- There is no federal business loan broker license, and most states still do not license brokers of business-purpose loans, but about a dozen now register, license or bond them, and the list grew again in 2026.
- Registration states today: Texas (by December 31, 2026, $1,000 plus NMLS fees), Virginia ($1,000, then $500 a year), Connecticut (through NMLS) and Missouri ($100 plus a $10,000 bond). North Dakota requires a full money broker license with a $50,000 bond.
- Older loan broker acts in North Carolina, Nebraska and Illinois require a filing or registration and ban advance fees, and their definitions reach business loans.
- California's AB 2116, signed September 30, 2026, will require a DFPI license to broker commercial financing of $500,000 or less from July 1, 2028. Vermont's new law starts July 1, 2027.
Do you need a business loan broker license?
There is no federal business loan broker license. Whether you need a state license or registration depends on where your client's business is, which product you place, and how you are paid. Most states still do not license brokers of business-purpose loans. About a dozen now register, license or bond them, and the list is growing.
Three questions decide it for any deal:
- Where is the client? The rules follow the business that receives the financing, not your office. A broker in Georgia with clients in Texas and Virginia has Texas and Virginia problems.
- What is the product? Most of the new laws cover "sales-based financing", which means repayment is a share of future sales or revenue; that includes most merchant cash advances (MCAs). Some cover all commercial loans and accounts receivable purchases. Loans secured by real estate usually fall under a state's mortgage rules instead, which is a different track.
- How are you paid? Several states ban any fee from the borrower before the loan closes. Being paid by the lender at funding keeps you on the right side of most of them.
The words matter, too. A license means the state examines you before you can work. A registration is a filing with a fee, usually with background disclosures, that the state can revoke. A filing is a document placed on record before you advertise. NMLS (the Nationwide Multistate Licensing System) is the shared website several states use to take these applications; it is a filing system, not a license in itself.
If you are still deciding whether to become a broker at all, start with how to become a business loan broker, which covers the business setup. This post goes state by state.
What changed this fall: October 2026 notes for brokers
California will license brokers. On September 30, 2026 Governor Newsom signed AB 2116, which brings commercial financing of $500,000 or less under the California Financing Law. From January 1, 2028 the conduct rules apply: an ability-to-repay analysis, no confessions of judgment, and the state's ban on unfair, deceptive or abusive practices now covers brokering. From July 1, 2028 providers and brokers must hold a Department of Financial Protection and Innovation (DFPI) license, or have a complete application pending. Brokers will also have to post on their websites the average and maximum APRs of the deals they arranged the prior year. A financing agreement made after January 1, 2028 by an unlicensed provider is unenforceable. Covered products are commercial loans, open-end credit, accounts receivable purchases including factoring, asset-based lending (which is where MCAs sit) and lease financing.
Texas registration is open, and the clock is running. Texas's sales-based financing law has been in force since September 2025, the Office of Consumer Credit Commissioner's rules took effect on July 9, 2026, and the OCCC's registration checklist went up in August. Providers and brokers of sales-based financing must be registered by December 31, 2026. There is no small-volume exemption. Details are in the table below.
Vermont joins the licensing states in 2027. Governor Scott signed H.648 on June 16, 2026. From July 1, 2027, providers and brokers of sales-based financing and factoring in Vermont need a Vermont lending license, with standardized disclosures that include an APR. Transactions above $1 million and bank financing are exempt. Confessions of judgment become void, and a provider may not auto-debit a business's bank account without a perfected first-priority security interest in it.
One more reminder from earlier this year: since January 1, 2026, California's SB 362 requires the APR beside any charge, pricing metric or financing amount you state for a specific offer of $500,000 or less to a California business, including in follow-up texts and calls. That rule applies to brokers now, before any license does.
