Merchant Cash Advance in Virginia: 2026 State Guide

Quick Answer: Virginia enacted HB 1027 (Sales-Based Financing Registration and Disclosure Act, effective July 1, 2022), creating the country’s strongest combined MCA protection for transactions under $500,000 — mandatory disclosure plus an outright ban on confession-of-judgment clauses and a requirement that disputes be heard in Virginia courts. Unlike California and New York, Virginia does not require APR disclosure (you receive total cost and payment structure, not an equivalent annual rate). Providers must register with the Virginia SCC. Factor rates typically run 1.15–1.50 (roughly 40–100%+ APR). Use the MCA calculator to convert any offer before signing.

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Virginia’s Regulatory Framework: What HB 1027 Does and Doesn’t Require

Virginia has approximately 818,450 small businesses — 99.5% of all businesses in the state — employing 1.6 million workers (45.4% of the private-sector workforce), according to the SBA’s 2025 Virginia Small Business Profile.

What HB 1027 requires: Virginia’s Sales-Based Financing Registration and Disclosure Act (HB 1027, signed by Governor Glenn Youngkin, effective July 1, 2022) applies to sales-based financing transactions — including MCAs structured as accounts receivable purchase agreements — for amounts under $500,000. Before closing any covered transaction, a provider must disclose in writing:

1. The total amount of the sales-based financing, and the disbursement amount if different (after any fees deducted or withheld at disbursement)
2. The finance charge
3. The total repayment amount (the disbursement amount plus the finance charge)
4. The estimated number of payments, based on the merchant’s projected sales volume
5. The payment amounts, based on projected sales volume (with different formats for fixed versus variable payment contracts)
6. A description of all other potential fees and charges not included in the finance charge — draw fees, late-payment fees, returned-payment fees, prepayment penalties
7. A description of prepayment and refinancing policies, including any prepayment penalty and how prepayment affects the finance charge
8. A description of any collateral requirements or security interests
9. A statement of whether the provider will pay compensation directly to a broker, and the amount of that compensation

Providers must register with the Virginia State Corporation Commission and pay a registration fee ($1,000 initially, $500 in subsequent years), starting November 1, 2022.

The COJ ban — Virginia’s most significant protection: HB 1027 explicitly prohibits confession-of-judgment clauses in covered MCA contracts. Any dispute between a provider and a Virginia business covered by HB 1027 must be litigated in Virginia courts. This closes the forum-selection route that MCA funders use in most other states — providers cannot route Virginia businesses into Ohio, New Jersey, or Utah courts to obtain a COJ judgment without notice.

What HB 1027 does not require:

• No APR disclosure — Virginia requires total cost and payment structure disclosure, but not an equivalent annual percentage rate. You know the total repayment before signing; you do not receive a rate you can compare against a bank loan at a glance
• No rate cap — HB 1027 imposes no ceiling on factor rates or effective APR
• No extended right of rescission — there is no cooling-off period built into HB 1027
• No coverage above $500,000 — for advances above the threshold, the disclosure requirements, COJ ban, and Virginia-courts mandate all fall away; treat those transactions as if in a no-regulation state

How Virginia compares to peer MCA markets:

State	Disclosure Law	APR Required?	COJ Status
Virginia	HB 1027 (July 2022) — 9-item total-cost disclosure	No (total cost + payment terms; no APR)	Banned for sub-$500K MCA; disputes must stay in VA courts
California	SB 1235 + SB 362 (Dec 2022 / Jan 2026)	Yes — estimated APR required	No statutory ban
New York	S5470B (Aug 2023)	Yes — estimated APR required	NY courts can’t file against out-of-state borrowers (CPLR § 3218)
Utah	SB 183 (Jan 2023) — total cost + payment terms	No	Permitted — Utah courts are a COJ bypass forum
Texas	HB 700 (Sept 2025) — dollar cost disclosure	Dollar cost, not APR	Banned statewide
North Carolina	None	No	NC courts won’t enforce pre-signed COJ; NC-residents protected from NY forum
Arizona	None	No	Limited — A.R.S. § 44-143 bars pre-execution COJ in AZ courts only
Georgia	SB 90 (Jan 2024) — total cost disclosure	No	No ban
Florida	HB 1353 (July 2023) — total cost disclosure	No	No ban

