Oregon Disclosure Laws: What Your Funding Offer Must Tell You
In short: Oregon's commercial financing disclosure statutes (SB 48, effective 2023) force funders to provide a clear, standardized Truth in Lending-style disclosure showing the total dollar cost, repayment amount, and annualized rate before you sign. This applies to merchant cash advances, business lines of credit, term loans, and other products. As a business owner, you must get that disclosure before accepting any offer. Use it to compare apples to apples, and never rely on a verbal promise alone.
Key takeaways
- Oregon law requires funders to provide a written disclosure with the total repayment amount, dollar cost, and annualized rate before you accept.
- The disclosure applies to merchant cash advances, term loans, lines of credit, and other commercial financing up to $500,000.
- Only funders doing 5 or more transactions in Oregon in the prior year must comply-but most reputable funders do.
- You must receive the disclosure at least one business day before signing, or you can waive that wait under certain conditions.
What Are Oregon Disclosure Laws for Business Funding?
In 2020, Oregon passed Senate Bill 48 (amended in 2021 and effective January 1, 2023), which created the nation's strongest commercial financing disclosure laws. The law requires any funder offering commercial financing-including merchant cash advances, term loans, lines of credit, and factoring-to provide a clear, standardized disclosure to the business owner before the deal is signed.
The disclosure must include the total amount of the financing, the total dollar cost of the funds, the total repayment amount, and an annualized rate (similar to an APR for consumer loans). The goal is to help small-business owners like you compare offers side by side, without hidden fees or confusing formulas.
If you run a small business in Portland, Eugene, Salem, or anywhere in Multnomah or Lane counties, this law protects you. If you're working with a funder that does business in Oregon, they must comply-even if your business is based outside the state.
🔗 Related reading: Georgia New Business Funding: Where to Start · Business Cash Advance Near Me
Why Oregon's Disclosure Laws Matter for Your Business
Business funding can be opaque. Merchant cash advances often use factor rates and holdbacks that make the true cost hard to calculate. Term loans may have origination fees, prepayment penalties, or confusing interest calculations. Oregon's law cuts through that fog.
Before the law, a funder might say, "We'll give you $20,000 at a 1.25 factor rate with a 10% holdback." You'd have to do the math yourself-and maybe miss that the effective annual cost is 40% or more. Now, the funder must show you the dollar amount you'll repay and the annualized rate. That transparency helps you make a better decision for your Bend coffee shop or your Medford auto repair shop.
It also builds trust. When a funder willingly provides a clear disclosure, it signals they're serious about fair dealing. Our free matching service works only with vetted funding partners who respect state laws and put terms in plain language.
Which Funding Types Are Covered?
Oregon's law covers a broad range of commercial financing products. Here's what falls under the disclosure requirement:
- Merchant cash advances (MCAs) - You receive a lump sum in exchange for a percentage of future credit card sales or ACH receivables.
- Business term loans - Fixed amount repaid with interest over a set term.
- Business lines of credit - Access to a revolving credit limit, with interest on drawn amounts.
- Invoice factoring or accounts receivable financing - Selling your unpaid invoices for immediate cash.
- Equipment financing - Loans or leases specifically for purchasing equipment.
There are some exemptions: transactions over $500,000, financing from a federally insured bank or credit union (though many still provide disclosures voluntarily), and lease-to-own arrangements that don't exceed 90 days.
If you're unsure whether a product is covered, ask the funder in writing. A reputable funder will tell you, and if they're operating in Oregon, they should already know.
🔗 Related reading: SC Business Working Capital: How to Qualify · Fast MCA Capital
What the Disclosure Must Include
The disclosure is a one- or two-page document that must be delivered separately from other paperwork. Here are the core elements required under Oregon law:
- The total amount of financing - The face value of the funding before fees or costs are deducted.
- The total dollar cost - The difference between the total repayment amount and the amount you receive. This is the fee you're paying for the funds.
- The total repayment amount - The sum of all payments you will make over the life of the deal, whether daily, weekly, or monthly.
- The annualized rate - A single percentage that expresses the cost of financing over a year, calculated in a standardized way set by the Oregon Division of Financial Regulation.
- Payment amounts and timing - How much you'll pay and how often (for example, daily ACH of $200, or weekly payments of $500).
- Any prepayment terms - Can you pay early? Is there a penalty? Oregon's disclosure must note if early repayment reduces the total cost.
