What it means for you
If your principal place of business is in Virginia, an MCA offer of $500,000 or less should come on the SCC's Sales-Based Financing Disclosure Form, showing the finance charge, the total repayment, the estimated number of payments and any broker compensation the provider pays. You sign the form. Virginia does not require an APR, and a confession-of-judgment clause in the contract cannot be enforced.
- Law
- Sales-Based Financing Providers law
- Citation
- Va. Code §§ 6.2-2228 to 6.2-2238; 10VAC5-240
- Enacted
- 2022-04-11
- Effective
- 2022-07-01
- Regulator
- Virginia State Corporation Commission, Bureau of Financial Institutions; Virginia Attorney General (enforcement)
- Who it covers
- Sales-based financing providers and brokers dealing with businesses whose principal place of business is in Virginia, including those operating over the internet. Sales-based financing is repaid over time as a percentage of sales or revenue, with payments that can rise or fall with sales, which describes most merchant cash advances.
- Registration
- Every sales-based financing provider and broker must register with the State Corporation Commission. The deadline for businesses already operating was November 1, 2022. The initial fee is $1,000, and a $500 annual fee is due by September 15.
- Brokers
- Brokers must register with the SCC. The provider's disclosure must say whether it will pay a broker directly for your deal and how much.
What must be on the disclosure
- Total amount of the financing, and the disbursement amount if different
- Finance charge
- Total repayment amount (disbursement amount plus finance charge)
- Estimated number of payments, based on projected sales, to reach the total repayment amount
- Payment amounts, frequency and method, or how variable payments are calculated
- Other potential fees and charges, such as draw, late payment and returned payment fees
- Prepayment and refinancing terms, including whether any charges apply or discounts exist
- Collateral requirements or security interests
- Whether the provider will pay a broker directly for the offer, and the amount
The SCC disclosure form
Since October 1, 2022, providers have used the SCC's Sales-Based Financing Disclosure Form, given at the time they extend a specific offer. The provider may not change the format or add unauthorized information, and you must get the form in a format you can keep.
You sign and date it, and an electronic signature is allowed. If you pay off early or refinance, the provider gives you an updated form.
Contract terms Virginia will not enforce
- A confession of judgment or similar clause is unenforceable.
- A lawsuit arising under the contract must be brought in a Virginia court. A clause requiring a court outside Virginia is unenforceable.
- If the contract uses arbitration, the provider pays the arbitrators' fees and administrative costs, and it cannot require face-to-face arbitration outside the jurisdiction of your principal place of business.
- Any contract provision that violates the chapter is unenforceable against you.
Registration and enforcement in Virginia
Registration applies to every provider and broker, including those that deal with Virginia businesses over the internet without an office in the state. Registrants must disclose judgments, cease and desist orders and convictions involving fraud, breach of trust or money laundering.
The Attorney General can seek an injunction, damages and restitution, plus attorney fees and costs, and must notify the SCC.
What the Virginia law does not do
- It does not require an estimated APR.
- It does not set a maximum factor rate or fee.
- It does not cover single deals over $500,000 or financing from financial institutions.
This page is general information, not legal advice.
Who is exempt
- Financial institutions
- A person, provider or broker that enters into no more than 5 sales-based financing transactions with a recipient in a 12-month period
- A single transaction over $500,000
Questions
Does Virginia require an APR on MCA offers?
No. The Virginia form shows the finance charge, total repayment amount and estimated number of payments, but the law does not require an APR.
Do MCA brokers have to register in Virginia?
Yes. Every sales-based financing provider and broker must register with the State Corporation Commission and pay a $500 annual fee by September 15.
Can a Virginia MCA contract include a confession of judgment?
No. Virginia law says no sales-based financing contract shall contain a confession of judgment or similar provision, and any such provision is unenforceable.
Who enforces the Virginia law?
The State Corporation Commission handles registration and the disclosure form. The Attorney General can sue for injunctions, damages and restitution.
Sources
- Code of Virginia, Title 6.2, Chapter 22.1: Sales-Based Financing Providers — Virginia General Assembly (LIS) (checked 2026-09-30)
- Va. Code § 6.2-2229: Exemptions — Virginia General Assembly (LIS) (checked 2026-09-30)
- Va. Code § 6.2-2231: Disclosure requirements — Virginia General Assembly (LIS) (checked 2026-09-30)
- Va. Code § 6.2-2234: Forum, arbitration and confession of judgment — Virginia General Assembly (LIS) (checked 2026-09-30)
- 10VAC5-240: Sales-Based Financing (SCC regulation) — Virginia State Corporation Commission, via LIS (checked 2026-09-30)
- 10VAC5-240-30: Sales-Based Financing Disclosure Form — Virginia State Corporation Commission, via LIS (checked 2026-09-30)
- Virginia Register Vol. 38 Iss. 20: proposed 10VAC5-240 (Case BFI-2022-00035) — Virginia Register of Regulations (checked 2026-09-30)
- VA HB 1027 (2022) bill status: approved April 11, 2022, Chapter 516 — LegiScan (checked 2026-09-30)
Last reviewed 2026-09-30. General information, not legal advice. Laws and regulations change; confirm with the regulator or an attorney.