Texas · Regulatory Update
Business Funding in Texas — Where Things Stand After HB 700
Texas signed HB 700 in June 2025 and the law is reshaping how merchant cash advances work in the state — primarily because it removed the usury exemption that traditionally protected MCAs from Texas's 18% interest-rate cap. Commera is not currently brokering MCAs in Texas while we evaluate whether the product remains viable under the new regulatory framework. This page exists so Texas owners can find honest context, not a sales pitch.
Texas owner? Email us at contact@commerafunding.com — we can sometimes refer to a partner currently working through the new framework.
By Filip Kozina · Co-Founder, Commera Funding
Reviewed June 8, 2026
What Texas's commercial financing law means for you
Texas HB 700 (Commercial Financing Disclosure + Broker Registration)
Effective: Signed June 2025; broker-registration provisions effective 2025–2026
Citation: Texas HB 700 (2025); broker registration handled by the Texas Office of Consumer Credit Commissioner (OCCC)
HB 700 does three big things at once: (1) requires commercial-financing providers and brokers to register with the Texas OCCC, (2) imposes commercial-financing disclosure requirements similar to other states, AND (3) removes the historical usury exemption for MCAs — which means MCA factor rates may now be subject to Texas's 18% interest-rate cap, depending on how regulators and courts interpret 'sales-based financing' vs 'loan.' That last change is the one upending the market.
Applicability
Applies to commercial financing in Texas, with the broker-registration requirement extending to anyone marketing or facilitating these transactions to Texas businesses.
What you should expect
- Many established MCA funders have paused new Texas originations while they evaluate compliance
- Some funders are restructuring their Texas product (longer terms, lower factor rates) to fit within the 18% framework
- Expect the regulatory landscape to keep changing — final OCCC rulemaking and the first round of enforcement actions will shape what 'compliant' looks like
Plain-English context, not legal advice. HB 700 is new and the interpretive landscape is moving. Verify any Texas-specific compliance question with qualified counsel.
Common questions from Texas owners
Does HB 700 ban merchant cash advances in Texas?
No — HB 700 doesn't ban MCAs outright. But by removing the usury exemption that historically protected MCAs from Texas's 18% interest-rate cap, the law makes it unclear whether typical MCA factor rates can remain legal. Some funders are pausing Texas originations; others are restructuring to fit. The market is in flux.
Why isn't Commera currently brokering in Texas?
We're a small, founder-run broker. We don't have the legal budget to litigate ambiguous interpretive questions in real time. Until the OCCC rulemaking finalizes and we can verify which of our funder partners can compliantly serve Texas businesses, we're staying on the sidelines for Texas applications. We'd rather wait than match a TX owner with a funder that's about to get shut down mid-deal.
What should a Texas business owner do in the meantime?
Options that aren't materially affected by HB 700: SBA loans (federally regulated, exempt), traditional bank lines of credit (bank-issued financing is exempt), and invoice factoring (operates differently from MCA and is treated differently under TX law). If you'd like, email us at contact@commerafunding.com — we can sometimes refer to a partner with a TX presence that's working through the new framework.
When will Commera serve Texas again?
When we have funder partners that can show clean compliance with the new framework, and clear OCCC guidance on what's permissible. We don't have a hard date.
Texas business owner? Get in touch.
We can sometimes refer to a partner currently brokering in Texas under the new framework. Email us — no fees, no pitch.
Email contact@commerafunding.com