California Commercial Financing Law: Key 2028 Dates

What California enacted in September

California approved AB 2116 on September 30, 2026, as Chapter 823. It expands the California Financing Law’s framework for covered commercial-financing providers and brokers. The chaptered text includes factoring, asset-based lending, commercial loans, open-end credit, and lease financing, with a $500,000 offer threshold in its recipient definition and additional definitions and exemptions. [1]

This is enacted legislation, not a pending proposal. It is also a California development, not a nationwide licensing rule. The signing occurred last month; this article explains that development rather than announcing a new action today.

Keep January and July 2028 separate

The new commercial-financing chapter becomes operative January 1, 2028. The separate licensing provision becomes operative July 1, 2028, with a pathway for applicants that submit a complete application on or before that date and await a decision. [1] Those dates address different provisions; neither means all new requirements started in September 2026.

For a particular transaction, ask a qualified adviser which provisions, exemptions, and dates apply. Do not assume these future requirements cancel an existing obligation or change the written terms of an offer you are considering today.

Our perspective: Identify everyone in the transaction

GoodToGo Capital’s practical recommendation is to establish who is doing what before sending an application. Ask for the legal name of the company presenting the offer, the company providing the funds, and the company that will service collections. Record the contact responsible for questions after funding, rather than relying only on the salesperson’s name.

Ask whether you are dealing with a provider, a broker, or another referral source. Request an explanation of any fee your business will pay and when it becomes due. If someone makes a licensing claim, ask which license and legal entity they mean and verify the claim through the relevant regulator’s official records. These are due-diligence questions, not a conclusion that a particular company needs a particular license.

Compare the offer itself, not just a regulatory label

A claim of compliance does not replace a review of the economics. Request the cash your business would actually receive, total contractual payments or purchased amount, all fees, collection frequency, and any collateral or personal guarantee. Ask the provider to explain unfamiliar figures in dollars using the same funding amount and assumptions across competing offers.

Keep product-specific questions separate. With invoice factoring, ask who handles customer payments and what happens to disputed invoices. With equipment financing, ask who owns the equipment and what is due at the end. With sales-based funding, ask how collections are determined and what process applies when sales change. Request written explanations before deciding.

Keep a dated decision file

Save the offer, disclosures, agreement, fee explanation, and relevant correspondence together. Record which version you reviewed and when. If a later document changes an amount, obligation, or company name, ask for the difference to be explained before signing. Retain copies you can access independently of a temporary application link.

Treat implementation details as something to recheck as 2028 approaches. This overview is educational and does not decide coverage or legal rights for your business. GoodToGo Capital can help you explore funding options and prepare questions about an offer; availability, pricing, and terms depend on provider review and the written agreement.

Sources

General educational information. Consider your business’s circumstances and the written terms of any offer.