Virginia HB 1027 — The MCA Loan Disclosure Law Every Small Business Should Know

August 28, 2025
Ben Wilson

HB 1027 is Virginia’s step toward stronger MCA Loan Disclosure Laws, designed to protect small businesses from the hidden costs and confusing terms often found in Merchant Cash Advance contracts. For years, MCAs have been marketed as quick funding solutions, but many borrowers discovered too late that daily withdrawals, stacked loans, and unclear repayment schedules drained their cash flow. By requiring lenders to disclose repayment amounts, fees, and payment terms upfront, HB 1027 gives Virginia business owners the transparency they need to make informed financial decisions and avoid predatory financing traps.

What Is Virginia HB 1027?

HB 1027 is Virginia’s response to the growing concerns around MCA practices. The bill requires MCA providers and other commercial financers to present borrowers with standardized disclosures before finalizing agreements.

This includes:

Total repayment amounts
Breakdown of fees and costs
Payment frequency and method
Any applicable prepayment penalties

By mandating these disclosures, Virginia aims to ensure that small businesses can make informed decisions instead of being caught off guard by hidden terms.

Why HB 1027 Matters for Small Businesses

For years, business owners in Virginia faced the same risks seen nationwide — unclear MCA contracts, aggressive repayment schedules, and stacked loans that drained cash flow. HB 1027 changes that by requiring transparency, giving borrowers the information they need to evaluate offers and avoid predatory agreements.

With clearer disclosures, small businesses can:

Compare multiple financing offers
Understand the real cost of borrowing
Protect themselves from misleading terms

How HB 1027 Fits Into the Bigger Picture

Virginia HB 1027 joins a growing list of MCA Loan Disclosure Laws across the U.S., including California SB 1235, Texas HB 700, and New York S5470-B. Each of these laws shares the same mission: to bring fairness and clarity to an industry that has historically operated with little oversight.

State

Law

Key Feature

California

SB 1235

First state law requiring standardized MCA disclosures

Texas

HB 700

Plain-language repayment terms and fee breakdowns

New York

S5470-B

APR-style disclosures + detailed repayment transparency

Virginia

HB 1027

Mandatory clear disclosures before MCA contracts

The Bottom Line

Virginia HB 1027 requires MCA providers to disclose repayment amounts, fees, and terms upfront.
It strengthens protections for small businesses by preventing predatory contracts.
Along with California, Texas, and New York, Virginia is part of a growing national trend to regulate MCA financing with MCA Loan Disclosure Laws.

S5470-B FAQ

What is Virginia HB 1027?

Virginia HB 1027 is a state law requiring Merchant Cash Advance providers and other commercial lenders to give borrowers clear, standardized disclosures. It’s part of a growing movement of MCA Loan Disclosure Laws that protect small businesses from predatory lending practices.

Who does HB 1027 apply to?

The law applies to MCA companies, factoring firms, online lenders, and certain non-bank financing providers that issue contracts to small businesses in Virginia.

What disclosures are required under HB 1027?

Lenders must disclose total repayment amounts, fees, payment terms, frequency of collections, and any prepayment penalties. These requirements help borrowers understand the full cost of financing before signing.

Why is HB 1027 important for small businesses?

Many small business owners have been caught off guard by hidden fees or daily withdrawals tied to MCA contracts. HB 1027 improves transparency so borrowers can compare offers and avoid stacked or misleading agreements.

How does HB 1027 compare to other MCA Loan Disclosure Laws?

California’s SB 1235 was the first to mandate standardized disclosures, Texas HB 700 requires plain-language repayment details, and New York S5470-B added APR-style cost comparisons. Virginia HB 1027 aligns with these efforts, further strengthening borrower protections nationwide.

When did Virginia HB 1027 take effect?

HB 1027 was signed into law to increase oversight of MCA providers in Virginia. It is now in effect and applies to all new financing contracts going forward.

Does S5470-B eliminate the risks of MCAs?

No. While HB 1027 makes MCA terms clearer, these financing products can still be expensive and risky. The law helps small businesses make better decisions but doesn’t remove the need for careful contract review.

Debt Consultants Group Insight

We monitor state-by-state MCA Loan Disclosure Laws like Virginia’s HB 1027 to protect borrowers from predatory terms and help them negotiate fair settlements. If you’ve been offered an MCA in Virginia — or you’re weighed down by stacked contracts — understanding these new protections is your first step toward financial relief.