Alert

December 6, 2024

Missouri Regulator Confirms February 28, 2025, Effective Date for Commercial Financing Disclosures

The Missouri Division of Finance has informally confirmed that it does not plan to issue regulations to implement the state's new Commercial Financing Disclosure Law. As a result, the law will be effective on February 28, 2025, and commercial financing providers will not be required to adopt a Missouri-specific disclosure form. This is good news for commercial financing providers who likely can use their Kansas disclosure form in Missouri as well.

The Missouri law requires disclosures by providers of sales-based financing, factoring, and commercial-purpose closed-end and open-end loans. A provider is subject to the law if the provider originates more than five commercial financing transactions to businesses located in Missouri in a calendar year. Transactions of more than $500,000 are exempt.

Similar to the Kansas disclosure law, which took effect on July 1, 2024, Missouri will require disclosure of the following at or before consummation of a commercial financing transaction:

  • the total funds provided to the recipient;
  • the funds disbursed, if less than the funds provided;
  • the total amount payable to the provider under the agreement;
  • the total cost of the financing, expressed in dollars;
  • the payment schedule or estimated payment schedule; and
  • whether the recipient will or may pay a cost or receive a discount if the recipient prepays.

The law does not require disclosure of actual or estimated APR.

Brokers must register with the Missouri Division of Finance and file surety bonds. The registration and bonding requirements do not apply to providers.

Violation of the new law is punishable by a fine of up to $500 per incident and up to $20,000 for all violations resulting from the use of the same set of documents or materials. If the violator has received written notice of a prior violation from the attorney general, the maximum fines increase to $1,000 per incident and $50,000 for all violations resulting from the use of the same set of documents or materials.