The best business debt settlement companies in Utah should know Utah's Commercial Financing Registration and Disclosure Act, and able to help pressure your MCA funder into a better deal by confirming if they are properly registered. They should also know about the 30 day period after a judgment is filed in Utah, and how you can still declare your homestead exemption before your house is sold.
Utah's Commercial Financing Registration and Disclosure Act (Utah Code Title 7, Chapter 27) was enacted in 2022, took effect January 1, 2023, and was amended in 2024. This law applies to MCAs, which count as an "accounts receivable purchase transaction," a transaction in which a business sells all or a portion of its accounts or payment intangibles at a discount.
What does Utah's commercial financing law require of MCA funders?
If the MCA funder has closed more than 5 commercial financing deals in Utah in the current calendar year, they need to register with Utah's Dept. of Financial Institutions (DFI) and renew every year by December 31st. The registration statement designates an agent in Utah for service of process and discloses any convictions for fraud, dishonesty, or money laundering for the funder or its principals.
Utah Code 7-27-202 disclosure requirements before signing include:
- Total amount of funds to be provided to the borrower, and the amount actually provided if less
- Total amount of repayment to the funder
- Total dollar cost of the commercial financing (repayment minus funds provided)
- Method, frequency and amount of payments, or the estimated initial payment if variable
- Whether there are costs or discounts for prepayments, with the contract paragraph where that is disclosed
- If variable payments, the contract must also include how the amount is determined and what causes the amounts to vary
No APR is required. The Utah DFI's FAQ says they have no rules on how to make these disclosures, and are not planning any.
How do business debt settlement companies in Utah check a funder's registration?
Business debt settlement companies in Utah (or you) can check if a funder is registered at NMLS Consumer Access. The Utah DFI issues no license number or certificate and directs business owners there. Exempt funders include banks (and their subsidiaries regulated by a federal banking agency), financing secured by real estate, financing over $1,000,000, and funders who have done 5 or fewer transactions in any 12 month period.
Does a missing registration give you leverage in a settlement?
To a certain extent, yes. Utah Code 7-27-301 says that a violation of this law does not affect the enforceability of the underlying agreement, and does not give you a private right of action. So a business debt settlement company in Utah saying that an unregistered funder cannot collect from you is misinterpreting the law.
What you can do is threaten regulatory action. The DFI will accept a complaint, and if an unregistered funder still has not registered 30 days after the DFI notifies it, the DFI can impose a $500 fine, or $500 for each office in Utah. Other violations carry a civil penalty of $500 each, up to $20,000 for each set of transaction documents, or $1,000 each up to $50,000 after a prior written notice. So if the funder left out the total dollar cost, or the contract has no formula for its variable payments, your business debt settlement company or lawyer should document that before negotiating.
Does Utah cap interest on business financing?
No. Under Utah Code 15-1-1, "the parties to a lawful written, verbal, or implied contract may agree upon any rate of interest for the contract." Even if the MCA was a loan Utah law would set no rate ceiling. See what happens when the contract states New York law.
Where will a funder sue a Utah business, and how fast can it collect?
The majority of funders will sue in New York under the forum clause and then file the New York judgment in Utah pursuant to the Utah Foreign Judgment Act, with the clerk of any district court in the state. The clerk will mail notice to you at your last known address. No execution can issue for 30 days after filing, so you have 30 days to settle before the funder can levy your bank account. For judgments filed on or after May 7, 2025, interest accrues at the Utah Code 15-1-4 rate unless the contract specifies another rate (Utah Code 78B-5-302).
A contract suit of $300,000 or more can go to the Business and Chancery Court, which has statewide jurisdiction. If the suit is in Salt Lake County it will be in the Third Judicial District, which also covers Summit and Tooele Counties. Because Utah still allows confessions of judgment, Utah residents should not expect the same protection that New York grants to non-residents, which our New York guide explains.
How much does Utah protect a guarantor's home and assets?
Not much. Utah has a $42,000 homestead exemption for your primary residence which is adjusted each year for inflation. The State Auditor publishes the current amount. If you and your spouse own the home together you still can't exceed $84,000. You have to record a declaration of homestead with the county recorder or serve the sheriff with one in order to claim it. The exemption doesn't apply to a deed of trust you put up with the funder because that is a consensual lien.
Other exemptions include retirement accounts, $5,000 in tools of the trade and $3,000 in one motor vehicle. If you have a home, settle before judgment, because Utah's homestead exemption is small next to many states. A good debt settlement provider will make sure you have a declaration of homestead filed if a notice of an execution sale on your home ever arrives.
Frequently Asked Questions
How do I check whether my MCA funder is registered in Utah?
Go to NMLS Consumer Access and put in the name of the funder. If you can't find the funder it may mean they haven't filed, their filing is pending or they are exempt. You can always email the DFI at msb.dfi@utah.gov or call (801) 538-8830.
If my funder isn't registered, do I still have to pay?
Yes, Utah Code 7-27-301 says a violation of the Act doesn't affect the enforceability of the underlying agreement. You can still file a complaint with the DFI and use it in negotiations.
Can a funder get a confession of judgment against me in Utah?
Yes, Utah Code 78B-5-205 still allows judgments by confession, and Utah Rule of Civil Procedure 58A(i) only requires "a statement, verified by the defendant" stating the claim and the sum due, which the clerk then signs as a judgment.