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What MCA Providers Must Disclose — and What That Disclosure Looks Like in Practice

Virginia’s nine-item disclosure creates a meaningful pre-signing document, but it does not automatically convert your MCA cost into an APR. Here is how to read a compliant Virginia disclosure:

Total financing and disbursement amount. The face amount of the advance — e.g., $75,000 — and the net disbursement if the two differ. If the provider deducts origination or processing fees at funding, the net disbursement may be $72,000 on a $75,000 advance. That gap is real cost the factor rate alone doesn’t capture.

Finance charge and total repayment amount. These are the numbers that matter most. The finance charge is the cost of the advance; the total repayment is the disbursement amount plus the finance charge. Divide (total repayment − advance amount) by the advance amount to get the factor-rate cost percentage, then use the MCA calculator to convert it to an APR based on your expected repayment timeline.

Estimated number and size of payments. Because MCA repayment is a percentage of daily sales, the “estimated” payment count depends on a projection of your revenue. Ask the provider what revenue assumption they used — a projection based on last month’s peak rather than your annual average inflates how fast repayment looks and makes the deal appear shorter than it is.

Other fees, prepayment terms, and collateral. HB 1027 also requires disclosure of any other fees not in the finance charge, the prepayment and refinancing policy (including any prepayment penalty), and any collateral requirement or security interest. Read these closely — a prepayment penalty can erase the savings of an early payoff, and a security interest in receivables or equipment changes your risk if the business slows.

Broker compensation. Virginia requires this to be disclosed separately. Industry-standard broker commissions run 2–10% of the advance amount — a $7,500 broker fee on a $75,000 advance is additional cost that many borrowers miss until they see this line.

The $500,000 threshold: If a provider quotes you an advance above $500,000 and says Virginia law requires a disclosure, they are technically going beyond statutory obligation. That is good practice — but if they do not provide one above the threshold, they are not violating HB 1027.

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Virginia’s Economy: Where MCA Demand Concentrates

Northern Virginia: Federal Contracting and Technology

The Northern Virginia corridor — Arlington, McLean, Tysons, Reston, Herndon, Chantilly, and Manassas — is one of the densest concentrations of defense and intelligence-related contracting in the world. Federal contracts account for more than 12% of Virginia’s economy (versus 4% nationally), and roughly 72% of those are in defense, national security, and intelligence.

Fifty-plus aerospace and defense companies operate here, alongside a sector-specific workforce of roughly 200,000 tech and defense workers. Companies like Leidos, CACI International, Booz Allen Hamilton, General Dynamics IT, ManTech, and Peraton anchor the contracting ecosystem; their supply chains include thousands of smaller IT services, cybersecurity, cloud, data analytics, and professional services firms.

Amazon’s HQ2 Phase 1 (National Landing, Arlington) is operational with approximately 8,500 employees. Phase 2 (PenPlace) remains on hold as of mid-2026 — Amazon added no incentive-eligible jobs in 2025 — but the surrounding tech and AI services ecosystem that built up in anticipation of HQ2 remains. Data center construction in Northern Virginia (the densest data center market in the world, with Loudoun County’s “Data Center Alley” hosting over 100 facilities) creates ongoing demand from construction subcontractors.

MCA demand pattern: Government contractors with confirmed prime contracts but 30–90 day payment cycles are consistent MCA users, though invoice factoring against government receivables at 1–4% is almost always cheaper. The real MCA borrowers in this corridor are the sub-tier suppliers and services firms — marketing agencies, IT staffing companies, HR consultants, facilities management firms — that don’t have government receivables to factor.