States that register brokers of business financing today
These states have a registration on the books now. All of them grew out of the commercial financing disclosure laws passed since 2022.
| State | Who registers | Where and how | Fees, bond, renewal | Scope and exemptions |
|---|---|---|---|---|
| Texas | Providers and brokers of sales-based financing | OCCC, through NMLS (Company MU1 form) | $1,000 OCCC fee plus $120 NMLS processing; renewed annually. Deadline December 31, 2026. | Disclosures on specific offers under $1 million; no low-volume exemption; banks and real-estate-secured deals exempt. |
| Virginia | Providers and brokers of sales-based financing | State Corporation Commission | $1,000 initial, $500 a year, due by September 15 or the registration expires. | In force since 2022. Exempt: banks, MCAs over $500,000, and anyone doing five or fewer sales-based financing deals in 12 months. |
| Connecticut | Commercial financing brokers and providers of sales-based financing | Department of Banking, through NMLS (separate broker and provider registrations) | Fee not stated in the sources listed; providers' first deadline was October 1, 2024. | Sales-based financing up to $250,000; five-or-fewer-deals exemption; banks and real-estate-secured deals exempt. |
| Missouri | Commercial financing brokers (providers register separately, free) | Division of Finance, before doing business | $100 initial, $50 renewal by January 31, $10,000 surety bond. | Transactions of $500,000 or less; five-or-fewer-deals exemption. In force since 2025. Attorney General fines of $500 per violation, capped at $20,000. |
| Utah | Providers only; brokers do not register | Department of Financial Institutions | Not stated in the sources listed. | Providers with more than five Utah deals a year; disclosures without an APR. In force since January 1, 2023. |
Two patterns to notice. First, every one of these laws has a deal-size cap, so a broker who only places large loans may be outside them; a broker who places $50,000 MCAs is squarely inside. Second, the "five or fewer deals" exemptions count the funder's or broker's deals in that state, so one good month in Virginia can pull you in.
States with a true license
A license means the state looks at you, your owners and your finances before you may work. Three states matter here, one of them today and two from 2027 and 2028.
North Dakota: the money broker license
North Dakota's money broker law reaches anyone who arranges loans or advertises that they can find lenders for people or businesses, when the borrower lives in North Dakota. The license comes from the Department of Financial Institutions and costs a $400 investigation fee with the application plus a $400 annual fee, $50 a year for each branch, a $50,000 surety bond and a continuously maintained net worth of $25,000. Licenses expire December 31. Brokering without one is a class C felony, and the commissioner can add a civil penalty of up to $100,000 per occurrence plus $1,000 a day for a violation that continues after an order.
California: a CFL broker license now, a wider one in 2028
Today, brokering commercial loans in California falls under the California Financing Law. A CFL broker license covers brokering loans to lenders that are themselves CFL licensees, which in practice means many non-bank business lenders; loans brokered to banks sit outside the CFL. From July 1, 2028, under AB 2116, brokers of covered commercial financing of $500,000 or less will need a DFPI license whatever the funder is, and the state has not yet said whether current CFL licensees must amend their licenses. If California is a market for you, budget the application for 2027.
Vermont from July 1, 2027
Providers and brokers of sales-based financing and factoring need a Vermont lending license from that date, for deals under $1 million. Vermont already licensed loan solicitation; the new law extends it to products that are not loans.
The older loan broker acts that still bite
Long before MCAs existed, several states passed loan broker acts to stop advance-fee scams. Their definitions of "loan" are broad, and none of the three below limits itself to consumer loans, so they reach business financing.
North Carolina
Under Chapter 66, Article 20, a loan broker must file two copies of a disclosure statement with the Secretary of State before advertising or saying anything to a prospective borrower, and keep a $10,000 surety bond or a $10,000 trust account at a North Carolina bank. No fee may be collected before the loan closes, apart from reasonable third-party costs such as appraisals and credit reports. Failing to file, or to keep the bond, is a Class 1 misdemeanor, and a borrower who was misled can void the contract and recover every dollar paid plus damages and attorney's fees.
Nebraska
The Loan Broker Act requires a disclosure statement and a copy of your brokerage agreement to be filed with the Department of Banking and Finance before you advertise or act as a broker: $150 to file, $100 a year to renew, $50 per amendment. Advance fees are banned, the agreement must be in writing with a five-business-day cancellation right, and a willful advance fee over $300 is a Class IV felony. The director can fine up to $1,000 per violation.
