California small businesses can access merchant cash advances (24–48 hrs, 500+ FICO), online business loans, SBA loans, equipment financing, factoring, and state programs through CalOSBA. California's SB 1235 law (implemented 2022) requires any commercial financing provider to give CA businesses a standardized disclosure — including APR equivalent — before you sign any financing of $500,000 or less. This is the strongest commercial borrower protection in the country.
California SB 1235: Your Commercial Financing Disclosure Rights
California SB 1235 (Signed 2018, Implemented 2022)
California SB 1235 is the nation's first law requiring APR-equivalent disclosure for commercial financing products — predating New York's similar law by several years. It applies to providers of commercial financing of $500,000 or less to California businesses or individuals for commercial purposes.
Who it covers: Merchant cash advances, accounts receivable factoring, sales-based financing, asset-based lending, and commercial loans of $500,000 or less offered to California businesses.
Key requirement: Providers must give you a standardized disclosure — including an estimated APR — before you sign. This was groundbreaking because MCA and other alternative products had never been required to disclose cost in APR terms before.
What California Requires Funders to Disclose
SB 1235 Required Disclosures (Financing $500K or Less)
- Total amount of funds provided — exact dollar amount you receive
- Total amount owed — the complete repayment obligation
- Finance charge — cost of financing in dollar terms
- Payment frequency and amounts — how often and how much
- Term — repayment period (estimated for MCA)
- Estimated APR — annualized cost rate (most significant CA requirement — no other state requires APR disclosure for MCA)
- Prepayment terms — penalties or discounts for early repayment
- Broker compensation — if a broker is involved, their fee must be disclosed
The APR disclosure requirement is notable: because MCA repayment is revenue-variable (faster repayment in strong months), APR calculation requires an assumption about repayment speed. Providers must disclose the estimated APR based on reasonable repayment timeline assumptions. This allows California businesses to compare MCA cost to other financing on a standardized basis.
Business Loan Types Available in California
| Loan Type | Min. FICO | Speed | SB 1235 Required? |
|---|---|---|---|
| Merchant Cash Advance | 500+ | 24–48 hrs | Yes (under $500K) |
| Invoice Factoring | 500+ | 24–48 hrs | Yes (under $500K) |
| Online Short-Term Loan | 600+ | 1–3 days | Yes (under $500K) |
| Equipment Financing | 575+ | 2–5 days | Yes (under $500K) |
| Business LOC (online) | 600+ | 2–5 days | Yes (under $500K) |
| SBA 7(a) Loan | 650+ | 30–90 days | Exempt (banking institution) |
| CalOSBA Programs | Varies | Weeks | N/A — state program |
| CDFI Loans | Varies | Weeks | Yes if under $500K |
Serving California Businesses Statewide
California Business Funding
$15K–$2M. SB 1235 compliant. 24–48 hour decisions. All CA businesses welcome.
Apply NowFrequently Asked Questions
- What is California SB 1235?
- California SB 1235 (signed 2018, fully implemented 2022) is California's commercial financing disclosure law — the first in the nation to require APR disclosure for commercial financing products including MCA. Providers of commercial financing of $500,000 or less to California businesses must disclose: total amount financed, total owed, finance charge, payment terms, estimated term, estimated APR, prepayment terms, and broker compensation.
- What business loans are available for California small businesses?
- Full spectrum: merchant cash advances (24–48 hrs, 500+ FICO), online term loans, invoice factoring, equipment financing, business lines of credit, SBA loans (30–90 days, lower rates), CalOSBA programs, and CDFI loans. California's large population means more lenders compete for CA borrowers. The fastest options are MCA and invoice factoring; the cheapest are SBA loans and state programs.
- Does SB 1235 apply to all business loans in California?
- SB 1235 applies to commercial financing of $500,000 or less to California businesses for commercial purposes. It covers MCA, factoring, sales-based financing, asset-based lending, and commercial loans. Exemptions include: financing over $500,000, certain banking institution products, real estate secured transactions, and other specific categories. If you're receiving commercial financing of $500K or less in California, you should receive an SB 1235 disclosure before signing.
How MCA Works for California Businesses
California SB 1235 (effective December 2022) requires MCA providers to deliver a written disclosure of the advance amount, total repayment, estimated APR equivalent, payment frequency, and prepayment terms before funding — the strongest MCA disclosure law in the country. Los Angeles, San Francisco, San Diego, San Jose, Fresno, and Sacramento businesses should always request and read this disclosure before signing. T.A.G. provides SB 1235-compliant advances funded in 24–72 hours.
- Technology (Silicon Valley, LA Tech)
- $100K–$500K/mo → $75,000–$750,000. Startup services, SaaS, and tech supply chain companies.
- Restaurants and Hospitality
- $70K–$200K/mo → $52,500–$300,000. LA, SF, San Diego dining markets are among the highest-revenue per seat nationally.
- Entertainment and Creative
- $80K–$250K/mo → $60,000–$375,000. Production services, post-production, talent management, music.
- Healthcare
- $85K–$250K/mo → $63,750–$375,000. Independent practices across all CA regions.
- Construction
- $90K–$300K/mo → $67,500–$450,000. Southern CA residential market and Northern CA commercial development.
- How does California SB 1235 protect California business owners?
- California SB 1235 (effective December 2022) was the first state MCA disclosure law and remains the most comprehensive. MCA providers must deliver a written disclosure — before you sign — that includes the advance amount, total repayment, estimated APR, payment frequency, holdback rate, and prepayment terms. The DFPI (California Department of Financial Protection and Innovation) enforces compliance. Always request this disclosure and compare it against other offers before signing.
- How fast can a California small business get funded?
- Most CA businesses receive an approval decision within 4–8 hours and funds within 24–72 hours. T.A.G. funds Los Angeles, San Francisco, San Diego, San Jose, Fresno, Sacramento, Long Beach, Oakland, Bakersfield, Anaheim, and all California cities with the same national approval standards. California disclosure requirements add no delay to T.A.G.'s process — we provide the SB 1235 disclosure at the offer stage, not after signing.