Texas HB 700: does my broker have to register by December 31?

Yes, if your broker arranges merchant cash advances or other revenue-based financing for Texas businesses. Texas HB 700 requires every provider and broker of commercial sales-based financing to register with the Office of Consumer Credit Commissioner, and businesses already operating must register by December 31, 2026. Registration runs through NMLS, the same national system used for mortgage licensing.

Texas is the first large state to register brokers this way, and its rules are among the broadest in the country. Here is what the law does, who it covers and what you can check before you sign.

What HB 700 covers

HB 700 adds Chapter 398 to the Texas Finance Code. The enrolled bill defines commercial sales-based financing as financing for a business purpose that is repaid as a percentage of sales or revenue, or through a fixed payment with a reconciliation process that adjusts payments to revenue. In plain terms: merchant cash advances, revenue-based financing and similar products.

The law took effect September 1, 2025. The OCCC's implementing rules took effect July 9, 2026, according to Manatt, and NMLS began accepting registrations on September 1, 2026, according to the OCCC.

The law does not cover:

• Banks, credit unions and their subsidiaries and affiliates
• Financing secured by real property
• Leases
• Certain financing of $50,000 or more to motor vehicle dealers and rental companies
• Financing a company provides for the products it makes or sells
• Lenders regulated under the Farm Credit Act

Term loans, SBA loans, equipment loans and lines of credit are outside HB 700 because they are not repaid as a share of sales.

Who must register

The enrolled bill defines a broker as a person who, for compensation or the expectation of compensation, obtains or offers to obtain sales-based financing from a provider for a business. A provider is the company that funds the financing or makes the specific offer.

Both must register before doing business in Texas, and the registration takes effect once the OCCC receives the completed form and the fee. Venable notes that Texas has no small volume exemption, so a broker that places one deal a year in Texas is covered just like a large shop. The law protects the business receiving the money, so a broker based in another state that arranges a merchant cash advance for a Texas company needs the Texas registration.

The registration asks for the business name and any assumed names, the principal office address, a Texas agent for service of process, and disclosure of certain judgments, orders and convictions tied to fraud, breach of trust or money laundering. Manatt reports the final rules also require a business plan and an individual filing for each key individual, meaning anyone who directs management and any owner of 10% or more.

Fees and renewal

For brokers, in one sentence: the OCCC's rules set a $1,000 initial fee and a $1,000 annual renewal, with renewals open November 1 to December 31 each year and a reinstatement window through February 28.

The OCCC page also notes that registrations are not transferable. If a brokerage is sold or forms a new entity, the new owner files a new registration.

What a provider must show you

HB 700 pairs registration with a disclosure. On any specific offer under $1,000,000, the provider must give you a written disclosure with eleven items, according to the enrolled bill:

1. Total amount of the financing
2. Disbursement amount, meaning what you actually receive
3. Finance charge
4. Total repayment amount
5. Estimated period for payments to equal the total repayment
6. Payment amounts and frequency, or for variable payments, the method and average projected monthly payment
7. Other fees outside the finance charge, such as draw, late and returned payment fees
8. Finance charge due on early payoff or refinancing
9. Additional fees on early payoff or refinancing
10. Collateral or security interest requirements
11. Whether the provider pays the broker directly, and how much

If a new offer requires paying off an existing balance, the provider must also show how much of the new money goes to that payoff. You sign the disclosure before the application is finalized.

Item 11 is worth reading closely. It tells you exactly what the funder is paying your broker on the deal. A broker who shares this openly is doing the job well.

Other protections in HB 700

Three more rules work in your favour:

• No confession of judgment. Any confession of judgment clause in a sales-based financing contract is void under HB 700.
• Limits on automatic debits. A provider or broker may not set up automatic debits from your deposit account unless it holds a perfected, first priority security interest. Manatt reports the rules treat a debit as automatic when it is authorized in advance to happen more than once.
• Penalties. The Commissioner can assess a civil penalty of up to $10,000 per violation, and can suspend or terminate a registration.

HB 700 does not cap pricing. The bill bars the Finance Commission from setting a maximum rate or fee for this financing, so the disclosure is your main tool for judging cost. Our guide to the true cost of a merchant cash advance shows how to read one.

What you can check as a business owner

Before you share bank statements with a broker for a merchant cash advance, take two minutes on these checks:

1. Ask for the NMLS number. Every Texas registrant has one, because the registration is filed in NMLS. A registered broker will give it to you right away.
2. Look it up. Search NMLS Consumer Access by company name or NMLS number. The OCCC also links a licensee search from its sales-based finance page.
3. Check the funder too. The provider making the offer must be registered as well, unless it is a bank or credit union.
4. Read item 11 on the disclosure. It shows what the funder pays the broker. Compare it with any fee the broker asks you to pay directly.
5. Watch the debit authorization. If the contract sets up recurring debits, ask how the provider meets the security interest rule.

From January 1, 2027, an active broker of sales-based financing in Texas that cannot show a registration is a clear signal to pause. Until then, brokers already in business are within the law while they file, and a registration takes effect as soon as the OCCC receives the completed form and fee.

Texas on the register

The register lists business loan brokerages across Texas, including Houston, with a register number, status and last checked date on every entry. As Texas registrations appear on NMLS Consumer Access, we link each entry to its public record. You can check a broker's standing by name, and brokers can claim their entry for free to add their NMLS number.