Hampton Roads: Defense Maritime and Military

Norfolk Naval Station (the world’s largest naval base), Naval Station Little Creek, Langley Air Force Base, and Newport News Shipbuilding (Huntington Ingalls Industries, ~19,000 employees) anchor Hampton Roads. The defense supply chain — ship repair, logistics, government transportation, food services, facility maintenance, IT — generates consistent small-business revenue with the payment-cycle patterns that produce MCA demand.

Virginia Beach (4.5 million annual visitors) and the coastal resort economy add a distinct second demand segment: tourism and hospitality businesses with sharp seasonal patterns where MCA’s percentage-of-revenue repayment adjusts to the winter trough — but at 40–80%+ APR.

Richmond: Healthcare, Finance, and Distribution

Richmond’s corporate anchor employers — Capital One (its West Creek campus in Goochland County is one of the company’s largest, though its HQ is in McLean; 10,000+ Virginia employees), CarMax (HQ), Dominion Energy (HQ), and Markel Group (HQ) — do not generate MCA demand directly. What they generate is an orbit of professional services, marketing, tech, and logistics firms that do.

Bon Secours Mercy Health (roughly 20,000 Virginia employees, 20+ hospitals and facilities) and HCA Virginia Health System anchor a large healthcare economy. Private practices, specialty clinics, urgent care operators, and behavioral health providers bridging 45–90 day insurance reimbursement cycles are consistent MCA users; healthcare accounts receivable financing at 1–4% of invoice face value is the comparison to make first.

Three illustrative APR scenarios for Virginia businesses

These examples use HB 1027 disclosure inputs to show the equivalent APR — the number the disclosure does not automatically provide:

Northern Virginia IT staffing firm: $80,000 advance at 1.22 factor rate = $97,600 total repayment ($17,600 cost). Estimated 9-month repayment based on revenue projection. Equivalent APR: approximately 29%. This is the low end of the Virginia MCA market — stable government-adjacent revenue.

Hampton Roads ship repair subcontractor: $55,000 advance at 1.32 factor rate = $72,600 total repayment ($17,600 cost). Estimated 7-month repayment. Equivalent APR: approximately 56%.

Virginia Beach restaurant group (peak season): $40,000 advance at 1.28 factor rate = $51,200 total repayment ($11,200 cost). Estimated 5-month repayment based on summer projections. Equivalent APR: approximately 67%. Off-season application: factor rate rises to 1.38, repayment slows to 9 months — APR falls to 47%, but total cost rises.

Use the MCA calculator to run your own numbers before accepting any quote.

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The COJ Prohibition in Practice: What Virginia HB 1027 Actually Prevents

Understanding what Virginia’s COJ ban stops — and where it doesn’t reach — helps you evaluate any contract correctly.

What the ban covers: Any MCA contract for a transaction under $500,000 between a Virginia business and any provider (regardless of where the provider is incorporated or operating from) cannot include a confession-of-judgment clause. A COJ clause found in such a contract is void and unenforceable as a matter of Virginia law. The provider cannot obtain judgment against you without notice, a hearing, and conventional Virginia litigation.

The forum-selection protection: HB 1027’s requirement that disputes be heard in Virginia courts means that a provider cannot include a clause selecting Ohio, New Jersey, or Utah as the governing forum to route around the COJ ban. If a provider attempts this in a sub-$500,000 contract with a Virginia business, both the COJ clause and the non-Virginia forum selection are unenforceable.

Where the ban doesn’t reach: Advances above $500,000. If a provider offers a $600,000 MCA, HB 1027 does not apply — read every clause of that contract as if Virginia had no MCA law at all, including any COJ clause and any forum-selection clause selecting Utah or Ohio.

