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Virginia's Commercial Financing APR Disclosure Bill

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Funders Weigh in on the New Disclosure Law in Virginia

August 10, 2022
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Show Us Your Deals“I think there are pros and cons on this law,” said Boris Kalendarev, CEO at Specialty Capital, in regards to the recently enacted sales-based financing disclosure law in Virginia. “I’m on the pro side and I think first and foremost it allows the good funders and the good brokers in the space to operate in the right manner.”

The law technically went into effect on July 1st, shaking things up for funding providers and brokers alike, particularly through a set of uniform disclosures that are required every time a contract is put in front of a Virginia-based business.

“It holds a broker more responsible for the transaction that they’re going to complete,” said Sharmylla Siew, Senior Underwriter at Lending Valley. “It builds a deeper bond between the broker and the merchant. And it also creates a better bond between the broker and the funder.”

Echoing Siew’s perspective, Kalendarev also believes that being clear creates an honest business space for the broker, merchant, and funder.

“I think transparency is really the right way to run this business. Let’s try to make sure there’s even more transparency,” said Kalendarev.

One intent behind the law is to provide the business customer with all of the pertinent information in a digestible format. Notably, this includes the commission that a broker may be receiving from the funder.

contract“I do believe that it should be fully transparent on both sides to understand the transaction in full,” said Dylan J. Howell, CEO of Liquidibee. “The merchant should understand that the broker is getting compensated. And if he decides that the broker deserves an additional commission on top of what he’s getting paid from the funder, well, that’s an informed decision between the merchant and broker to come to an agreement with.”

Howell Suggested that some of what is required would be expected in other types of deals.

“If you would go out and buy a $500,000 house, you get to the closing table and you look at the bill, it says it’s $545,000, but the purchase price is 500,000, you would want a reconciliation page to show where that 45,000 of additional capital is going,” Howell said. “And it’s no different than in this transaction, in my opinion.”

Banks and credit unions were exempt from the law but some view targeted regulations like this one as a way to raise the bar and credibility of sales-based financing products in general.

“Merchants who wouldn’t have considered an MCA as a practical form of funding in the past may decide to explore this avenue knowing that the industry is being held to a higher standard of practice,” Howell said.

Siew, of Lending Valley, echoed same.

“I am actually very excited about the new regulations, and I feel that it would make a huge impact on the MCA industry,” she said.

Virginia Disclosure Law Quietly Goes Into Effect

July 6, 2022
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Virginia Capitol Building in RichmondOn July 1st, Virginia’s “sales-based financing” disclosure law quietly went into effect. The Delegate from Virginia that introduced it in the first place, Kathy Tran, marked the occasion by retweeting a caucus announcement that it was live. Elsewhere, it was hardly mentioned. It was even absent from the Official Code of Virginia where it was supposed to be ceremoniously entered on July 1st. The State insists that its omission is just a glitch.

“There have been significant technical difficulties during the 2022 code upload process,” reads a notice on the Virginia State Law Portal. “Due to these difficulties, the portal does not currently reflect the changes to enacted law. The Division of Legislative Automated Systems and the publisher are working diligently to resolve these issues as quickly as possible. Once the data is obtained from the publisher in the correct format, the standard quality check of the entire body of law that went into effect July 1 will be conducted.”

The law focuses primarily on disclosures. Sounds simple enough, but in the preceding weeks the draft disclosure form was met with some resistance by potentially covered parties because of how little time there was to integrate it into their systems and processes. Regardless, at least one small business funding company told deBanked off the record that ambiguous language and terms in the law had led to the decision to cease doing business in the State of Virginia, at least for now. Their focus is shifting toward compliance with the upcoming California and New York disclosure laws where the population pools are larger and the soon-to-be enacted requirements are seemingly more complex. Utah too will soon implement its own version of a disclosure law.

For commercial finance brokers, the defining elements of the Virginia law are that commissions earned will have to be disclosed to customers and that they’ll have to register their businesses with the State to even continue doing business there.