Illinois
The Loan Brokers Act of 1995 requires registration with the Secretary of State, with one exemption most business brokers rely on: a broker whose fee is wholly contingent on procuring the loan, with nothing paid before then except bona fide third-party costs, is exempt. If you take any fee up front, you need to register, post a $25,000 bond where Truth in Lending loans are involved, and follow the written-contract and seven-day rescission rules. Fines run to $10,000 per violation, and a willful violation is a Class 4 felony. The text linked is the version as published by Justia; check the current act before relying on a detail.
Disclosure states: no license, but rules for brokers
Most of the commercial financing disclosure laws aim at the funder, not the broker. Two of them still write rules for brokers directly, and a few deserve a line.
| State | What a broker must do | Scope and enforcement |
|---|---|---|
| Florida | No advance fee before closing (third-party costs may be paid by check or money order to the independent third party); no false or misleading statements; every ad must show your actual address and phone number. | Transactions of $500,000 or less, consummated since January 1, 2024. Attorney General enforces: $500 per incident up to $20,000, then $1,000 per incident up to $50,000 after a written notice. (SB 1624) |
| Kansas | Nothing to register; the provider gives the disclosures. | Commercial financing of $500,000 or less since July 1, 2024; five-or-fewer-deals exemption. |
| California (today) | Give the APR with any pricing figure for offers of $500,000 or less, including in follow-up messages; avoid "rate" and "interest" wording that could mislead. | SB 362, since January 1, 2026; licensing follows in 2028. |
| New York, Georgia | Disclosure laws aimed at providers. None of the sources listed describes a broker registration in either state; confirm with the state before you assume there is none. | See Venable's March 2026 survey. |
| New Jersey | Nothing yet. | Senate Bill 1760 was pending as of March 2026; it would exempt deals over $500,000 and providers with five or fewer deals a year. |
Even where a disclosure law says nothing about brokers, the funder you submit to has to comply, and most funders push that work down to you through the ISO agreement: you collect the signed disclosure, you keep the copy. Build the habit everywhere.
Things that are not a business loan broker license
- An NMLS mortgage loan originator license. The federal SAFE Act covers "residential mortgage loans", which federal rules define as loans primarily for personal, family or household use and secured by a dwelling. A business loan with no home as collateral is outside it. The moment a deal is secured by the owner's house, you are in mortgage territory and need different advice.
- A commercial mortgage broker license. Loans secured by commercial real estate are licensed separately in a number of states. That is a different track from the business financing rules above.
- SBA Form 159. If you package or refer SBA 7(a) or 504 loans, the fees you charge and receive go on the Fee Disclosure and Compensation Agreement. It is a disclosure, not a license.
- An ISO agreement. Your contract with a funder is a contract. It usually makes you promise to follow every applicable law, which is exactly why the list above matters.
- A "certification" from a training company. Useful or not, it is a course certificate. No state recognizes it as a license.
Advance fees: the rule that trips up new brokers
Four of the states above write the same rule in different words: do not take money from the borrower before the loan closes. North Carolina and Nebraska ban it outright. Florida bans it for brokers of commercial financing. Illinois lets you skip registration only if your fee is wholly contingent on getting the loan. Beyond those, an advance fee is the single fact most likely to turn a business dispute into a fraud complaint.
The clean structure is the one most funders already use: the funder pays your commission when the deal funds, and the borrower pays you nothing. If you do charge the borrower a fee, make it due at closing, put it in a signed agreement, and route any third-party costs (credit reports, appraisals) directly to the third party. How broker commissions work explains the lender-paid side, including clawbacks.
How to register, step by step
- List the states your clients are in, from your last 12 months of deals, and the ones you plan to market to.
- Sort your products. Sales-based financing (MCAs, revenue-based advances), other commercial loans and credit lines, factoring, equipment leases, and anything secured by real estate. Each state's law names which it covers.
- Check the caps and the counts. Deal-size caps: $250,000 in Connecticut; $500,000 in Virginia, Missouri, Florida, Kansas and California; $1 million in Texas (for disclosures) and Vermont. Volume exemptions of five or fewer deals in 12 months exist in Virginia, Connecticut, Missouri, Florida and Kansas; Texas has none.
