Texas and Louisiana Pass Revenue-Based Financing Disclosure Laws

Texas and Louisiana have joined the growing list of states that have passed laws requiring disclosures in connection with commercial purpose, revenue-based financing transactions. The following is what you need to know.

Texas

The will require companies offering commercial sales-based financing to provide specified disclosures beginning September 1, 2025. An additional requirement that financiers and brokers register with the Texas Office of Consumer Credit Commissioner takes effect December 31, 2026.

Although we wrote about the Texas law before it was enacted, a few late changes to the law are of note. Thankfully, the enacted version does not include a prior provision stating that fees and charges imposed in connection with sales-based financing transactions constitute “interest” for purposes of the state’s usury law.

On the other hand, the enacted law includes a provision prohibiting sales-based financing providers from automatically debiting a merchant’s deposit account unless the provider holds a validly perfected, first priority security interest in the account. This requirement will be difficult for most sales-based financing providers to comply with, as a control agreement, including the depository bank as a party, is required to perfect a security interest in a deposit account. In light of this prohibition, many sales-based financing providers are considering alternative structures for offering financing in Texas, including using a payment card “splitting” model, offering traditional installment loans or requiring automatic “push” rather than “pull” remittances.

Louisiana

The neighboring state of Louisiana also recently passed which, effective August 1, 2025, will require revenue-based financing providers to disclose six specified pieces of information at or before consummation of each financing transaction, including the amount of funds provided to the business and the total dollar cost of the financing. The law defines “revenue-based financing” as an agreement under which a person engaged in a commercial enterprise sells or agrees to forward a percentage of sales, revenue or income, and the person’s payment obligation increases and decreases according to the volume of sales made or revenue or income received. 

The law does not require disclosure of an annual percentage rate, as required by some other commercial financing disclosure laws passed to date. Also, the law does not include express rulemaking or enforcement authority and helpfully clarifies that amounts charged in a revenue-based financing transaction are not “interest.”

If you have any questions or would like assistance with compliance, please contact any of the authors or the Manatt professional with whom you work.