Time’s Almost Up: Are You Ready to Comply With the New Virginia Disclosure Law?

June 26, 2022
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Virginia Capitol Building in RichmondRemember when Virginia passed a landmark sales-based financing law? Well, it’s supposed to go into effect on July 1st.

This is a draft of what the disclosure form is supposed to look like, though with only days left to begin compliance, it hasn’t even been 100% finalized.

Notably, funders will have to begin disclosing to merchants the amount of compensation being paid to the broker in connection with a deal. Also, by November 1st, funders and brokers will have to register their business with the State if they wish to continue working with Virginia-based businesses, a process that would include a background check and registration fees.

Please consult an attorney for official guidance on compliance.

Connecticut’s New Law Took Aim at Prejudgment Remedies

September 1, 2023
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Although Connecticut Governor Ned Lamont signed SB1032 into law this summer, covered parties have until July 1, 2024 to start complying. On its face it was a disclosure bill, but as previously mentioned there was a twist, it amends chapter 903a of the general statutes, the code governing prejudgment remedies.

Specifically it says:

No commercial financing contract entered into on or after July 1, 2024, shall contain any provision waiving a recipient’s right to notice, judicial hearing or prior court order under chapter 903a of the general statutes in connection with the provider obtaining any prejudgment remedy, including, but not limited to, attachment, execution, garnishment or replevin, upon commencing any litigation against the recipient. Any such provision in a commercial financing contract entered into on or after July 1, 2024, shall be unenforceable.


Similar to Virginia, brokers will be required to register in order to broker deals to any Connecticut merchant.

Georgia Governor Signs Commercial Financing Disclosure Law

May 9, 2023
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Georgia’s governor signed the state’s commercial financing disclosure bill into law as anticipated. The full text is available here. It is scheduled to go into effect on January 1, 2024. Georgia’s new law is merely the latest in a series aimed at the small business and commercial financing industries.

Others include:

A Side Effect of New State Laws? Registry Lookups

April 21, 2023
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dailyfunderDailyFunder, the original funder’s forum since 2012, will include links to governmental registries on its site. Among the first two to be added are California and Virginia. The purpose is to serve as a reference point to verify a funder or lender’s claims. Additional states like Utah and New York will follow. Brokers and referral partners should use all the tools at their disposal to conduct due diligence on whomever they are considering to work with.

“‘The ‘I saw them in the courts’ or ‘I saw them in banks’ method isn’t exactly proof of legitimacy,'” a post on the forum stated.

DailyFunder also recently shared that it is experiencing a rather vibrant burst of interest. The forum logged 2.3 million page views in 2022 and this year is on pace for 3 million, it claims.

All Registered Sales-based Financing Providers in Virginia (As of 3-29-23)

April 2, 2023
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Is the revenue-based financing provider you do business with registered to operate in Virginia? On July 1, 2022, Virginia’s commercial financing disclosure law went into effect and with that the necessity to register one’s business. As of March 29, 2023, 101 companies had registered. This is the official list of registered sales-based financing providers as of that date (yellow means it has been added since our last update):