- Open an NMLS company account if Texas or Connecticut is on your list. Texas registers on the Company (MU1) form; expect to name a compliance officer and a complaint contact, a Texas registered agent, every owner of 10 percent or more, a books-and-records custodian, a franchise-tax good-standing screenshot dated within three months, and a short business plan describing customers, deal sizes and the providers you arrange financing for.
- Buy the bonds you need. $50,000 in North Dakota, $10,000 in Missouri, $10,000 (or a trust account) in North Carolina, $25,000 in Illinois if Truth in Lending loans are involved. A surety sets the premium based on your credit.
- File the state-specific paperwork. Virginia's registration with the State Corporation Commission, Missouri's with the Division of Finance, North Carolina's disclosure statement with the Secretary of State, Nebraska's disclosure statement and brokerage agreement with the Department of Banking and Finance, North Dakota's license application with the Department of Financial Institutions.
- Calendar the renewals. Virginia by September 15; Missouri by January 31; North Dakota licenses expire December 31 with renewals due 30 days earlier; Texas annually through NMLS; North Carolina and Nebraska at least annually.
- Keep a compliance file with every registration number, bond, filed disclosure statement and signed deal disclosure, by state. Your CRM is the right place for the per-deal copies; see which CRM fits a loan broker.
What it costs: a worked example
Take a broker based in Georgia who places MCAs and term loans for clients in Texas, Virginia, Missouri and North Carolina, and does more than five deals a year in each. Using the fees in the state sources above, the first-year filings look like this.
| State | First year | Each year after | Bond |
|---|---|---|---|
| Texas | $1,120 ($1,000 OCCC plus $120 NMLS) | Renewal fee per the OCCC schedule | None |
| Virginia | $1,000 | $500 by September 15 | None |
| Missouri | $100 | $50 by January 31 | $10,000 surety bond |
| North Carolina | Filing; fee not stated in the statute text | Annual update | $10,000 bond or trust account |
| Total filing fees | $2,220 plus bond premiums | $550 plus Texas renewal and bond premiums | Two $10,000 bonds |
Illustration only, using October 2026 list fees from the state sources; a surety's premium, NMLS renewal charges and any attorney's time come on top. The point is the shape: a few thousand dollars and a few weeks, not a barrier, and far cheaper than one unenforceable deal.
What happens if you skip it
The penalties are not symbolic, and they land on the broker, not only on the funder.
- North Dakota: brokering without a license is a class C felony, plus a civil penalty of up to $100,000 per occurrence.
- Nebraska: a willful advance fee over $300 is a Class IV felony; other willful violations are felonies too; fines up to $1,000 per violation; the borrower can void the agreement and recover what they paid plus attorney's fees.
- North Carolina: failing to file or to keep the bond is a Class 1 misdemeanor; a misled borrower can void the contract and recover all sums paid plus damages and attorney's fees; violations count as unfair trade practices.
- Illinois: fines up to $10,000 per violation; willful violations are a Class 4 felony; the contract is void and fees come back with interest.
- Florida and Missouri: Attorney General fines of $500 per incident, rising to $1,000 after a notice, with caps of $20,000 and $50,000.
- Virginia and Texas: an unpaid Virginia renewal expires the registration automatically; Texas puts the registration and its disclosures under the OCCC's enforcement.
- California from 2028: a commercial financing agreement made by an unlicensed provider is unenforceable, and a broker whose application is denied must stop.
Where Fintology fits
Fintology gives brokers a white-label platform with access to 4,500+ lending products, with client documents, lender submissions and the signed disclosures for each deal kept in one place, so the compliance file above builds itself. See pricing for the plans.
Approvals, amounts and terms are decided by the lender offering each product and are never guaranteed.
Frequently asked questions
Do you need a license to broker business loans?
