Clearwater Capital Group (“Clearwater,” “we,” “us”) is committed to transparent commercial financing. Several US states have enacted commercial financing disclosure laws that require specific information be provided to applicants before or at the time of an offer. This page summarizes those laws and our compliance posture. State-specific disclosure documents, where required, are delivered separately alongside each written funding offer before signing.
States with active commercial financing disclosure laws
- California — SB 1235 / Cal. Fin. Code § 22800 et seq.
- New York — Commercial Finance Disclosure Law (CFDL)
- Utah — Commercial Financing Registration and Disclosure Act
- Virginia — Code of Virginia § 6.2-2228 et seq.
- Georgia — Commercial Financing Disclosure Act
- Florida — Commercial Financing Disclosure Law
- Connecticut — Commercial Financing Disclosure Law
- Kansas — Amendments to the Kansas Consumer Credit Code
- Missouri — Commercial Financing Disclosure Act
California
SB 1235 / California Commercial Financing Disclosure Regulations — effective December 9, 2022
California requires providers of commercial financing (including merchant cash advances, lines of credit, and asset-based loans) to deliver standardized disclosures before consummation of a transaction. Disclosures include the total amount of funds provided, total repayment amount, annual percentage rate (APR), finance charge, payment amount and frequency, term, prepayment policy, and specific per-product fields.
For California transactions, Clearwater delivers the required SB 1235 disclosure form with each offer, signed and acknowledged before the transaction is consummated. All APR disclosures are calculated consistent with the methodology prescribed by Cal. Code Regs. tit. 10, § 955 et seq.
New York
New York Commercial Finance Disclosure Law (CFDL) — 23 NYCRR Part 600 — effective August 1, 2023
The New York CFDL applies to commercial financing transactions of $2.5 million or less to recipients whose business is principally directed or managed from New York. Required disclosures include the total amount of the commercial financing, disbursement amount, finance charge, APR, total repayment amount, estimated term, payment schedule, prepayment policy, and reconciliation policy for sales-based financing.
For New York transactions, Clearwater delivers a signed CFDL disclosure with each offer using the format prescribed by the New York Department of Financial Services.
Utah
Utah Commercial Financing Registration and Disclosure Act — Utah Code § 7-27 — effective January 1, 2023
Utah requires both registration of commercial financing providers with the Utah Department of Financial Institutions and standardized disclosures at the time of offer. Required content includes total amount financed, total cost, APR, payment frequency, and — for sales-based financing — reconciliation language.
Clearwater and its partner funders maintain active registration in Utah where required and deliver written disclosures with each Utah offer.
Virginia
Virginia Code § 6.2-2228 through § 6.2-2240 — effective July 1, 2022
Virginia's commercial financing disclosure law applies to sales-based financing and other commercial financing transactions of $500,000 or less where the recipient has a principal place of business in Virginia. Required disclosures mirror those of California and New York.
Clearwater delivers the required Virginia disclosure form with offers to Virginia-based applicants.
Georgia
Georgia Commercial Financing Disclosure Act — O.C.G.A. § 7-2 — effective January 1, 2024
Georgia requires registration of commercial financing brokers and specific disclosures on offers. Georgia's law differs slightly from other states in its treatment of broker compensation — broker fees must be separately disclosed.
Clearwater complies with Georgia registration and disclosure requirements for all Georgia-based applicants.
Florida
Florida Commercial Financing Disclosure Law — effective July 1, 2023
Florida's commercial financing disclosure law requires a standardized disclosure be delivered with offers for sales-based and other commercial financing products.
Connecticut
Connecticut Commercial Financing Disclosure Law — effective July 1, 2024
Connecticut requires registration of commercial financing providers and brokers with the Connecticut Department of Banking and specific disclosure contents with each offer.
Kansas
Amendments to the Kansas Consumer Credit Code — effective January 1, 2024
Kansas amendments extend specific disclosure requirements to commercial financing transactions under $250,000. Disclosures include amount financed, total cost, and payment details.
Missouri
Missouri Commercial Financing Disclosure Act — effective January 1, 2025
Missouri's disclosure act requires standardized disclosures on commercial financing offers to Missouri-based businesses. The content is substantially similar to other state regimes.
APR disclosure methodology
Where a state requires APR disclosure, Clearwater calculates APR using the actuarial method consistent with Regulation Z (12 CFR Part 1026, Appendix J) as adapted for sales-based financing by the state. For sales-based financing products, APR is calculated using an estimated term based on the average historical repayment pattern of similar offers.
Reconciliation rights (sales-based financing)
For sales-based financing products (where repayment is tied to a percentage of the recipient's future sales), Clearwater offers reconciliation as required by applicable state law. If the recipient's sales decline materially, the recipient may request reconciliation of the daily or weekly withholding amount to reflect the recipient's actual sales. Reconciliation procedures are described in full in each funding agreement.
Other states
Additional states have introduced similar legislation; our disclosure practices are updated as these laws take effect. If you are applying from a state not listed above, standard commercial financing best practices still apply.
Questions about disclosures
If you have questions about state disclosures or want to receive a sample disclosure document before applying, email compliance@clearwatercapitalgrp.com.