advice, as of Oct 20, 2026.