Across the United States, commercial financing is undergoing a significant transformation. Following the lead of states like California, New York, Utah, and Virginia, Kansas enacted the Kansas Commercial Financing Disclosure Act (Senate Bill 345), codified under Chapter 75 of the Kansas Statutes Annotated which went into effect on July 1, 2024.
This legislation establishes mandatory transparency standards for commercial financing providers and brokers, ensuring small business owners have clear, actionable visibility into their financing terms before entering into an agreement.
For small and mid-sized businesses (SMBs) in the Sunflower State seeking working capital, understanding these disclosure standards is essential. Here is a breakdown of what the Kansas disclosure law entails and how CFG Merchant Solutions® (CFGMS) is committed to compliance and transparency while providing fast, reliable capital.
Overview of the Kansas Commercial Financing Disclosure Act
The Kansas Commercial Financing Disclosure Act applies to commercial financing transactions of up to $500,000. The statute covers a broad spectrum of alternative commercial funding mechanisms, including:
- Sales-based financing including revenue-based financing
- Accounts receivable purchasing and factoring
- Commercial open-end credit plans (lines of credit)
- Commercial closed-end financing (term loans)
The law imposes disclosure obligations on covered providers and establishes conduct requirements applicable to brokers involved in commercial financing transactions.
Traditional federally chartered or state-chartered depository institutions (banks and credit unions) are exempt, directing the law’s primary focus toward fintech and non-bank alternative commercial financiers.
Mandatory Disclosures Required Under Kansas Law
Before or at the consummation of a commercial financing transaction, providers must present a clear, written disclosure containing key financial details. The new law requires the following disclosure metrics:
- Total Funds Provided: The total gross amount of funds made available to the business.
- Net Disbursement: The actual proceeds disbursed directly to the merchant after deducting any upfront closing, origination, or administrative fees.
- Total of Payments: The complete dollar amount the recipient business will pay under the agreement.
- Total Dollar Cost of the Financing: The total finance charges and fees calculated as the difference between the Total of Payments and the Total Funds Provided.
- Payment Method and Frequency: A clear description of the payment schedule, including whether payments are deducted daily, weekly, or monthly, or tied to a percentage of receivables (for sales-based transactions).
- Prepayment Terms: Specific provisions stating whether any additional fees, penalties, or discounts apply if the business pays off the obligation early.
- Prohibited Broker Fees: Brokers must not make any false or misleading statements regarding upfront advance fees.
Unlike California and New York, Kansas does not require APR or estimated APR disclosures for covered commercial financing transactions.
How CFGMS Complies with Kansas Commercial Financing Laws
At CFG Merchant Solutions ®(CFGMS), transparent financing has been a founding pillar of our operations long before individual states codified disclosure mandates. CFGMS serves growing businesses nationwide with integrity, maintaining an A+ rating with the Better Business Bureau (BBB).
Here is how CFGMS ensures complete compliance and peace of mind for Kansas entrepreneurs:
- Clear, Upfront Disclosures at Every Stage: CFGMS provides complete, unambiguous disclosure documents prior to closing. We detail the exact advance amount, net proceeds delivered, factor rates, total repayment obligation, and clear payment intervals, leaving no surprises.
- No Hidden Fees or Surprise Charges: Every administrative fee, processing cost, and broker fee (when applicable) is itemized and clearly stated. CFGMS takes pride in transparent pricing, ensuring business owners can accurately project their cash flow and return on investment.
- Revenue-Aligned, Flexible Structures: Our core working capital solutions, including revenue-based merchant cash advances, are structured around your actual business cash flows. If your business experiences a seasonal dip, our funding mechanisms can adapt accordingly, rather than imposing rigid penalties.
- Direct Support from Dedicated Underwriting Specialists: Rather than relying solely on automated algorithmic decisions, CFGMS pairs every business owner with experienced funding specialists who review agreements line by line, ensuring merchants fully understand their obligations before signing.
Ready to Grow Your Business? Partner with CFGMS Today.
Get the capital you need to purchase inventory, expand operations, or manage seasonal fluctuations, without hidden fees or delays.
- Apply Online: Visit www.cfgms.com to submit an easy online application.
- Fast Approvals: Receive funding offers in as little as 24 to 48 hours.
- Speak with an Expert: Contact our dedicated financing team directly at 844-662-3467 to explore transparent, compliant capital solutions tailored to your business.