The New York CFDL —
what it changes, what it doesn't.

The New York Commercial Financing Disclosure Law — commonly referenced as the CFDL and originally introduced as Senate Bill 5470-B — was signed into law on December 23, 2020. Like California's SB 1235, the statute did not become operationally effective on signing. The bill directed the New York Department of Financial Services (NYDFS) to write detailed implementing regulations specifying the form, calculation methodology, and timing of required disclosures. Drafting those regulations took most of three years.

The original effective date in the statute was deferred multiple times as the rulemaking process worked through technical issues and industry comment. Disclosure obligations finally went live on August 1, 2023. From that date forward, every non-bank provider of covered commercial financing to a New York recipient has been required to deliver a standardized disclosure form before the contract is signed.

Who and what the CFDL covers

The CFDL applies to commercial financing transactions of $2,500,000 or less extended to a recipient with its principal place of business in New York. The covered product types include the same broad category set California covered: term loans, lines of credit, accounts receivable financing, factoring, asset-based lending, and merchant cash advances. The threshold is notably higher than California's $500,000 cap, which means many transactions that escape the California regime are squarely inside the New York one.

As with California, federally insured depository institutions — banks and credit unions — are excluded. Real-estate-secured financing is excluded. Certain de minimis transaction counts and certain technology service providers are also outside scope. What remains, again, is the entire non-bank commercial finance ecosystem doing business with New York operators.

The required disclosure fields

The NYDFS regulations require disclosure of a set of standardized data fields very similar to California's. The core elements are:

Amount financed — the actual capital delivered to the recipient net of any fees withheld at funding.

Finance charge — the total dollar cost of the financing, calculated as the total of all amounts the recipient is contractually obligated to pay minus the amount financed.

Annual percentage rate — the cost expressed as an annualized percentage rate, computed under the methodology prescribed in the regulations. For fixed-payment loans this is calculated directly. For products without a fixed term — primarily MCAs and similar receivables purchases — the regulations require an estimated APR using a prescribed assumed term methodology.

Payment amounts, frequency, and term— the dollar amount of each payment, the frequency, and either the contractual term or, for MCAs, the estimated term.

Average monthly cost — useful for quickly stress-testing the deal against the recipient's monthly cash flow.

Prepayment policy — a clear statement of whether the recipient can pay early and whether prepayment reduces the dollar cost. For most MCAs the answer is that prepayment does not reduce the total payback, and the CFDL forces that fact onto the page.

The broker piece — and why it matters

One of the most consequential pieces of the New York framework is the treatment of brokers. A large share of MCA and alternative finance volume in the United States is intermediated by independent broker shops — sometimes called ISOs — who shop a merchant's file across multiple funders and earn commission on closed deals. The CFDL brings these intermediaries into the disclosure regime. Brokers are subject to obligations relating to the information they provide to recipients and, in certain contexts, to disclosure of their compensation in the transaction.

The practical impact is that a New York merchant working with a broker should now have visibility into not only the funder's cost of capital, but also the broker's role in the deal. This is meaningful because broker compensation on MCAs can be material — frequently five to twelve points of the funded amount — and historically was invisible to the merchant. A deal that looks priced at a 1.40 factor may carry embedded broker compensation that the merchant never sees on the funder's contract. The CFDL framework is designed to surface that.

How New York differs from California

The two frameworks share the same philosophy and overlap heavily on data fields, but they are not identical. The differences a multi-state operator should know:

Threshold — NY $2.5M vs CA $500K. Mid- market deals in the $500K to $2.5M range fall under New York's regime but not California's.

Regulator — NYDFS in New York, DFPI in California. Different complaint portals, different examination approaches, and different enforcement histories.

APR methodology — the technical calculation rules for estimated APR on indeterminate-term products have some differences. A funder compliant in one state cannot simply reuse its forms in the other.

Broker rules — the New York framework gives somewhat more developed treatment to broker-facilitated transactions, although California has been catching up.

The net effect is that a serious multi-state funder maintains two parallel disclosure pipelines — one tuned to California, one to New York — plus a growing number of additional state-specific variants for Utah, Virginia, Georgia, Connecticut, and others.

What a compliant offer looks like

A New York operator receiving a compliant offer should see a separate, clearly labeled disclosure form alongside the contract package. The form contains all required data fields, identifies the funder, and is delivered before the recipient is asked to sign the financing contract. Typically the recipient signs the disclosure form as an acknowledgment of receipt; that signature is separate from the signature on the contract itself.

If an offer arrives without the disclosure, request it in writing. A compliant funder has the document ready and will send it within minutes. A funder that cannot or will not produce one is either not following New York law, or is uncomfortable putting the numbers on paper. Both are reasons to walk away.

Enforcement and complaints

NYDFS is the enforcement authority. The Department has supervisory and investigative powers and can impose civil penalties, require corrective action, and refer matters for further action. Operators who believe they've received a non-compliant offer can file a complaint with NYDFS through its public complaint portal. The Department has taken a measured early enforcement posture but has been clear that compliance is expected.

How Goliath approaches this

Goliath is a direct lender. We deliver clear cost disclosures on every offer regardless of the recipient's state, and our New York offers include the full CFDL-aligned disclosure pack — amount financed, finance charge, estimated APR, payment schedule, average monthly cost, and prepayment terms. We believe a merchant making a six-figure decision deserves to see the numbers in plain English before signing, not after. The regulations changed the floor on the industry; our internal standard already required it.

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.