Utah's Commercial Financing Registration and Disclosure Act: registration first, numbers second

Utah does two things that most disclosure states do not. It makes the funder register with a state regulator before doing business, and it publishes a registry you can check. What it does not do is put an annual percentage rate on your offer sheet.

Registration

Under the Commercial Financing Registration and Disclosure Act, a person may not engage in a commercial financing transaction as a provider in Utah, or with a Utah resident, unless registered with the Department of Financial Institutions. Registration and the disclosure duty both began on 1 January 2023.

Registration under Utah Code § 7-27-201 carries an original fee and an annual renewal, with renewal due at the end of the calendar year. The Department's commercial financing page is the place to confirm the current fee schedule and to ask whether a particular funder is on the register. That question is worth asking before you sign, because it is one of the few verifiable facts about a funder that a state agency will confirm for you.

Brokers are a different matter. Utah defines a broker — a person who, for compensation or the expectation of compensation, arranges a commercial financing transaction between a third party and a business in the state — but the Act does not impose a separate broker registration requirement. It requires the provider to disclose what it paid the broker.

What the disclosure contains

Utah Code § 7-27-202 requires the provider to disclose:

1. The total amount of funds provided to the business.
2. The total amount of funds disbursed to the business, if less than the amount provided.
3. The total amount to be paid to the provider.
4. The total dollar cost — the difference between the two.
5. The manner, frequency and amount of each payment, or an estimated initial payment where payments vary.
6. Any costs or discounts associated with prepayment, with a reference to the relevant section of the agreement.
7. Any amount paid to a broker in connection with the transaction.

The agreement must also describe the methodology for calculating a variable payment amount.

There is no annual percentage rate in that list. The Department's own guidance is blunt about format: there are no written rules or requirements for how the disclosures must look. So a Utah disclosure can arrive as a paragraph in an email or a box on page nine. It is on you to find it.

Exemptions and thresholds

The Act does not reach depository institutions or their regulated subsidiaries and service corporations; providers regulated under the federal Farm Credit Act; money transmitters licensed under Utah's Chapter 25; a provider completing five or fewer commercial financing transactions in a year; transactions secured by real property; leases; purchase-money obligations; motor vehicle dealer and rental company financing at $50,000 or more; financing offered by a manufacturer of the product or service being financed; and transactions over $1,000,000.

That last figure is higher than the $500,000 ceiling several other states chose, so Utah's disclosure duty covers a wider band of deals than Florida's or Kansas's.

Using a Utah disclosure

Without an APR, comparison takes an extra step and you have to take it yourself.

• Write down the disbursed amount, the total repayment and the estimated number of payments for each offer.
• Divide the total dollar cost by the disbursed amount to get the cost as a percentage of money you actually received.
• Then look at how long you are expected to be paying. The same percentage over four months and over fourteen are not comparable prices, and nothing on the sheet will say so.
• Read line 7. If a broker is being paid out of your funding, that money came from your proceeds. It is a legitimate question how much and for what.
• Read the prepayment line before you assume that paying early gets you out of the cost.

Illustrative only — the seven items, converted into a price

The disclosure gives you the raw materials and stops one step short of a price. That step is yours.

The total dollar cost on the sheet is $39,600. Measured against the money that actually reached you, that is 35.2% of $112,500, and the multiple of disbursed cash is 1.4187 — both larger than the figures the provider's own framing suggests, because $7,500 never arrived.

Now the missing step. Over seven months, payments of $22,800 imply an annualised cost of 115.1%. Over fourteen months, payments of $11,400 imply 60.6%. The disclosure gives you the frequency and the amount of each payment, which means you can count the payments and do this yourself — and doing it is the only way the seven items become comparable to a bank quote.

Note item seven while you are here. The $4,800 to the broker is inside the $159,600 you repay, and it came out of the same proceeds. That is not a reason to object to intermediaries being paid; it is a reason to know what the introduction cost and to ask what it bought.

What Utah does not regulate

Registration is not approval. The Department registers providers; it does not vet the price of any particular deal, and the Act sets no rate ceiling. A registered provider can offer you an expensive deal entirely lawfully. The register tells you the funder is on record with the state and reachable by a regulator, which is worth something, and not that anyone reviewed your contract.

Thresholds and fees change. Confirm the current position with the Utah Department of Financial Institutions before relying on any figure here.

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

Using the register, and what a registration does not mean

The register is worth checking for two minutes before you send documents to anyone.

Ask the Department whether the provider is registered under the name that will appear on your agreement — not the brand on the email, and not the broker's name. Those three are frequently different, and the one that matters is the entity that will hold the paper and file the UCC-1.

Three outcomes, and each tells you something. The entity is registered: a regulator has a record and a contact point for it. The entity is not registered but claims an exemption: ask which one, because the exemption list is specific and a funder relying on one should be able to name it. Nobody can tell you what entity will hold the agreement: that is the answer, and it arrived before you sent your bank statements.

Registration is not approval and it is not a price control. What it buys you is a named, reachable counterparty and a state agency that has heard of them. On a market where a great deal of business is done by entities that are hard to identify, that is not nothing — and it is the one verifiable fact about a funder that Utah will confirm for you free of charge.