New Jersey Reintroduces APR Disclosure Bill for Commercial Financing

Senator Troy Singleton has reintroduced commercial financing APR disclosure legislation as Senate Bill 1760 in New Jersey's 2026-2027 legislative session.¹ The bill requires providers of sales-based financing, factoring transactions, and other commercial financing products to disclose APR calculations using Regulation Z methodology—joining a growing patchwork of state disclosure requirements that alternative lenders must navigate.²

• Mandatory APR disclosure: The bill removes the prior option to disclose "total dollar cost" as an alternative—APR disclosure is now mandatory for covered transactions.³

• Broad product coverage: Applies to sales-based financing (MCAs), factoring, open-end financing, closed-end financing, and finance leases.⁴

• Regulation Z methodology: APR must be calculated per 12 C.F.R. §1026.22, the same methodology used for consumer credit under TILA.²

• Exemption thresholds: Transactions exceeding $500,000 and providers completing five or fewer NJ deals annually are exempt.⁴

• Broker disclosure requirements: Broker fees must be disclosed separately from financing contracts prior to consummation.²

• Legislative momentum: The prior version (S1397) passed the Senate Commerce Committee in October 2024 before being amended in December 2024.⁵

The bill's reintroduction signals continued legislative intent in a state where Democrats control the Senate, Assembly, and Governor's office.⁶ For alternative lenders already compliant with California and New York disclosure requirements, New Jersey adds another jurisdiction to the compliance matrix—but the exemption thresholds provide meaningful carve-outs for larger-ticket transactions.

What Alternative Business Lenders Need to Know

Where Does This Fit in the Multi-State Compliance Landscape?

New Jersey's S1760 joins an expanding web of state-level commercial financing disclosure requirements. As of January 2026, at least a dozen jurisdictions have active or pending commercial financing disclosure laws: California, New York, Utah, Virginia, Florida, Georgia, Connecticut, Kansas, Missouri, and now New Jersey's renewed push.¹¹ The CFPB has confirmed these state laws are not preempted by federal TILA, meaning lenders must comply with each state's specific requirements.¹³

The threshold variations matter significantly for deal structuring. California caps at $500,000.⁷ New York extends to $2.5 million.⁹ Utah covers up to $1 million.¹² New Jersey's $500,000 threshold mirrors California but adds the meaningful exemption for providers doing five or fewer NJ deals annually—essentially creating a de minimis exception for lenders with minimal Garden State exposure.⁴

What Changed from the 2024 Version?

The critical change in S1760 versus prior iterations: the removal of the "total dollar cost" disclosure alternative. Previous versions allowed providers to disclose either APR or total dollar cost for sales-based financing transactions.³ That flexibility is gone. APR disclosure is now mandatory across all covered product types.¹⁹

This aligns New Jersey with California and New York's more prescriptive approach rather than the total-cost-of-capital model adopted by Georgia, Florida, and Connecticut.¹⁶ For MCA providers who've argued that estimated APR calculations for revenue-based products are inherently misleading—an argument that failed in the Ninth Circuit in April 2025—this represents a continued regulatory headwind.¹⁴

How Must APR Be Calculated?

The bill mandates APR calculation per 12 C.F.R. §1026.22 of Regulation Z—the same actuarial method used for consumer credit.¹⁸ For sales-based financing, this creates inherent estimation challenges since repayment timing fluctuates with the merchant's revenue. The bill acknowledges this by requiring an "estimated APR" based on a fixed historical sales period, with clear disclosure of the assumptions underlying the calculation.²

New Jersey follows the Historical Method approach (using past sales data to project repayment timing) rather than requiring an Opt-In Method.⁴ For lenders already compliant with California's DFPI regulations, the methodology should be familiar—though the specific formatting requirements may differ once the NJ Commissioner prescribes disclosure forms.²²

What Does the SBFA v. DFPI Ruling Mean for Legal Challenges?

The Small Business Finance Association's challenge to California's commercial financing disclosure law ended definitively in April 2025 when the Ninth Circuit upheld the DFPI's regulations.¹⁴ The SBFA had argued that mandatory APR disclosures for non-loan products (like MCAs) violate the First Amendment by compelling inaccurate speech, and that TILA preempts state-level APR definitions.¹⁵

Both arguments failed. The court found the disclosures were "purely factual" and that the SBFA failed to demonstrate the compelled information was misleading or controversial.¹⁴ The CFPB's March 2023 determination that state commercial financing disclosure laws don't conflict with TILA received judicial deference.¹³ For operators hoping litigation would unwind these requirements: that door is effectively closed. Compliance is now the only path forward.

Which Segments Face the Largest Compliance Burden?

MCA providers and factoring companies operating in the sub-$500K space face the heaviest lift. The bill covers "sales-based financing" explicitly—defined as transactions where repayment fluctuates based on the recipient's sales or revenue.² Daily or weekly ACH remittance structures typical of MCA products fall squarely within scope.¹⁷

Equipment financers may catch a break depending on structuring. The bill exempts transactions meeting the definition of a "finance lease" under N.J.S.12A:2A-103 if they exceed certain thresholds.⁴ But lenders offering equipment financing structured as loans or conditional sales agreements remain covered.

Banks remain exempt—the disclosure requirements apply to "providers," which excludes depository institutions.¹¹ But the bank partnership model doesn't provide a clean escape: if you're a non-bank platform arranging financing through a bank partner via an online lending platform you administer, you may still be a "provider" depending on how the economics and control structures are documented.²²

What Do Brokers Need to Disclose?

The bill imposes separate disclosure obligations on brokers who arrange commercial financing. Broker fees must be disclosed to prospective applicants separately from the financing contract and prior to transaction consummation.² This mirrors requirements in New York and California that have forced ISO compensation transparency into the light.⁹

For funders relying on ISO channels, this means ensuring your broker agreements incorporate compliant disclosure workflows. The days of undisclosed broker compensation embedded in pricing are numbered across an expanding list of jurisdictions.²¹

What's the Compliance Timeline?

S1760 was introduced on January 13, 2026, and referred to the Senate Commerce Committee.¹ No hearing dates have been announced as of this writing. Given the legislative history—S1397 passed the Commerce Committee in October 2024 before dying in the prior session—there's reasonable probability this version advances.⁵

However, even if S1760 passes both chambers and receives the Governor's signature in 2026, implementation typically requires the NJ Commissioner of Banking and Insurance to prescribe specific disclosure forms. California's experience—where SB 1235 passed in 2018 but final DFPI regulations didn't take effect until December 2022—suggests a multi-year runway between enactment and enforcement is realistic.²²

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