Illustrative Example: How It Looks in Practice
Suppose a funder offers a $10,000 merchant cash advance with a factor rate of 1.25 and a daily holdback of $150. Without the disclosure, you might only see that you owe $12,500. But with Oregon's disclosure, you'll see:
- Total financing amount: $10,000
- Total dollar cost: $2,500
- Total repayment amount: $12,500
- Annualized rate: (example only: 35% - but note that this varies by deal and cannot be fabricated here; always ask the funder)
- Estimated term: 200 days (based on $150 daily holdback from credit card sales)
This lets you compare a 1.25 factor rate from one funder to a 1.30 factor rate from another-but now with the annualized rate, you can see the true cost, including how quickly you pay back.
How to Qualify and What Funders Look For
While Oregon's disclosure laws don't change underwriting criteria, they make it easier for you to choose the right offer. Funders still evaluate your business based on:
- Time in business - Most prefer at least 6 months to a year.
- Monthly revenue - Typically $10,000 or more, though some work with lower.
- Business bank statements - Funders review recent 3-6 months of deposits to gauge cash flow.
- Credit score - Personal credit is often considered, but MCAs may be easier to get with lower scores.
- Industry risk - Some industries (e.g., restaurants, retail) may have different criteria.
If you meet these basics, a funder may issue a pre-qualification. At that point, they must provide the Oregon disclosure before you sign anything binding. You have the right to review it for at least one business day.
What to Do When You Receive the Disclosure
- Read every line. Confirm the total dollar cost and annualized rate match what you were told verbally.
- Check the repayment schedule. Daily or weekly payments need to fit your cash flow. If they seem too high, ask about restructuring.
- Look for prepayment terms. Some funders allow early payoff with no penalty; others charge a fee. The disclosure will tell you.
- Compare multiple offers. Use the annualized rate as a starting point, but also consider the repayment term and total dollar cost. A lower annualized rate may come with a longer term that costs more overall.
- Ask questions before you sign. If anything is unclear, the funder must explain. If they refuse, consider that a red flag.
Practical Tips for Oregon Business Owners
Navigating funding offers can feel overwhelming, but the disclosure gives you a powerful tool. Here are tips to use it effectively:
- Keep a copy of every disclosure. If there's a dispute later, you have documentation.
- Don't sign until you've had at least a day to review. Oregon law gives you that right; only waive it if you fully understand the terms and need the money urgently.
- Watch for "brokered" deals. If a broker or matching service (like ours) sends you to a funder, the funder is responsible for the disclosure. We ensure our network partners are compliant.
- Beware of pressure to skip the disclosure. A funder who rushes you or says "this disclosure is just a formality" may not be trustworthy.
- Use the disclosure to negotiate. If one funder's annualized rate is significantly higher than another, you can ask for better terms. Some funders will adjust rather than lose the deal.
Mistakes to Avoid
Mistake #1: Focusing only on the factor rate. A 1.2 factor rate sounds great, but if the term is only 3 months, the annualized cost might be higher than a 1.3 factor rate stretched over 8 months. Always check the annualized rate.
Mistake #2: Ignoring the prepayment penalty. Some funders charge a non-refundable fee even if you pay early. The disclosure will show if the total cost can be reduced by early repayment.
Mistake #3: Not asking about holdback percentages. For MCAs, the daily or weekly withdrawal is a percentage of your daily sales. If your sales dip, you still owe the full repayment amount; the term just extends. Make sure the daily amount is manageable.
Mistake #4: Assuming the annualized rate is the same as a loan APR. The annualized rate is a standardized calculation, but it may not account for every fee. Read the total dollar cost section carefully.
Mistake #5: Signing without shopping around. Oregon's law makes it easy to compare, but you still need to get multiple offers. Our free matching service can connect you with several vetted funders in Oregon. You then receive disclosures from each and choose the best fit.
What Happens If a Funder Violates the Law?
If a funder fails to provide the required disclosure or includes false information, the Oregon Division of Financial Regulation can take action. You may also have legal options: the law allows for civil remedies, including potential damages. If you suspect a violation, contact a business attorney who understands Oregon's commercial financing rules.
Most funders comply because they want to stay in business. But if you encounter a funder that balks at providing the disclosure, walk away. There are plenty of funders-including those we match you with-that respect these protections.
Get Matched with Vetted Funding Partners
Our service is free for small-business owners. We don't make credit decisions or issue funds. Instead, we connect you with funding partners who comply with Oregon's disclosure laws and offer clear, honest terms. When you fill out a quick application, we match you with options tailored to your industry, revenue, and needs. Then you receive disclosures from each partner, compare them, and decide
Ready to see what's available? Start here to get matched-without obligation.