Florida's Commercial Financing Disclosure Law: six numbers, no APR, and rules for brokers

Florida gives you six numbers and no annual percentage rate. That is the whole shape of the Florida Commercial Financing Disclosure Law, and knowing it saves you from assuming a protection you do not have.

Scope

Florida Statutes § 559.9612 sets the boundary: the part applies to any commercial financing transaction consummated on or after 1 January 2024. Under § 559.9611 a commercial financing transaction is a commercial loan, an accounts receivable purchase transaction, or a commercial open-end credit plan, where the proceeds go to a business rather than to personal, family or household use. A provider is a person who consummates more than five commercial financing transactions with a business located in Florida in any calendar year — including someone arranging transactions through an online lending platform with a depository institution.

Note what the definitions do not say. Florida does not define sales-based financing as a separate category. A merchant cash advance structured as a purchase of receivables generally lands inside the accounts receivable purchase transaction definition, but the statute does not carve out a bespoke set of rules for it the way New York and Virginia do.

The exemptions

Section 559.9612 excludes federally insured depository institutions and their affiliates, holding companies, subsidiaries and service corporations under common ownership; lenders regulated under the Farm Credit Act of 1971; transactions secured by real property or structured as leases; purchase-money obligations; motor vehicle dealer and rental company transactions of $50,000 or more, plus vendor financing for products the vendor makes or licenses; money transmitters licensed under chapter 560 or by another state; providers completing no more than five commercial financing transactions in the state in a twelve-month period; and transactions over $500,000.

What you get

Section 559.9613 requires written disclosure at or before consummation. Only one disclosure is required per transaction, and modifying an existing agreement does not trigger a new one. The provider must give you:

1. The total amount of funds provided to the business under the agreement.
2. The total amount of funds actually disbursed, if less, after fees, prior balances or third-party payments.
3. The total amount to be repaid to the provider.
4. The total dollar cost — the difference between (1) and (3).
5. The payment structure: specific amounts and frequency, or, where payments vary, the estimated initial payment, the calculation methodology, and the circumstances that make payments change.
6. Any costs or discounts on prepayment, with a reference to the relevant contract provision.

For a commercial financing facility, the provider may base the disclosure on a hypothetical $10,000 receivable rather than disclosing every draw.

Two features of that timing deserve attention. "At or before consummation" is not the same as "when a specific offer is extended". In New York and Virginia the sheet arrives when you are being sold to. In Florida it can arrive at the closing table, which is a worse moment to discover the total cost. Ask for the numbers in writing earlier and treat a refusal as information.

Brokers

Section 559.9614 sets rules for brokers rather than registering them. A broker may not assess, collect or solicit an advance fee from a business for brokerage services. The statute preserves one narrow exception: you may pay for actual services needed to apply, such as a credit check or an appraisal of security, if the payment is by check or money order made out to a party independent of the broker.

A broker also may not make a false or misleading representation or omit a material fact, engage in any act operating as fraud or deception, or advertise without disclosing an actual address and telephone number, including any forwarding service used.

If a broker asks you to wire a fee to their own account before anything is funded, that is precisely the conduct the section is written about.

Enforcement

Section 559.9615 gives the Attorney General exclusive authority to enforce this part. Penalties run to $500 per incident up to $20,000 in aggregate for a first violation, and $1,000 per incident up to $50,000 after written notice. The statute says plainly that it does not create a private right of action based on compliance or noncompliance.

That matters for expectations. A disclosure failure is a regulatory matter you can report; it is not, by itself, a claim you can file.

What the six numbers let you compute, and the one they hide

Illustrative only — a Florida disclosure showing total funds provided of $60,000; total disbursed of $55,200 after a fee and the payoff of a prior balance; total repayment of $79,800; a total dollar cost of $19,800; and payments of $570 a business day.

Look at where the statutory cost figure comes from. It is item (3) minus item (1) — repayment minus funds provided — so it reads $19,800. The money that reached your account was $55,200, and the cost measured against that is $24,600. The disclosed cost understates the cost of the money you actually got by $4,800, and nothing on the form is wrong; the definition simply does not do what a reader assumes.

Cost per dollar received is 44.6%. Computed the way the sheet computes it, 33.0%.

Now the term, which Florida does not require anyone to state. $79,800 at $570 a business day is 140 payments, roughly 6.7 months. Solve for the rate that makes 140 payments of $570 equal to the $55,200 you received and the nominal annualised cost is about 141%. Run the identical solve against the $60,000 "provided" figure and you get about 107% — which is the number you will land on if you take the sheet at face value.

Neither of those calculations appears on a Florida disclosure, and neither takes more than five minutes.

Getting value from a Florida disclosure

• Do the arithmetic the statute leaves out. Cost divided by funds disbursed gives you cost as a share of money received; then set that against how long you expect to be paying. Nothing on the page does this for you.
• Never treat a factor rate as a rate. It has no time dimension. Illustrative only — a factor of 1.30 on $40,000 is $12,000 of cost whether it clears in five months or fifteen.
• Ask for the disclosure before you sign anything, not at signing.
• If a broker asks for money up front, read § 559.9614 again.

Confirm the current text at the Florida Legislature's statutes site before relying on a threshold quoted here.

This is general information and not legal advice for your situation.