New York State's Commercial Finance Disclosure Law and what it puts in front of you

If a funder extends you a specific commercial financing offer and your business is in New York State, you should receive a separate document headed OFFER SUMMARY before you sign the contract. It carries an annual percentage rate. You have to sign it. That is the working effect of New York's Commercial Finance Disclosure Law.

New York State, not New York City

This is a state law. It sits in Article 8 of the New York Financial Services Law and it is administered by the New York State Department of Financial Services, the same agency that supervises state-chartered banks and insurers. It reaches covered financing across the whole state — Buffalo, Binghamton and Brooklyn alike.

New York City's Department of Consumer and Worker Protection is a separate city agency with a separate remit: consumer complaints, worker protections, city business licences. It does not administer the disclosure law and there is no city version of it. If someone waves "the New York rules" at you while pointing at a city licence number, ask which rules they mean.

What has to be disclosed

Article 8 splits financing into categories and sets a disclosure list for each: sales-based financing (§ 803), closed-end financing (§ 804), open-end financing (§ 805), factoring transactions (§ 806), other forms of financing (§ 807) and renewals (§ 808).

Sales-based financing is the statutory category that captures merchant cash advances and most revenue-share products. For those, § 803 requires the provider to disclose the total amount of the financing and the disbursement amount where the two differ after fees withheld at funding; the finance charge; the estimated annual percentage rate, expressed as a yearly rate inclusive of fees and finance charges and calculated in accordance with the federal Truth in Lending Act; the total repayment amount; the estimated term; the payment amounts and frequency, including an average monthly figure where payments vary; other fees such as draw and late charges; what you are charged if you pay off or refinance early; and any collateral or security interest.

Section 809 requires your signature on the disclosure. Section 812 lets the Superintendent impose civil penalties of up to $2,000 per violation, or up to $10,000 per willful violation, and order restitution or an injunction for knowing violations. Enforcement runs through the Department. The statute does not set up a private lawsuit.

The regulation is where the detail lives

DFS adopted 23 NYCRR Part 600 in February 2023. That is the document that turns the statute into a form. It prescribes the OFFER SUMMARY heading in bold, a three-column table, a set row count for each product type, a font size, delivery as a document separate from the agreement, and a word cap on the explanatory text a provider may add.

It also handles the awkward part: how to state an APR on a product with no fixed term. For sales-based financing a provider uses either a historical method — an average of your own sales across a fixed look-back window of four to twelve months — or an opt-in projection method that comes with an annual audit comparing disclosed APRs against actual ones. Ask which method produced your number. The answer tells you whether the term on your sheet is anchored to your deposits or to the funder's model.

Who sits outside it

Section 802 exempts financial institutions; technology service providers that license software to exempt entities without holding an interest in the financing; lenders regulated under the federal Farm Credit Act; commercial financing secured by real property; leases as defined in UCC section 2-A-103; any person or provider making no more than five commercial financing transactions in the state in a twelve-month period; an individual transaction over $2,500,000; and certain motor vehicle dealer and rental vehicle company financing of at least $50,000.

Two of those decide most cases. Above $2.5 million, no offer summary. If your funder is a bank, no offer summary — banks disclose under their own supervisory rules instead.

How to actually use the sheet

1. Compare the disbursement amount with the total financing amount. The gap is money you never touch and still repay.
2. Treat the term on a sales-based deal as an estimate. On most of these the finance charge does not shrink if repayment stretches; the APR does. Slow sales make the sheet look better after the fact while costing you the same dollars.
3. Compare APR to APR across offers, and never against a factor rate. A factor rate has no time dimension. Illustrative only — a 1.35 factor on $50,000 is $17,500 of cost whether it is repaid in five months or eighteen, and those are not the same transaction.
4. Find the early-payoff line. If there is no discount for paying early, a short term is a cost, not a saving.
5. Keep the signed copy. If the contract you are handed later carries different numbers, you have the earlier document in hand.

Where it is still moving

Requirements of this kind get amended. Before you rely on a section number or a threshold, read the current text on the DFS regulation page or in Article 8 itself. The federal layer is also unsettled: the CFPB's Dodd-Frank § 1071 small business lending data rule has been pushed back several times and, as of 2026, carries a compliance date of January 1, 2028 following a final rule issued on 1 May 2026. Check the CFPB's 1071 page for the current position.

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