There is no federal license. Most states do not license brokers of business-purpose loans, but Texas, Virginia, Connecticut and Missouri register brokers of sales-based or commercial financing, North Dakota licenses money brokers, and North Carolina, Nebraska and Illinois have loan broker acts with filings and advance-fee bans. California (2028) and Vermont (2027) are adding licenses.
Do I need an NMLS mortgage license to be a business loan broker?
Not for business loans that are not secured by a home. The SAFE Act's mortgage loan originator license covers loans for personal, family or household use secured by a dwelling. Some states do use the NMLS website to take commercial financing registrations, which is a different thing.
Which states make MCA brokers register?
Texas (by December 31, 2026), Virginia, Connecticut and Missouri register brokers of sales-based financing or commercial financing today. Utah registers providers only. Vermont requires a license from July 1, 2027 and California from July 1, 2028.
What does Texas require by December 31, 2026?
Providers and brokers of sales-based financing must be registered with the Office of Consumer Credit Commissioner through NMLS, at $1,000 plus a $120 NMLS fee, with a compliance officer, a Texas registered agent, owners of 10 percent or more and a business plan on file. There is no low-volume exemption.
Can a business loan broker charge an upfront fee?
In North Carolina and Nebraska, no; in Florida, no for brokers of commercial financing of $500,000 or less; in Illinois, an upfront fee removes the exemption from registration. Elsewhere it may be legal but it is the fastest route to a complaint. Lender-paid commission at funding avoids the problem.
What is changing in California for brokers?
AB 2116, signed September 30, 2026, puts commercial financing of $500,000 or less under the California Financing Law: conduct rules from January 1, 2028, a DFPI license for providers and brokers from July 1, 2028, and a duty for brokers to post their average and maximum APRs online. Since January 1, 2026, SB 362 already requires the APR beside any pricing figure you quote.
Sources
- Hinshaw, Expansive New Commercial Financing Licensing Requirement Signed into Law in California (AB 2116), October 2, 2026
- Sheppard Mullin, California Enacts Commercial Financing Licensing Framework, October 8, 2026
- Hudson Cook (via deBanked), Changes to California Law Effective January 1, 2026 (SB 362), December 20, 2025
- Texas OCCC, Commercial Sale Based Financing Company Registration Checklist, updated August 18, 2026
- Manatt, Texas OCCC Finalizes Rules Implementing Sales-Based Financing Law, July 13, 2026
- Code of Virginia § 6.2-2230, Registration; authority to transact business
- Mayer Brown, Virginia Enacts Merchant Cash Advance Registration and Disclosure Law, April 13, 2022
- Greenberg Traurig, New Commercial Financing Laws Take Effect in Connecticut, Kansas, September 16, 2024
- Mayer Brown, Missouri Regulates Providers and Brokers Under New Commercial Financing Law, September 12, 2024
- Ballard Spahr, Consumer Finance Monitor: Utah and Virginia Enact Registration and Disclosure Requirements, April 25, 2022
- North Dakota Century Code, Chapter 13-04.1, Money Brokers
- North Carolina General Statutes, Chapter 66, Article 20, Loan Brokers
- Nebraska Department of Banking and Finance, Nebraska Loan Broker Act
- Illinois Loan Brokers Act of 1995 (as published by Justia)
- Florida Senate, CS for SB 1624 (2023), Commercial Financing Disclosure Law
- Troutman Pepper Locke, Vermont Enacts H.648 Extending Licensing and Conduct Rules to Sales-Based Financing and Factoring, June 2026
- Manatt, Vermont Legislature Passes Sweeping Law Regulating Sales-Based Financing and Factoring, June 3, 2026
- Venable, State Commercial Financing Disclosure Laws: Recent Developments, March 2, 2026
- CFPB, Regulation H, 12 CFR 1008.23, Definitions (residential mortgage loan)
- SBA Form 159, Fee Disclosure and Compensation Agreement (7(a) and 504)
- Funder Intel, Do You Need a License to Broker Business Loans? A 2026 State-by-State Guide, August 13, 2026
This article is general information, not legal, tax or financial advice. Rules vary by state and change often. Approvals, amounts, terms and commissions are decided by the lender offering each product and are never guaranteed.
