Connecticut gives you three days: the state's commercial financing disclosure and registration rules

Connecticut did something no other state disclosure law does. A specific offer of sales-based financing made on or after 1 July 2024 cannot be revoked, withdrawn or modified until midnight of the third calendar day after the date of the offer. That is a statutory pause built into the sales process, and it is the single most useful thing in the Connecticut regime.

The three-day window

The requirement sits in Conn. Gen. Stat. § 36a-869. Its practical effect is that the standard closing technique — this rate is good until end of day, we need the signed contract now — does not work on a covered Connecticut offer. The offer has to still be there on day three.

Use it. Three days is enough to get a second quote, to run the numbers against your own deposit history, and to have someone who is not selling to you read the contract. If a funder tells you the offer expires tonight, ask them to reconcile that with § 36a-869.

No waiver of prejudgment remedy rights

Section 36a-868 prohibits a commercial financing contract entered into on or after 1 July 2024 from containing a provision waiving a recipient's right to notice, a judicial hearing or a prior court order under chapter 903a — Connecticut's prejudgment remedy statute.

Prejudgment remedy is the mechanism by which a creditor freezes or attaches your assets before a case is decided. A waiver of the notice and hearing that normally precede it is a serious thing to sign. Connecticut removed the option.

The disclosure

Section 36a-863 carries the disclosure duty. The Banking Commissioner prescribes the format, and the mandated form requires the total financing amount, the disbursement amount, the finance charges, the total repayment amount, the payment schedule, fees, a description of collateral, broker compensation and the prepayment terms. Disclosure is given when the provider extends a specific offer.

Broker compensation on the face of the form is a feature Connecticut shares with Virginia and few others. If a fee is being paid to whoever brought you the deal, it should be on the sheet.

Registration

Providers and brokers register with the Banking Commissioner under Conn. Gen. Stat. § 36a-870. The deadline set in the statute was 1 October 2024, and registration runs through the Nationwide Multistate Licensing System with company and control-person filings plus a jurisdiction-specific submission to the Department. The Department of Banking's registration page explains the process and links the register.

The Department publishes a list of registered commercial financing providers and brokers. Checking it takes a minute and is one of the few independent facts you can establish about a funder before you commit.

Enforcement, and one wrinkle worth knowing

The Department of Banking enforces the requirements. When the rules first landed, it took a no-action position on disclosure violations between 1 July and 30 September 2024 while the industry caught up — but that relief expressly did not extend to the three-day review requirement or the prejudgment remedy waiver prohibition, which were enforceable from the start. The Department's commercial financing guidance sets out that sequence.

The lesson generalises: transitional enforcement discretion is not the same as the rule not applying, and it expires.

A short checklist for a Connecticut offer

1. Note the date on the offer. Count three calendar days. That is your working window.
2. Confirm the provider — and any broker — appears on the Department of Banking's register.
3. Find broker compensation on the form and ask what it bought you.
4. Search the contract for any waiver of notice, hearing or court order before attachment. It should not be there.
5. Compare the total repayment and the disbursement amount, and get the expected duration in writing.

What Connecticut does not do

There is no rate cap here. Registration is a filing, not an approval, and the Commissioner does not review individual pricing. The disclosure tells you the price; deciding whether the price is worth paying is still your job.

Counting the three days

Calendar days, not business days. Illustrative only — a specific offer dated Tuesday cannot be revoked, withdrawn or modified until midnight on Friday, because Wednesday, Thursday and Friday are the three calendar days after the date of the offer. An offer dated Thursday runs through midnight Sunday, and the weekend does most of the work.

So the useful move is to ask for the offer in writing, dated, early in the week. You get three days either way, but three weekday days are worth considerably more than a day and a weekend if you intend to get a second quote inside the window.

What to do with the seventy-two hours

Run the cost against the money you actually receive, which is not the number the factor is quoted on.

Illustrative only — $75,000 of financing at a 1.33 factor is $99,750 of total repayment. A 3% origination fee taken at funding means $72,750 reaches your account. The cost is therefore $27,000 on $72,750 received, which is 37.1 cents per dollar in hand, and the effective multiple on the cash you can actually spend is 1.371 rather than 1.33.

Then ask for the expected duration in writing and divide. The same $27,000 over seven months and over sixteen months are different prices for the same product, and the disclosure form gives you the payment schedule you need to work out which one is in front of you.

Use the rest of the window for the two things that are hard to do under pressure: get a second written quote you can compare on the same basis, and have someone who is not being paid on the deal read the default and remedies sections.

Statutory citations, deadlines and forms in this area move. Confirm the current position with the Connecticut Department of Banking before relying on anything above.

This is general information and not legal advice for your situation.