Revenue based financing for New York businesses
Merchant cash advance in New York
New York requires most merchant cash advance providers to show you an estimated APR, total repayment, and payment details before you sign. Learn what your offer must include, and check which programs fit your New York business.
How merchant cash advances work in New York
A merchant cash advance works the same way in New York as anywhere else: a funder buys a share of your future sales for a lump sum today. What changes by state is what the funder must tell you before you sign.
You receive funding up front and repay a fixed total amount through daily or weekly debits, or a percentage of card sales. Because an MCA is usually structured as a purchase of receivables rather than a loan, it is priced with a factor rate instead of an interest rate. See how factor rates and total cost work.
New York is one of a growing number of states with its own commercial financing law. Knowing what that law requires helps you read an offer, spot missing information, and compare funders on equal terms.
New York rules for merchant cash advances
| Rule | What it means for you |
|---|---|
| Law | Commercial Finance Disclosure Law, New York Financial Services Law Article 8, with regulations at 23 NYCRR Part 600 |
| Who it covers | Providers of commercial financing, including sales-based financing such as merchant cash advances, and brokers who present specific offers |
| Amount covered | Offers of up to $2,500,000 |
| When you get it | When a provider makes a specific offer, before you sign |
| Effective | Mandatory compliance began August 1, 2023 |
| Regulator | New York State Department of Financial Services (DFS) |
Summary for general information; see the statute and DFS regulation in the sources below for exact requirements and exemptions.
New York amended CPLR 3218 in 2019. Since August 30, 2019, a confession of judgment can generally be entered in New York only against a defendant who lived in New York when signing it. The change followed reporting that MCA funders had used New York courts to obtain thousands of judgments against out-of-state small businesses.
If an agreement asks you to sign a confession of judgment, ask what it covers and have an attorney review it before you sign.
What your offer must show you
For sales-based financing, New York requires the provider to disclose:
- The total amount of financing, and the disbursement amount if fees are deducted or withheld
- The finance charge
- An estimated annual percentage rate (APR), calculated under federal Regulation Z rules and based on projected sales
- The total repayment amount
- The estimated term and the payment amounts and frequency, including an average monthly payment
- Other fees not included in the finance charge, such as draw, late, or returned-payment fees
- Whether paying off early or refinancing changes what you owe
- Any collateral requirements or security interests
How to use the disclosure to compare offers
Because New York requires an estimated APR, you can compare an MCA directly with a loan or with another advance. Line up every offer on the disbursement amount, total repayment, estimated APR, payment frequency, and early payoff terms.
| Disclosure line | Hypothetical offer |
|---|---|
| Funding amount (total financing) | $50,000 |
| Fee withheld at funding | $1,500 |
| Amount actually deposited (disbursement) | $48,500 |
| Total repayment (1.30 factor) | $65,000 |
| Payments | About $344 per business day for about 9 months |
| Finance charge | $16,500 (total repayment minus the $48,500 disbursed) |
| Estimated APR | About 82% at this pace |
Hypothetical example for illustration only, not an offer. The estimated APR changes with repayment speed: at the same pace without the $1,500 fee it would be about 73%.
Notice how a fee withheld at funding raises the real cost even though the factor rate is unchanged. Run your own numbers in the MCA calculator.
Typical MCA requirements for New York businesses
State law sets disclosure rules, not approval rules. Funders weigh the same factors everywhere.
- Time in business: often 6+ months; some programs review from 3 to 4 months
- Monthly deposits: often $10,000+ in true business revenue
- Bank activity: regular deposits and few or no negative days or returned items
- Existing advances: disclosed, and not already taking a large share of deposits
- Credit: mid-600 profiles commonly considered; some files below 600 reviewed
Typical ranges, not promises; each funder sets its own minimums. See the full MCA requirements checklist and the document checklist.
Related guides and tools
Frequently asked questions
Q01Do merchant cash advances have to disclose an APR in New York?
Yes, for offers within the law's scope. New York's Commercial Finance Disclosure Law requires sales-based financing providers to disclose an estimated APR, calculated under federal Regulation Z rules and based on projected sales, along with the finance charge, total repayment, estimated term, and payment amounts.
Q02What size of financing does the New York disclosure law cover?
Specific offers of commercial financing up to $2,500,000, subject to the exemptions in the law and the DFS regulation.
Q03Can an MCA funder use a confession of judgment in New York?
Since August 30, 2019, CPLR 3218 generally allows a confession of judgment to be entered in New York only against a defendant who lived in New York when signing it. Have an attorney review any agreement that includes one.
Q04Who regulates merchant cash advances in New York?
The New York State Department of Financial Services administers the commercial finance disclosure requirements. MCAs are generally not regulated as loans, so usury limits may not apply in the same way.
Q05What do I need to get a merchant cash advance in New York?
The same as anywhere: usually several months in business, steady monthly deposits, recent business bank statements, a photo ID, and a voided business check. Requirements vary by funder.
Q06Is SmallByzLoans a lender?
No. SmallByzLoans is a funding marketplace. We review your request and match you with funding providers, and the provider makes the decision and provides the required disclosures.
Sources and further reading
- New York Financial Services Law ยง 803, sales-based financing disclosures, New York State Senate
- 23 NYCRR Part 600, commercial financing disclosure regulation, New York State Department of Financial Services
- DFS adopts commercial financing disclosure regulation (February 1, 2023), New York State Department of Financial Services
- New Limitations on Confessions of Judgment in New York, Seyfarth Shaw LLP
- Business guidance for small businesses, Federal Trade Commission
Financial disclaimer: This page is general information about New York law as of October 2026, not legal, financial, or tax advice. Laws and regulations change; confirm current requirements with the regulator or an attorney. SmallByzLoans is a funding marketplace, not a lender. Approval, amounts, and terms are set by each funding provider.
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