The disclosure wave reaches the South: Louisiana live, Texas rules due by September

The state disclosure movement that began with California and New York's commercial financing laws has reached the South. Louisiana now requires providers of revenue-based financing transactions, the statutory category that covers merchant cash advances, to deliver written disclosures to recipients before contract execution, under its law effective August 2025. Texas follows next: implementing rules under its commercial financing statute are due by September 2026.

The Texas rules carry a provision worth singling out: restrictions on automatic ACH debits from merchant accounts unless the provider holds a first-priority perfected security interest. The daily ACH pull is the operational heart of the MCA product, and the first-priority condition would meaningfully complicate stacked lending, because by definition only one funder in a stack can hold first position. If enforced as described, junior stacking in Texas becomes structurally harder.

For owners, the disclosure regimes matter in two ways. Prospectively, standardized cost disclosure, total repayment, estimated APR, payment schedule, makes the true price of an advance visible before signing, which is exactly the information the industry's sales process historically obscured. Retrospectively, a funder's failure to comply with an applicable disclosure law is a compliance defect that experienced negotiators and attorneys raise at the settlement table.

The pattern across states is consistent enough to call a national trajectory: disclosure first, conduct standards second, and courts increasingly willing to look through the receivables-purchase form to the lending substance. Owners weighing an advance today, or negotiating out of one signed years ago, are operating in a materially different legal environment than the one the contracts were drafted for.

Our contract red-flags guide covers what to check in an agreement regardless of state, and our rankings track which settlement firms actually use these regulatory developments as leverage rather than just citing them in marketing.