Maryland passed its commercial-financing disclosure law in 2025, and the law does exactly what it promises and nothing it does not. It requires the funder to state the cost of a merchant cash advance in terms the owner can read: the amount financed, the finance charge, the rate expressed the way the statute prescribes. The owner now knows the price. The owner is told it in writing, before signing, in a document built for the telling.
A disclosure names the thing. It does not cap the thing, and it does not stop the daily debit that the thing sets in motion. An owner can know to the dollar what a position costs and watch it withdraw from the operating account every morning regardless, because knowledge of a price was never the same as relief from it. The legislature wrote a label requirement. It did not write a usury cap. Those are different statutes, and Maryland passed one.
Disclosure Sits Beside The Confession, Not Above It
The disclosure law shares the file with a much older device. Maryland permits the confession of judgment in commercial contracts under conditions, and so the same agreement that now discloses its price may also entitle the funder to enter judgment on the signature, without a complaint the owner gets to answer, the moment the funder declares a default, which means an owner can be fully informed about the cost of a position and still learn of the judgment from the bank rather than the court, in a letter that arrives after the freeze rather than before it. There are limits on the practice. In practice they tend to slow the funder rather than stop it.
I have made this point in other states and it holds here. A protection that informs is not a protection that prevents.
The Recharacterization Argument Is The One That Moves Money
Underneath the disclosure and the confession sits the argument that actually reduces a balance, and it is older than both. The contract calls itself a purchase of future receivables, not a loan, and on that label the price walks past the usury statute, because a purchase carries a factor rate where a loan would carry interest, and only interest is capped. A disclosure law does not settle this question; it discloses a factor rate without deciding whether the factor rate is really interest wearing a different name. Whether a court recharacterizes the purchase as a loan turns on conduct: whether the reconciliation clause adjusts remittance to receipts as written, whether remittance is fixed in fact, whether the funder bore any of the risk a true buyer of receivables would bear. (The funder will insist it bought receivables and assumed the risk of their nonpayment; the remittance schedule, fixed and indifferent to receipts, frequently says the opposite.) When a court finds the purchase is a loan in substance, the usury statute returns, and a disclosed price becomes a disputed one.
The disclosure told the owner what the position cost. The recharacterization argument asks whether the funder was ever allowed to charge it.
A judgment against a business with an empty account is paper that costs money to enforce. Garnishment of a dry account returns a dry account. Enforcement consumes fees the funder pays whether or not it collects, and an owner who closes the doors pays no one, and the funder weighs all of that before it answers the phone. That arithmetic is the negotiation, and the firms ranked above are ranked on how clearly they work it, and on whether an attorney stands near enough to the table to make the recharacterization argument credible. Maryland gave its owners a better-lit room. The walls are in the same place. For the Maryland owner reading a disclosure and still watching the debit clear by autumn, the first call is the one that costs nothing and starts the only conversation that changes the number.