Florida Disclosure Laws: What Your Funding Offer Must Tell You
In short: Florida law (including the revised commercial financing disclosure rules) mandates that funders provide a clear breakdown of the total cost of funding, the repayment amount, the factor rate or APR (if applicable), and all fees. You must receive this disclosure before you sign. Understanding these requirements helps you compare offers and avoid surprises.
Key takeaways
- Florida's commercial financing disclosure law applies to merchant cash advances, term loans, lines of credit, and invoice factoring.
- Funders must provide a written disclosure with the total funding amount, total cost, factor rate or APR, and a clear payment schedule.
- You have the right to receive this disclosure before you sign any agreement - never rely on verbal promises.
- Disclosure requirements help you compare offers side-by-side and spot hidden fees or inflated costs.
Why Florida Disclosure Laws Matter for Small Business Owners
If you own a business in Florida and you're considering a merchant cash advance (MCA), a short-term loan, a line of credit, or invoice factoring, you need to understand what the law requires funders to tell you. Florida has some of the strongest commercial financing disclosure rules in the country. These rules are designed to protect you from surprise fees, unclear terms, and predatory practices.
Before you sign any funding agreement, the funder must give you a standardized disclosure document that spells out the true cost of the money you're borrowing. This post walks you through exactly what that document must include, how to read it, and what to do if you don't get one.
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What Are Florida Disclosure Laws for Business Funding?
Scope: Which Funding Types Are Covered
Florida's commercial financing disclosure requirements (codified in Chapter 687 of the Florida Statutes) apply to a wide range of business funding products. They cover:
- Merchant cash advances (MCAs)
- Term loans
- Business lines of credit
- Invoice factoring and receivables financing
- Equipment financing agreements
The law does not apply to transactions over a certain size (currently $500,000) or to loans from banks that are federally regulated and preempted by federal law. But if you're a small business owner seeking a typical MCA or working capital loan under $500,000, you are likely covered.
What the Law Requires Funders to Disclose
Under Florida law, the funder must provide a written disclosure that includes:
- Total amount of funds provided - the principal you receive
- Total repayment amount - what you pay back in total
- Annual percentage rate (APR) - if the funding is a loan with a stated interest rate
- Factor rate - for MCAs, the factor rate (e.g., 1.2) must be clearly shown
- Itemized list of fees - origination fees, documentation fees, prepayment penalties, etc.
- Payment schedule - how often you pay, the amount of each payment, and the total number of payments
- Total dollar cost of the financing - the difference between what you receive and what you repay
You must receive this disclosure before you sign the contract. It should be in a separate document that stands out, not buried in fine print.
How to Read a Florida-Compliant Disclosure
Illustrative Example: A Merchant Cash Advance
Note: The following is an illustrative example only and does not represent actual data or offers.
Suppose you receive $20,000 in an MCA at a factor rate of 1.25. The disclosure would state:
- Funding amount: $20,000
- Factor rate: 1.25
- Total repayment amount: $25,000
- Total dollar cost: $5,000
- Withholding percentage (if paid from daily credit card sales): e.g., 15%
- Estimated number of payments (based on average sales): e.g., 200 daily payments
This lets you see immediately that you are paying $5,000 for the use of $20,000. Compare that with another offer at a 1.15 factor rate, where the total cost would be $3,000. That clarity is exactly what the law is meant to give you.
Illustrative Example: A Business Term Loan
For a term loan, the disclosure would show an APR. For illustration only: a $50,000 loan with a 24-month term and an APR of 18% would have a total repayment amount around $60,000 (depending on actual amortization). The disclosure would break that down by payment schedule, fees, and total cost.
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Common Mistakes Business Owners Make When Reviewing Offers
- Skipping the fine print - Even with a disclosure, some funders include terms like prepayment penalties or hidden fees. Read every line.
- Relying on verbal promises - If a salesperson tells you something that contradicts the written disclosure, the disclosure is what matters. Get everything in writing.
- Not comparing multiple offers - A disclosure from one funder is useful, but comparing disclosures from two or three funders shows you the best deal. Use a free matching service like Fast MCA Capital to get multiple vetted offers.
- Ignoring the total dollar cost - A low monthly payment might look good, but a longer term can cost more in total. Always check the total cost.
How to Qualify and What Funders Look For
While disclosure laws are about transparency, not approval, you should know that funders typically evaluate your business based on:
- Time in business - most funders prefer at least 6 months to 1 year of operation
- Monthly revenue - steady cash flow, often $10,000 or more per month (illustrative only)
- Credit score - personal and business credit history may be considered
- Industry - some industries are considered higher risk
These are general guidelines; every funder has its own criteria. The key is that if you meet basic requirements, you can receive multiple offers with clear disclosures - and you can compare them without pressure.
Why Use a Free Matching Service Like Fast MCA Capital
Florida disclosure laws are powerful, but navigating the funding landscape can still be overwhelming. You might not know which funders are reputable or which offer terms that suit your business. That's where Fast MCA Capital comes in. We are a free matching service that connects you with vetted funding partners. We do not lend money or make credit decisions. Instead, we help you find offers that comply with disclosure laws - so you can see all the numbers before you sign. Our service costs you nothing, and there is no obligation.
By working with a matching service, you can receive multiple disclosures side-by-side, each compliant with Florida law, and choose the one that fits your budget and goals.
Practical Tips for Reviewing Your Disclosure
- Check the date - disclosures should be recent (within a few days of your application).
- Ask questions - if any line isn't clear, ask the funder to explain it in simple terms. Write down their answer.
- Look for the total dollar cost and compare it across offers.
- Confirm the funder is registered - ask if they are licensed or registered with the Florida Office of Financial Regulation where required.
- Keep a copy - save the disclosure document for your records.
Bottom Line: Your Rights Under Florida Law
Florida's disclosure laws give you the right to know exactly what a funding offer will cost you before you commit. Whether you're considering a merchant cash advance, a term loan, a line of credit, or invoice factoring, you should receive a clear, written breakdown of the terms. Never accept an offer that does not include a proper disclosure document. And if you need help finding vetted funding partners who follow the law, Fast MCA Capital can match you for free - so you can compare offers with confidence.