MERCHANT CASH ADVANCE LAW IN FLORIDA – May 2026
In the State of Florida, merchant cash advance law is limited in its protection of merchants and merchant cash advance debt. Florida’s MCA law, tracks in line with primary MCA law, whereby no usury can exist when the transaction is a true purchase and sale of future receivables agreement.
Thus, a Florida merchant cash advance is not a loan when the transaction is a true purchase and sale of future receivables. If a merchant cash advance is not considered a loan (barring certain exceptions,) it is not subject to usury caps.
Florida did however pass new disclosure laws, pursuant to Florida’s Consumer Financial Disclosure Law (CFDL,) that passed in 2024. The CFDL requires MCA funders to be transparent and to provide the merchant certain disclosures, for example the total cost of financing. The CFDL falls short of imposing usury caps because it follows the “purchase and sale” exception to usury.
This means the prevailing law governing a Florida merchant cash advance remains the Uniform Commercial Code (UCC,) a uniform set of laws regulating commerce and commercial transactions across the United States.
One of the leading cases In Florida on this subject is Craton Entertainment v. Merchant Capital Group, LLC, an MCA case affirming that a true purchase and sale of receivables is not a disguised loan. Also, this case confirmed Florida’s lack of interest rate limits.
While the Florida CFDL does add a transparency requirement, it does not cap costs, leaving businesses with MCA debt to the purview of the Uniform Commercial Code (UCC,) with moderate State oversight.
What does this mean for businesses with MCA debt in Florida?
- Excessive Costs: Without interest rate caps, Florida MCAs can have extremely high effective rates (often north of a hundred percent), with underwriting and origination fees that lower the net amount received by a merchant.
- Disclosures: Merchant Cash Advance providers in Florida must now provide clearer information about the costs of the advance due to the CFDL laws.
- Enforcement: While a disclosure (CFDL) violation may bring civil fines, Florida court decisions suggest a CFDL violation does not invalidate the MCA agreement itself.
- Licensing: At this time, Florida does not require MCA funders or brokers to obtain a license to operate within the State.
- Broker Disclosures: Florida law requires brokers to disclose in writing whom they are being compensated by and how, for the transaction at hand.
- Default Consequences: Defaulting on an MCA is a civil matter, not a criminal one. However, providers have two (2) main weapons to deal with a default: namely the filing of a lawsuit and / or the filing of a UCC restraint that may legally freeze business bank accounts, payment processors and money owed to the merchant.
To maintain its legal status as a “purchase and sale agreement” rather than a “loan” in Florida, an MCA contract should typically meet the following criteria:
- The obligation for repayment must be contingent on the business generating revenue.
- The funder must assume the risk of the business failing.
- The agreement must not have a fixed repayment term that requires repayment absolutely and regardless of revenue generation.
