STATE COMMERCIAL FINANCING LAW
North Dakota Commercial Financing Law
HB 1127 (2025) · N.D. Cent. Code ch. 13-04.1 (Money Brokers Act)
At a glance
Status: Law enacted
Signed: Apr 11, 2025
Effective: Aug 1, 2025
Who it covers: Alternative financing products (MCA, RBF, factoring) as designated by the DFI
Size cap: 36% annual rate cap under the MBA
Regulator: ND Dept. of Financial Institutions (DFI)
Type of rules: Licensing / rate cap · Broad coverage
Key requirements
A different kind of law: instead of requiring disclosures, HB 1127 defines "loan" under the Money Brokers Act to include any "alternative financing product" the DFI identifies by order.
Products designated as loans face the full MBA regime — money broker licensing, a 36% annual rate cap, and TILA-style disclosures.
As of October 2026, the DFI has not publicly issued an order designating MCA, revenue-based financing, or factoring — but legal analysts warn the new "loan" definition is broad enough that a court could apply it even without a DFI order.
The first state to target the legal classification of alternative financing itself rather than mandating transparency around it.
What to watch
Highest-stakes watch item in the country: if the DFI designates MCA/RBF as loans, the 36% cap would effectively reshape or end those products in North Dakota.
North Dakota coverage from Funder Intel
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Last verified October 2026. Compiled and verified by Funder Intel for general industry information. This is not legal advice. Laws change often, so check the statute and a qualified attorney before making compliance decisions.