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MCA Laws in Kansas: What Business Owners Need to Know

MCA Laws in Kansas: What Business Owners Need to Know

Bar Alezrah
9 min read
April 3, 2026
Reviewed for accuracy. Based on real experience.

Kansas does not have any laws that specifically regulate merchant cash advances. The Kansas Office of the State Bank Commissioner (OSBC) oversees banks, trust companies, and licensed lenders, but MCAs fall outside its regulatory authority because they are structured as purchases of future receivables rather than loans.

This guide walks through what Kansas law does and does not cover for MCA transactions and how Kansas business owners can protect themselves.

Current MCA Regulations in Kansas

Kansas has no statutes or regulations that specifically address merchant cash advances. The Office of the State Bank Commissioner licenses and supervises traditional lenders under the Kansas Uniform Consumer Credit Code (UCCC), but MCA companies are not considered lenders under Kansas law and are not required to obtain a license.

This means MCA companies operating in Kansas face no state requirement to disclose an APR, total cost of financing, or repayment terms in a standardized format. The contract between the MCA provider and the business owner is the primary document governing the transaction, and Kansas law provides very little oversight of its terms.

Kansas Uniform Consumer Credit Code

The Kansas UCCC (K.S.A. 16a) regulates consumer credit transactions and sets rate caps for consumer loans. The UCCC defines maximum charges for different types of consumer credit. However, because MCAs are commercial transactions and not consumer loans, the UCCC does not apply, and its rate caps do not limit the cost of an MCA.

Confession of Judgment Rules

Kansas law addresses confessions of judgment under K.S.A. 60-212. Kansas courts have historically been cautious about COJs and require that they meet certain procedural standards to be enforceable.

Key points for Kansas business owners:

  • Kansas courts will examine whether a COJ clause was entered into voluntarily and with full understanding of its implications
  • If you signed an MCA agreement containing a COJ clause and a judgment is entered against you, you may have the right to challenge that judgment in Kansas courts
  • COJ judgments obtained in other states (such as New York) must go through Kansas's domestication procedures under the Uniform Enforcement of Foreign Judgments Act before they can be enforced against Kansas assets
  • The domestication process provides an opportunity to raise defenses, including challenging the validity of the COJ itself

UCC Filing Rules

MCA companies file UCC-1 financing statements with the Kansas Secretary of State to establish a lien on your future business receivables. These public filings affect your credit profile and your ability to obtain other financing.

What you need to know about UCC filings in Kansas:

  • You can search for UCC filings against your business through the Kansas Secretary of State website
  • UCC filings in Kansas are effective for five years from the date of filing
  • After you pay off an MCA, the funder must file a UCC-3 termination statement within 20 days of receiving your written request
  • If the funder fails to file the termination, you may pursue remedies under Kansas's adoption of UCC Article 9 (K.S.A. Chapter 84, Article 9)

Consumer Protection Laws That Apply

Kansas has general consumer protection statutes that may provide recourse if an MCA company engages in deceptive practices.

Kansas Consumer Protection Act

The Kansas Consumer Protection Act (K.S.A. 50-623 et seq.) prohibits deceptive and unconscionable acts and practices in consumer transactions. While the KCPA is designed for consumer transactions, Kansas courts have considered its application in business contexts where the practices involved are particularly egregious.

If an MCA company made materially false statements about the cost, terms, or nature of your advance, you may have a claim under the KCPA. The Kansas Attorney General's office enforces this statute.

Attorney General's Role

The Kansas Attorney General's Consumer Protection Division investigates complaints about fraudulent and deceptive business practices. Filing a complaint with the Kansas Attorney General creates a record that can support enforcement actions and may prompt an investigation if the AG's office receives multiple complaints about the same MCA provider.

Recent Legislation and Court Cases

Kansas has not enacted any MCA-specific legislation as of early 2026, and the state legislature has not introduced bills targeting MCA providers.

  • No pending MCA bills. The Kansas legislature has not taken up MCA-specific disclosure or licensing legislation in recent sessions.
  • Limited case law. Kansas courts have not published significant decisions addressing whether MCAs should be reclassified as loans or subjected to usury limits.
  • Regional context. Neighboring states like Missouri and Colorado have not enacted comprehensive MCA regulations either, though the national trend is moving toward greater transparency requirements.
  • Federal developments. Any future federal MCA transparency legislation would apply to Kansas businesses, but no such bill has been enacted.

What Kansas Business Owners Should Do

Without state-level MCA protections, Kansas business owners should take these practical steps:

  1. Calculate the real cost. MCA companies in Kansas are not required to disclose an APR. Ask a financial advisor or use online tools to convert the factor rate and repayment schedule into an annualized percentage so you can compare it to bank loans and SBA products.
  2. Watch for COJ clauses. Read the entire MCA agreement and look for confession of judgment language. If you find it, ask the MCA company to remove it. If they refuse, think carefully before proceeding.
  3. Check your UCC filings. Search the Kansas Secretary of State website for existing liens on your business. Multiple MCA liens make it nearly impossible to qualify for traditional bank financing.
  4. Have an attorney review the contract. A Kansas business attorney can flag problematic terms including choice-of-law clauses that may subject you to another state's legal framework.
  5. Explore other options first. Contact the Kansas Small Business Development Center for free help identifying SBA loans, microloans, or community development financial institution (CDFI) loans that may be far less expensive.

Helpful Resources

Frequently Asked Questions

Does Kansas have MCA disclosure requirements?

No. Kansas does not require MCA companies to provide standardized disclosures about APR, total cost, or payment terms. Unlike states such as California and New York, Kansas has no MCA-specific transparency laws. Business owners must calculate the true cost on their own.

Can an MCA company use a confession of judgment against my Kansas business?

Kansas courts require that confessions of judgment meet certain procedural standards. If a COJ was not entered into voluntarily and with full understanding, you may be able to challenge it. Additionally, COJ judgments from other states must go through Kansas's domestication process before they can be enforced here.

Do MCA companies need a license in Kansas?

No. MCA companies are not required to obtain a license from the Kansas Office of the State Bank Commissioner. Because MCAs are structured as commercial purchases of receivables rather than loans, they fall outside Kansas's lending regulations.

Where can Kansas business owners get help with MCA issues?

File a complaint with the Kansas Attorney General's Consumer Protection Division at ag.ks.gov. For free business counseling and alternative financing guidance, contact the Kansas Small Business Development Center. For legal disputes, consult a Kansas attorney with experience in commercial finance.

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