  • Advance Servicing Inc.
  • Accredited Business Solutions LLC dba The Accredited Group
  • Advance Funds Network LLC dba Advance Funds Network
  • AdvancePoint Capital LLC dba advancepoint
  • Ally Merchant Services LLC
  • Alpine Funding Partners, LLC
  • Business Capital LLC
  • Byzfunder NY LLC dba Tandem dba Nano-FI
  • Bridge Capital Services, LLC
  • CFG Merchant Solutions, LLC
  • Clarify Capital II LLC dba Clarify Capital
  • Cloudfund VA LLC dba Cloudfund LLC
  • Capflow Funding Group Managers LLC
  • Clear Finance Technology (U.S.) Corp. dba Clearco
  • Coast Premier LLC dba Coast Funding
  • Commercial Servicing Company, LLC
  • Corporate Lodging Consultants, Inc.
  • Crown Funding Source LLC dba Crown Funding Source
  • Diesel Funding LLC
  • Direct Capital Source Inc.
  • Dealstruck Capital LLC
  • EBF Holdings, LLC
  • Essential Funding Group Inc
  • Errant Ventures LLC
  • FC Capital Holdings, LLC FundCanna
  • Fidelity Funding Group LLC
  • Front Capital LLC
  • Finova Capital, LLC
  • Fintegra, LLC
  • First Data Merchant Services LLC
  • First Path Capital Ventures LLC dba First Path Capital
  • FleetCor Technologies Operating Company, LLC
  • Flexibility Capital Inc.
  • Fora Financial East LLC
  • Forward Financing LLC
  • Fox Capital Group Inc.
  • Fundamental Capital LLC
  • Funding Metrics, LLC dba Quick Fix Capital
  • Good Funding, LLC
  • Granite Merchant Funding, LLC
  • Invision Funding LLC
  • Itria Ventures LLC
  • Jaydee Ventures, LLC dba 1 West Capital dba 1 West Commercial
  • Kapitus LLC
  • Knight Capital Funding III, LLC
  • Lexington Capital Holdings Ltd
  • LG Funding LLC
  • Legend Advance Funding II, LLC dba Legend Funding
  • Liberis US Inc.
  • Libertas Funding, LLC
  • Liquidibee 1 LLC dba Liquidibee LLC dba Altfunding.com
  • Loanability, Inc.
  • Millstone Funding Inc.
  • National Funding, Inc.
  • Nav Technologies, Inc.
  • Orange Advance LLC
  • Pearl Alpha Funding, LLC
  • Pearl Beta Funding, LLC
  • Pearl Delta Funding, LLC
  • Proto Financial Corp.
  • PWCC Marketplace, LLC
  • Parafin, Inc.
  • PayPal, Inc.
  • Payability Commercial Factors, LLC
  • Pinnacle Business Funding LLC dba Custom Capital USA dba EnN OD Capital
  • Platform Funding LLC
  • Prosperum Capital Partners LLC dba Arsenal Funding
  • QFS Capital LLC
  • RFG USA Inc.
  • Rival Funding, LLC
  • Riverpoint Financial Group Inc.
  • Rocket Capital NY LLC
  • ROKFI LLC
  • Ruby Capital Group LLC
  • Rapid Financial Services, LLC
  • Reliant Services Group, LLC
  • Retail Capital LLC dba Credibly
  • Revenued LLC
  • Rewards Network Establishment Services Inc.
  • Secure Capital Solutions Inc.
  • Sky Bridge Business Funding, LLC
  • SMB Compass LLC dba SMB Compass
  • Sunrise Funding LLC
  • Santa Barbara Tax Products Group, LLC
  • SellersFunding Corp.
  • Sharpe Capital, LLC
  • Shine Capital Group LLC
  • Shopify Capital Inc.
  • Shore Funding Solutions Inc.
  • Streamline Funding, LLC
  • Stripe Brokering, Inc.
  • The LCF Group, Inc.
  • Unique Funding Solutions LLC
  • United Capital Source Inc.
  • Upfront Rent Holdings LLC
  • Upper Line Capital LLC
  • Vader Servicing, LLC
  • Velocity Capital Group LLC
  • Vivian Capital Group LLC
  • Vox Funding, LLC
  • ZING Funding I, LLC

All Registered Sales-based Financing Providers in Virginia (List)

March 11, 2023
Article by:

Is the revenue-based financing provider you do business with registered to operate in Virginia? On July 1, 2022, Virginia’s commercial financing disclosure law went into effect and with that the necessity to register one’s business. As of March 8, 2023, this is the official list of registered sales-based financing providers:

