Connecticut SB 1032 —
the lowest threshold in the country.

Connecticut Senate Bill 1032, enacted as Public Act 23-201, was signed in 2023 and reached full operative effect on July 1, 2024. With it, Connecticut joined California, New York, Utah, Virginia, and Georgia as a state with a live commercial financing disclosure regime — and brought a distinctive design with it.

Two features set the Connecticut framework apart. First, the dollar threshold is $250,000 — significantly lower than any of the earlier state laws. Second, the broker side of the market is governed by a distinct registration regime administered by the Connecticut Department of Banking, separate from any registration the broker may hold in other states.

The $250,000 threshold

The threshold question matters more than it sounds. Where a state caps coverage determines which transactions are inside the regime and which are outside, and the right answer depends on what the legislature is trying to accomplish.

California, Virginia, and Georgia chose $500,000 — broad enough to cover the great majority of small-business MCA, factoring, and term loan deals while leaving mid-market transactions outside. New York chose $2.5 million, on the theory that even mid-market borrowers benefit from disclosure. Utah chose $1 million as a middle ground.

Connecticut chose $250,000. The choice reflects a focus on the segment of small-business credit where disclosure is most likely to change merchant behavior — the deal sizes where a $5,000 spread in finance charge meaningfully affects the operator, and where shopping the deal across multiple brokers and funders is most common. Larger transactions, where counterparties are typically more sophisticated and use legal counsel, were left outside the rule.

For Connecticut merchants, the practical effect is that any covered transaction — which will be the great majority of small-business deals — carries the full disclosure pack. For mid-market operators raising above $250,000, the deal is outside the regime and disclosure is back to whatever the funder volunteers.

What the disclosure must contain

Connecticut's required disclosure parallels the structures seen in the earlier state laws. The covered fields:

Total amount of commercial financingand disbursement amount — capital offered and net amount delivered.

Finance charge — total dollar cost of the financing.

APR-equivalent — annualized rate calculated under prescribed methodology for indeterminate-term products and computed directly for fixed-payment products.

Term — contractual term for fixed products, estimated term for MCAs and similar.

Payment schedule — payment amount, frequency, and number.

Prepayment description — whether the recipient can prepay and whether prepayment reduces the dollar cost.

The disclosure must be delivered before the contract is signed, and the recipient typically signs the disclosure as acknowledgment of receipt.

Broker registration as a distinct regime

The other defining feature of the Connecticut framework is the broker registration regime. Brokers facilitating covered commercial financing to Connecticut recipients must register with the Connecticut Department of Banking. Registration is a precondition to operating in the state — a broker not registered in Connecticut cannot legitimately shop a deal to a Connecticut merchant.

For Connecticut operators, this creates a useful pre-deal verification step. Before signing with a broker — or even taking calls from one in earnest — the merchant can confirm registration through the Department of Banking. A broker who can't be found in the registry is operating outside the framework, and that's a meaningful signal regardless of the headline numbers on their offer.

The broker disclosure obligations extend to compensation in the transaction. Merchants shopping a Connecticut deal should expect to see broker-specific disclosure documents alongside the funder's offer disclosure, surfacing how the broker is paid in the deal.

How Connecticut compares to the other state regimes

The Connecticut framework lands closest in spirit to New York's CFDL — both states put serious weight on the broker side of the market — but with two key differences. New York's threshold is $2.5M, ten times Connecticut's $250K. And New York's regulator is NYDFS, while Connecticut's is the Department of Banking, with different staff, different examination practices, and different complaint processes.

Compared to California, Connecticut has a lower threshold and a more distinct broker registration regime. Compared to Virginia, Connecticut's threshold is also lower and the disclosure depth is broadly comparable. Compared to Utah, Connecticut adds more granular cost disclosure on top of its registration model.

The practical implication for a multi-state operator is the now-familiar story: six state regimes, six sets of forms, six methodologies, six regulators. The infrastructure cost of being compliant in all of them is real. Funders who historically operated without this discipline have either invested in compliance systems or pulled back from the affected states.

What a Connecticut operator should expect

A Connecticut merchant receiving a covered offer in 2024 and beyond should see, at minimum: a standardized transactional disclosure delivered before contract signing; a broker disclosure if a broker is involved, including broker compensation; evidence of broker registration with the Connecticut Department of Banking; and clear plain-English statements of the cost fields outlined above.

If any element is missing, ask for it. A compliant funder or broker will produce the documentation within the same business day. A counterparty that cannot or will not is either operating outside Connecticut law or uncomfortable putting the numbers on paper — both of which are reasons to walk away or to file a complaint with the Department of Banking.

How Goliath approaches this

Goliath is a direct lender. We deliver clear cost disclosures on every offer regardless of which state the recipient operates in. In Connecticut specifically, our offers include the full disclosure pack required under the SB 1032 framework, and we work only with brokers properly registered with the Connecticut Department of Banking. Our internal standard has always been to put the numbers in plain English before signing — the Connecticut regime made that a legal floor in the state on July 1, 2024.

This article is general information, not legal advice. Commercial finance laws evolve quickly; consult licensed counsel in your jurisdiction before making decisions based on this content.