Plain-language disclosure
All required disclosures must be presented in clear, easy-to-read language before an agreement is finalized — no fine print or hidden clauses.
CONNECTICUT • MCA LAW
Connecticut SB 1032
Connecticut SB 1032 requires MCA providers, factoring companies, and commercial lenders to disclose key terms, costs, and repayment details before entering any commercial financing agreement of $250,000 or less.
State-specific guidanceDisclosure requirementsActionable review
EFFECTIVE
July 1, 2024
COVERS
Merchant cash advance companies, factoring companies, online and alternative lenders, and brokers facilitating commercial financing in Connecticut. Banks, credit unions, secured commercial loans, and financings above $250,000 are exempt.
ENFORCED BY
Connecticut Department of Banking.
KEY PROVISIONS
What SB 1032 requires
Total funding and repayment amounts
Providers must show the actual dollars disbursed to the business and the total dollars that will be repaid over the life of the deal.
Total dollar cost of financing
All fees, interest, and charges must be combined into a single total-cost figure so borrowers see the full price of capital.
APR or equivalent cost metric
An annualized rate or equivalent comparison metric is required, giving Connecticut businesses a standardized way to compare competing offers.
Prepayment and reconciliation terms
Disclosures must spell out how paying early affects total cost and how slower sales trigger reconciliation under a sales-based financing contract.
Broker registration
Brokers arranging covered financing in Connecticut are subject to registration and conduct rules under the Department of Banking.
PENALTIES
What happens if a provider doesn't comply?
Violations can result in civil penalties, revocation of registration, and regulatory enforcement actions. Non-compliant agreements may also be subject to legal challenges that give borrowers additional leverage to dispute unfair terms.
IF YOU'VE BEEN AFFECTED
What borrowers can do now
- Locate the written SB 1032 disclosure you should have received before signing any Connecticut MCA or factoring contract.
- Verify that your funded amount, total repayment, APR, and payment frequency were all disclosed in plain language.
- If your financing is $250,000 or less and key disclosures are missing, document the gaps in writing.
- Request a complimentary MCA contract audit from Debt Consultants Group to evaluate compliance violations and consolidation options.
Think your MCA may violate this law?
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