The Kansas Commercial Financing Disclosure Act, in the order it will matter to you

Kansas passed its Commercial Financing Disclosure Act as Senate Bill 345 in 2024, approved on 12 April 2024. It follows the Florida and Missouri pattern closely: a short list of dollar figures, a hard ceiling, conduct rules for brokers, and no private right of action.

Who counts as a provider

The Act reaches a person completing five or more commercial financing transactions annually in Kansas. A commercial financing transaction means a commercial loan, an accounts receivable purchase transaction, or a commercial open-end credit plan entered into for business purposes. The definitions borrow heavily from Article 9 vocabulary — account, general intangible, payment intangible — which is how a purchase of future receivables gets pulled inside.

What you receive

Providers must disclose before or at closing:

1. The total amount of funds provided.
2. The total amount disbursed, if less than the amount provided.
3. The total of payments.
4. The total dollar cost of the financing.
5. The manner, frequency and amount of each payment, or an estimate where payments vary.
6. Any costs or discounts associated with prepayment.

Only one disclosure is required for each commercial financing transaction. There is no annual percentage rate on that list and no prescribed form. The statutory text is available in the 2024 Session Laws of Kansas.

"Before or at closing" is the same timing weakness Florida has. The moment you are handed a total cost figure should not be the moment your pen is out. Ask for it in writing when you are still shopping.

Exemptions

The Act does not apply to depository institutions and their regulated subsidiaries; farm credit lenders; transactions secured by real property, leases, or purchase-money obligations; motor vehicle dealer and rental company financing of $50,000 or more; licensed money transmitters; providers completing five or fewer transactions annually; and transactions exceeding $500,000.

Brokers

A broker arranging a Kansas transaction for compensation may not assess an advance fee, though actual service costs such as a credit check are permitted. A broker may not make false or misleading representations, and may not engage, directly or indirectly, in any act that operates or would operate as fraud or deception.

Enforcement

Authority to enforce compliance is vested exclusively with the Attorney General. Penalties are $500 per violation up to $20,000 aggregate for first violations, and $1,000 per violation up to $50,000 for subsequent violations after written notice. The Act creates no private right of action.

Read that last sentence literally. If a provider gets the disclosure wrong, your route is a complaint to the Attorney General, not a claim of your own arising from the Act. Whatever other rights you may have under contract law or other statutes is a separate question and one for a lawyer who has read your agreement.

Making the six figures do more work

The Kansas sheet gives you cost and payment mechanics. It does not give you price. Two steps close the gap.

• Take the total dollar cost and divide it by the amount actually disbursed. That is your cost per dollar received.
• Then pin down duration. Where payments vary, item 5 gives you an estimate and a methodology. Ask what sales figure the estimate assumes and compare it to your own bank statements for the last twelve months. If the funder's projection is more optimistic than your reality, the real term is longer and the real annualised cost is lower — but you will be paying for longer than the sheet implies, which is its own problem for cash flow.

Do not accept a factor rate as an answer to the price question. It carries no time dimension at all. Illustrative only — 1.32 on $75,000 is $24,000 of cost; over seven months that is a very different transaction from the same $24,000 over twenty.

The six figures, worked

Start with the number that is not on the sheet. The cost measured against what actually reached your account is $107,200 less $76,500 — $30,700, not the $27,200 disclosed, because the disclosed cost is measured against funds provided rather than funds disbursed. That is $0.40 of cost for every dollar you received.

Then attach the term. Eighty weekly payments is about 18.5 months. Solving for the rate that discounts 80 payments of $1,340 back to the $76,500 you received gives roughly 0.89% a week, an annualised 46%. Write the term and the method beside the figure, because a percentage with no stated basis is how incomparable things end up compared.

Neither number appears on the Kansas sheet, and both come entirely from figures that do.

Test the estimate behind item five

Where payments vary, the Act permits an estimate. An estimate rests on a revenue assumption, and the assumption is the part worth interrogating.

Ask what revenue figure the estimate used and over what period. If it used your three strongest months, the disclosed duration is the best case and your cash flow planning needs the other one. A longer real term lowers the annualised cost and raises the number of months you carry the payment, and only one of those two is good news.

Two gaps to plan around

What Kansas does not do

No rate ceiling. No registration of providers or brokers. No prescribed form, so the disclosure can arrive looking like anything. And the exclusion for transactions over $500,000 means the largest deals get the least paperwork.

Confirm the current text before relying on a threshold quoted here — the 2024 Session Laws show the Act as passed, and later amendments would sit elsewhere.

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