  • Advance Servicing Inc.
  • Accredited Business Solutions LLC dba The Accredited Group
  • Advance Funds Network LLC dba Advance Funds Network
  • AdvancePoint Capital LLC dba advancepoint
  • Ally Merchant Services LLC
  • Alpine Funding Partners, LLC
  • Business Capital LLC
  • Byzfunder NY LLC dba Tandem dba Nano-FI
  • Bridge Capital Services, LLC
  • CFG Merchant Solutions, LLC
  • Clarify Capital II LLC dba Clarify Capital
  • Cloudfund VA LLC dba Cloudfund LLC
  • Capflow Funding Group Managers LLC
  • Clear Finance Technology (U.S.) Corp. dba Clearco
  • Coast Premier LLC dba Coast Funding
  • Commercial Servicing Company, LLC
  • Corporate Lodging Consultants, Inc.
  • Crown Funding Source LLC dba Crown Funding Source
  • Diesel Funding LLC
  • Direct Capital Source Inc.
  • Dealstruck Capital LLC
  • EBF Holdings, LLC
  • Essential Funding Group Inc
  • Errant Ventures LLC
  • FC Capital Holdings, LLC FundCanna
  • Fidelity Funding Group LLC
  • Front Capital LLC
  • Finova Capital, LLC
  • Fintegra, LLC
  • First Data Merchant Services LLC
  • FleetCor Technologies Operating Company, LLC
  • Flexibility Capital Inc.
  • Fora Financial East LLC
  • Forward Financing LLC
  • Fox Capital Group Inc.
  • Fundamental Capital LLC
  • Funding Metrics, LLC dba Quick Fix Capital
  • Good Funding, LLC
  • Granite Merchant Funding, LLC
  • Invision Funding LLC
  • Itria Ventures LLC
  • Jaydee Ventures, LLC dba 1 West Capital dba 1 West Commercial
  • Kapitus LLC
  • Knight Capital Funding III, LLC
  • Lexington Capital Holdings Ltd
  • LG Funding LLC
  • Legend Advance Funding II, LLC dba Legend Funding
  • Liberis US Inc.
  • Libertas Funding, LLC
  • Liquidibee 1 LLC dba Liquidibee LLC dba Altfunding.com
  • Loanability, Inc.
  • Millstone Funding Inc.
  • National Funding, Inc.
  • Nav Technologies, Inc.
  • Pearl Alpha Funding, LLC
  • Pearl Beta Funding, LLC
  • Pearl Delta Funding, LLC
  • Proto Financial Corp.
  • PWCC Marketplace, LLC
  • Parafin, Inc.
  • PayPal, Inc.
  • Payability Commercial Factors, LLC
  • Pinnacle Business Funding LLC dba Custom Capital USA dba EnN OD Capital
  • Platform Funding LLC
  • Prosperum Capital Partners LLC dba Arsenal Funding
  • QFS Capital LLC
  • RFG USA Inc.
  • Rival Funding, LLC
  • Riverpoint Financial Group Inc.
  • Rocket Capital NY LLC
  • ROKFI LLC
  • Ruby Capital Group LLC
  • Rapid Financial Services, LLC
  • Reliant Services Group, LLC
  • Retail Capital LLC dba Credibly
  • Revenued LLC
  • Rewards Network Establishment Services Inc.
  • Secure Capital Solutions Inc.
  • Sky Bridge Business Funding, LLC
  • SMB Compass LLC dba SMB Compass
  • Santa Barbara Tax Products Group, LLC
  • SellersFunding Corp.
  • Sharpe Capital, LLC
  • Shine Capital Group LLC
  • Shopify Capital Inc.
  • Shore Funding Solutions Inc.
  • Streamline Funding, LLC
  • Stripe Brokering, Inc.
  • The LCF Group, Inc.
  • United Capital Source Inc.
  • Upfront Rent Holdings LLC
  • Upper Line Capital LLC
  • Vader Servicing, LLC
  • Velocity Capital Group LLC
  • Vivian Capital Group LLC
  • Vox Funding, LLC
  • ZING Funding I, LLC
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