Connecticut moves APR disclosure bill forward to the Senate

If you're a sales-based financing provider, or you fund businesses that use these products, Connecticut just moved closer to a regulatory change that could directly affect how you operate and disclose in that state.

Last week, HB 5211 passed the Connecticut House and is now headed to the Senate. If it clears that chamber by May 6, 2026, it goes to the Governor's desk for signature.

What the Bill Does

HB 5211 defines "commercial financing" as any extension of sales-based financing by a provider, and it has two main provisions:

1. Mandatory APR disclosure for commercial financing. The bill would require providers to disclose an annual percentage rate, a metric the industry has long argued is a poor fit for a product whose repayment fluctuates with a business's actual sales. Applying a traditional APR framework to sales-based financing is like measuring a variable product with a fixed ruler. The number it produces can mislead rather than inform.

2. A ban on prejudgment remedies (PJRs). This provision prohibits lenders from seizing assets before a court has ruled in their favor. Many support this position, including the Revenue Based Finance Coalition (RBFC) as part of its own best practices, so this piece of the bill is not the point of contention.

The fight is squarely over the APR disclosure requirement.

Where the Industry Stands

The RBFC has been clear: it does not support mandatory APR disclosure for sales-based commercial financing products. The coalition's position is that APR, a construct built for traditional fixed-term loans, doesn't translate meaningfully to a product where repayment is tied directly to a business's revenue and cash flow, not a fixed schedule. Mandating it doesn't create transparency. It creates confusion.

Why This Matters and What You Can Do

The clock is short. If the Senate passes HB 5211 by May 6, the bill heads to the governors desk to become law. If you have businesses operating in Connecticut, or customers who do, this is the moment to engage.

The RBFC is actively looking to connect Connecticut businesses with state legislators to urge a vote against the bill in its current form. If you have Connecticut-based business relationships that could speak to legislators directly, reach out to the RBFC team as soon as possible.

This is how these battles are won or lost, not in the final vote, but in the conversations that happen before it.