Practical contract review checklist for Virginia businesses:

1. Confirm the advance amount is under $500,000 — HB 1027 protections only attach below the threshold
2. Search the contract for “confession of judgment,” “cognovit,” “warrant of attorney to confess judgment,” and “consent to entry of judgment” — if any appear in a sub-$500K contract, the provision is illegal; document it and contact a Virginia business attorney
3. Read the governing-law clause — the contract must select Virginia as the governing jurisdiction under HB 1027
4. Verify the provider’s SCC registration — search the Virginia SCC eForms portal for the provider’s name; unregistered providers are violating HB 1027 and may be operating illegally in Virginia
5. Cross-check the total repayment figure against the stated factor rate: total repayment ÷ advance = factor rate; any discrepancy signals undisclosed fees

For a deeper explanation of how COJ clauses work across states, see our guide at /blog/confession-of-judgment-mca.

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Virginia Funding Alternatives: What to Compare Before Signing

Virginia SBDC (virginiasbdc.org) — 27 centers statewide, hosted by George Mason University’s Mason Enterprise Center in partnership with the SBA. Covers Northern Virginia, Richmond, Hampton Roads, the Shenandoah Valley, Roanoke, Charlottesville, and Southwest Virginia. No-cost, confidential advising; frequently the fastest path to identifying a cheaper capital source. The SBDC also helps prepare the documentation (financial statements, business plan) that makes bank and SBA applications succeed.

SBA Virginia District Office — 400 N. 8th St., Suite 1150, Richmond, VA 23219; 804-771-2400; richmond.va@sba.gov. Serves 92 Virginia counties and cities. Connects businesses to SBA 7(a) loans (current rates approximately 9.75–13.25% APR), SBA 504 loans for commercial real estate and major equipment purchases, and SBA microloans up to $50,000 for startups and very small businesses. Northern Virginia counties (Arlington, Fairfax, Loudoun, Alexandria, Falls Church) are served by the Washington Metropolitan Area District Office.

Invoice factoring for government contractors: Any Northern Virginia or Hampton Roads business with outstanding, confirmed federal contracts or purchase orders can access invoice factoring at 1–4% of face value (roughly 12–50% APR annualized, but typically repaid in days to weeks rather than months). This is structurally far cheaper than an MCA for the same bridge-financing purpose. Atlantic Union Bank, EagleBank, MainStreet Bankshares, and specialized government-receivables factors like Triumph Business Capital and altLINE all operate actively in Virginia.

Virginia Economic Development Partnership (vedp.org) — offers targeted grants, tax incentives, and economic development financing for manufacturers, exporters, and technology companies that may partially substitute for or reduce short-term capital needs.

Early MCA payoff: If you are already in an MCA, many providers offer prepayment discounts of 5–25% of the remaining balance — but Virginia’s disclosure requires the prepayment policy to be stated up front, so check it before assuming a discount exists. See How to Get Out of an MCA for how to evaluate an early payoff or refinance.

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Frequently Asked Questions

Does HB 1027 apply to online MCA providers based outside Virginia?

Yes. HB 1027 applies to any provider offering sales-based financing to a Virginia business, regardless of where the provider is incorporated or physically located. An MCA funder based in New York, Florida, or California offering a $300,000 advance to a Richmond restaurant must register with the Virginia SCC and comply with HB 1027’s disclosure and COJ requirements.

Is there a penalty if a provider violates HB 1027?

Yes. The Virginia State Corporation Commission can impose civil penalties on providers who fail to register, provide required disclosures, or include prohibited COJ clauses. Violations may also give Virginia businesses grounds to seek rescission or damages. If a provider presents you a contract with a COJ clause on a sub-$500K advance, consult a Virginia business attorney before signing anything.

Does the COJ ban apply to MCA renewals or refinances?

Yes — if the renewal or refinance transaction is a new sales-based financing agreement under $500,000, HB 1027 applies. Providers who structure rollovers as amendments to an existing contract rather than new agreements to avoid HB 1027’s requirements should be treated as a red flag.

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Virginia City MCA Guides

City	Guide
Richmond	Merchant Cash Advance in Richmond, VA

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