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Senate Bill 1032 (SB 1032)

The MCA Loan Disclosure Law You Need to Know — Connecticut SB 1032

Merchant Cash Advances (MCAs) can seem like a fast solution for small businesses in need of cash — but for many, they quickly turn into stacked debts, high fees, and daily withdrawals that drain profitability.

To protect business owners from these predatory lending practices, several states have stepped in with new laws requiring clearer disclosure and accountability from financing companies. In Connecticut, that effort became law through Senate Bill 1032 (SB 1032) — legislation that sets new standards for transparency and fairness in sales-based financing.

If your business has been hit with stacked MCA loans, understanding SB 1032 can help you recognize your rights, identify non-compliant lenders, and take steps toward financial recovery.

What Is Connecticut SB 1032?

Connecticut SB 1032, officially titled An Act Concerning Small Business Truth in Financing, took effect on July 1, 2024. It requires lenders and MCA providers to disclose key terms, costs, and repayment details before entering into commercial financing agreements of $250,000 or less.

This law is part of a growing movement across the country — including states like Texas (HB-700) and California (SB-1235) — to ensure that small businesses receive the same transparency protections consumers have long enjoyed.

Who Must Comply With SB 1032

Covered providers include:

  • Merchant cash advance (MCA) companies

  • Factoring companies

  • Online and alternative lenders

  • Brokers facilitating commercial financing

Exempt providers include:

  • Banks and credit unions

  • Lenders making secured commercial loans

  • Financing above $250,000

If you operate or borrow in Connecticut, SB 1032 ensures that your MCA provider must disclose exactly what you’re paying for and how much it will cost over time.

What Must Be Disclosed Under SB 1032

Before any financing agreement is finalized, MCA providers must clearly present a written disclosure that includes:

  • Total Funding Amount – the actual funds you’ll receive

  • Total Dollar Cost of Financing – all fees, interest, and charges combined

  • Total Repayment Amount – what you’ll ultimately pay back

  • Payment Frequency and Method – daily, weekly, or fixed percentage of sales

  • Estimated Term or Duration – how long repayment is expected to take

  • Prepayment and Reconciliation Terms – how paying early or slower sales affect repayment

  • APR or Equivalent Cost Metric – standardized comparison across offers

These disclosures must be presented in plain, easy-to-read language — no more fine print or hidden clauses.

Penalties for Non-Compliance

The Connecticut Department of Banking oversees enforcement of SB 1032. Lenders or MCA providers that violate the law can face:

  • Civil penalties

  • Revocation of registration

  • Regulatory enforcement actions

Non-compliant agreements could also become subject to legal challenges — giving borrowers more options to fight unfair terms.

Debt Consultants Group Insight

At Debt Consultants Group, we help business owners who have been overwhelmed by stacked MCA loans or deceptive lending practices. Laws like Connecticut SB 1032 are opening the door to fairer financing — and we help you take advantage of those protections.

If you’re based in Connecticut and struggling to manage multiple MCA payments, our team can review your contracts, check for compliance violations, and develop a custom consolidation plan to reduce your payments and regain control.

📩 Get Your Free MCA Loan Review in Connecticut
If you’ve taken a merchant cash advance or alternative loan, Debt Consultants Group can analyze your agreements for SB 1032 compliance and help you discover ways to reduce or consolidate your payments.

👉 Request a Free Consultation

 

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