What it means for you
If you take an MCA of $250,000 or less in Connecticut, the offer should come with a disclosure in the Banking Commissioner's format showing the finance charge, the total repayment, the estimated term, other fees and any broker compensation paid by the provider. You sign it before the deal goes ahead. The funder cannot pull or change a specific offer until midnight of the third calendar day after making it, except for underwriting checks or at your request.
- Law
- Sales-based financing disclosure and registration law (Public Act 23-201)
- Citation
- Conn. Gen. Stat. §§ 36a-861 to 36a-872
- Enacted
- 2023-06-28
- Effective
- 2024-07-01
- Regulator
- Connecticut Department of Banking
- Who it covers
- Providers and brokers of sales-based financing of $250,000 or less offered to recipients in Connecticut. Sales-based financing is repaid as a percentage of sales or revenue, or on a fixed schedule that is reconciled to sales, which covers most merchant cash advances. The law does not cover other commercial loans.
- Registration
- Providers and brokers must register with the Banking Commissioner through NMLS. The deadline for businesses already operating was October 1, 2024. The fee is $1,000 to register and $500 a year after that, due by September 15. Public Act 25-115 (2025) added renewal timelines and lets the Department suspend, revoke or refuse to renew registrations.
- Brokers
- Brokers must register. If the provider pays a broker directly, the disclosure must show the amount.
What must be on the disclosure
- Total amount of financing and the disbursement amount
- Finance charge
- Total repayment amount
- Estimated term
- Payment amounts and schedule, fixed or variable
- Other potential fees not in the finance charge, such as late, draw and returned payment fees
- Prepayment and refinancing charges
- Collateral requirements or security interests
- Compensation the provider pays directly to a broker
What a Connecticut MCA offer must show
The disclosure lists the financing amount and disbursement amount, the finance charge, the total repayment amount, the estimated term, the payment amounts and schedule, other fees, prepayment charges, collateral, and any compensation the provider pays a broker. You sign it before the transaction proceeds.
The disclosure rules took effect July 1, 2024. The Department of Banking gave providers until September 30, 2024 to adopt the prescribed format.
Contract limits in Connecticut
- A provider may not revoke, withdraw or change a specific offer until midnight of the third calendar day after the offer date, except because of underwriting verification or at your request.
- A contract may not contain a waiver of your right to notice, a hearing or a prior court order before the funder obtains a prejudgment remedy, such as an attachment. Public Act 25-115 revised this ban, effective July 1, 2025.
Registration and enforcement in Connecticut
Registration runs through NMLS. The Department of Banking publishes a list of registered commercial financing providers and brokers, with a downloadable file and a link to NMLS Consumer Access.
The Banking Commissioner can bring administrative or court proceedings, with civil penalties of up to $100,000 per violation, restitution and injunctions.
What the Connecticut law does not do
- It does not require an estimated APR.
- It does not cover commercial loans or other financing that is not sales-based.
- It does not cover deals over $250,000 or financing from banks and credit unions.
- It does not set a maximum price.
This page is general information, not legal advice.
Who is exempt
- Connecticut and federal banks and credit unions, bank holding companies and their affiliates
- Technology service providers to exempt entities
- Lenders regulated under the federal Farm Credit Act
- Financing secured by real property, leases and purchase-money obligations
- Financing of $50,000 or more to motor vehicle dealers or rental companies
- Financing offered by a manufacturer for its own products or services
- Providers that complete 5 or fewer transactions a year
- Sales-based financing over $250,000
Questions
Does Connecticut require an APR on MCA offers?
No. Connecticut's disclosure shows the finance charge, total repayment amount and estimated term, but the law does not require an APR.
Do MCA brokers have to register in Connecticut?
Yes. Providers and brokers of sales-based financing must register with the Banking Commissioner through NMLS. The Department of Banking publishes a list of registrants.
Can a Connecticut funder change its offer after sending it?
Not until midnight of the third calendar day after the offer date, unless the change comes from underwriting verification or your own request.
Does the Connecticut law cover MCAs over $250,000?
No. It applies to sales-based financing of $250,000 or less.
Sources
- Public Act 23-201 (Substitute Senate Bill 1032) — Connecticut General Assembly (checked 2026-09-30)
- OLR Public Act summary: An Act Requiring Certain Financing Disclosures (PA 23-201) — Connecticut General Assembly (checked 2026-09-30)
- Commercial Financing Provider or Broker Registration Information — Connecticut Department of Banking (checked 2026-09-30)
- Guidance for commercial financing providers and brokers (updated August 1, 2024) — Connecticut Department of Banking (checked 2026-09-30)
- Bulletin 3146, June 7, 2024 — Connecticut Department of Banking (checked 2026-09-30)
- 2025 Banking and Related Legislation (Public Act 25-115) — Connecticut Department of Banking (checked 2026-09-30)
- Commercial Financing Providers and Brokers Registered in CT — Connecticut Department of Banking (checked 2026-09-30)
- SB 1032 (2023) bill status — LegiScan (checked 2026-09-30)
Last reviewed 2026-09-30. General information, not legal advice. Laws and regulations change; confirm with the regulator or an attorney.