- 1Writer David Roitblat argues HB 700 would price many providers out of Texas.
- 2The bill requires registration by December 31, 2026, disclosures under $1M and a first-priority rule for auto-debits.
- 3Penalties are $10,000 per violation, and the law reaches providers serving Texas recipients online.
This is a summary of a guest opinion column by David Roitblat, founder and CEO of New York accounting firm Better Accounting Solutions, which specializes in accounting for merchant cash advance companies. The views are his.
Roitblat wrote while Governor Greg Abbott was weighing House Bill 700. Abbott had until June 22 to decide. If he signed it or let the deadline pass, the law would take effect on September 1, 2025. Roitblat argues the bill would cut off funding for thousands of Texas entrepreneurs and is a direct assault on the MCA industry.
The argument for access
His case starts with bank lending. Traditional lenders have tightened standards, he writes, especially for newer businesses, minority-owned firms and companies in industries seen as risky, and owners who need money quickly, such as for a broken freezer or contractor materials, cannot wait weeks for approval. Revenue-based financing, he says, is available when banks say no, even if it costs more, and that capital supports hiring and local growth.
What the bill would require
Roitblat says HB 700 goes well beyond disclosure. As he describes it:
- Providers and brokers must register with the Office of Consumer Credit Commissioner by December 31, 2026, with annual renewals and fees.
- For financing under $1 million, providers must make extensive disclosures covering financing amounts, disbursement, payment schedules, fees, prepayment penalties and broker compensation, and obtain the recipient's signature before finalizing.
- Confession of judgment clauses are voided.
- Automatic debiting is prohibited unless the provider holds a validly perfected first-priority security interest, a standard he calls nearly impossible to meet.
- The Finance Commission of Texas gains authority to prohibit "unfair, deceptive, or abusive" practices, though it cannot set maximum rates or fees.
- Violations carry civil penalties of $10,000 each, and the law applies to any provider serving Texas recipients over the internet regardless of location.
His conclusion
Roitblat argues that daily-sales-based payment is what makes revenue-based financing work, and that removing it would leave the model unworkable. He predicts rural businesses, minority-owned enterprises and startups would be hit hardest, and says small business owners' voices have been largely absent from the debate.
He urges the governor to protect businesses from predatory practices without restricting access, and calls for narrower policy instead of broad rules. A related call to action for merchants circulated before the deadline.
Source reporting: deBanked.
