Texas HB 700 — MCA Loan Disclosure & Borrower Protections [2025]

August 18, 2025
Ben Wilson

Merchant Cash Advances (MCAs) — now directly addressed by Texas House Bill: HB 700 — have become a quick but dangerous source of capital for many small businesses. While they promise fast funding, the reality is often harsh: daily withdrawals, hidden fees, and confusing terms that leave borrowers stacked under multiple loans.

Recognizing this growing problem, several states have stepped in with new laws designed to bring transparency and fairness to commercial financing. In Texas, that effort has taken shape as HB 700, which forces MCA providers to clearly disclose costs and repayment terms so business owners know exactly what they’re signing up for.

For anyone struggling with MCA debt in Texas, understanding HB 700 is not just about compliance — it’s about knowing your rights, protections, and leverage points when dealing with lenders.

What Is Texas HB 700?

Texas HB 700 is a state law, effective September 1, 2025, that requires providers of certain commercial financing products — including merchant cash advances (MCAs) — to give borrowers clear, standardized disclosures before they sign an agreement.

The law aims to make financing terms transparent so business owners can compare costs, spot hidden fees, and avoid debt traps — a critical safeguard for those caught in stacked MCA loans.

Who HB 700 Apply To?

Covered Providers:
Any lender, broker, or MCA company offering sales-based financing or certain commercial loans in Texas.
Borrower Scope:
Primarily Texas-based businesses and individuals seeking financing for commercial purposes.

What Must Be Disclosed Under HB 700?

Before you sign, MCA providers must give you a written disclosure including:

Total Financing Amount – the total funds you’ll receive.
Finance Charge – total dollar cost of the loan.
Total Repayment Amount – the total you’ll pay over time.
Estimated Term – how long it will take to repay.
Payment Amount & Frequency – daily/weekly payment details.
Annual Percentage Rate (APR) – standardized cost measure.
Reconciliation & Prepayment Terms – how adjustments work if sales slow or you pay early.

Why HB 700 Matters for Stacked MCA Borrowers

If you already have multiple MCA loans, this house bill won’t erase your current debt — but it changes the game for any new agreements:

You can compare offers apples-to-apples before signing.
Hidden costs are harder for lenders to bury.
If a lender fails to disclose properly, it can be a legal leverage point in negotiations.

Penalties for Non-Compliance

Providers who fail to follow disclosure rules can face civil penalties and enforcement actions from the Texas regulator. This may open doors for borrowers to challenge unfair contracts.

HB-700 FAQ

When does Texas HB 700 take effect?

Texas HB 700 takes effect on September 1, 2025. Any new merchant cash advance (MCA) or commercial financing agreements signed after that date must include the required disclosures.

Who has to comply with HB 700?

MCA providers, brokers, and other lenders offering sales-based financing or certain commercial loans in Texas must comply. Borrowers themselves don’t have filing requirements, but they gain new protections.

What disclosures does HB 700 require?

Providers must clearly present:

Total funding amount
Finance charge (total cost of the loan)
Total repayment amount
Payment schedule and frequency
Estimated repayment term
Annual Percentage Rate (APR) or estimated cost of financing
Policies for reconciliation and prepayment

How does HB 700 help borrowers with stacked MCA loans?

HB 700 makes it harder for providers to hide fees or bury repayment terms. While it doesn’t erase existing stacked debt, it gives you stronger footing when comparing offers, negotiating with lenders, or spotting violations that could work in your favor.

What happens if a provider doesn’t follow HB 700?

Non-compliant providers face civil penalties and enforcement actions by Texas regulators. For borrowers, this may provide leverage in disputing or renegotiating contracts.

Does HB 700 apply to individuals, or only businesses?

HB 700 covers commercial financing transactions. That typically means businesses, but many MCA borrowers are sole proprietors — so yes, individuals operating businesses in Texas can benefit.

Do I still need Debt Consultants Group if HB 700 exists?

Yes. HB 700 improves transparency, but it doesn’t solve existing debt traps. If you’re already buried in stacked MCAs, our team helps you review agreements, challenge non-compliance, and negotiate settlements that get you breathing room.

Debt Consultants Group Insight

We monitor state-by-state MCA laws like HB 700 to protect borrowers from predatory terms and help negotiate settlements. If you’ve been offered an MCA in Texas — or you’re buried under stacked loans — understanding these new rights is your first step toward relief.