Texas regulates advances now
Until 2025, Texas had no law specific to merchant cash advances. That changed with House Bill 700, which added Chapter 398 to the Texas Finance Code. From 1 September 2025, any provider offering sales based financing under $1,000,000 to a Texas business must give a signed written disclosure showing the total financing amount, the amount actually disbursed, the total repayment, the payment schedule with an estimated monthly figure, every finance charge and fee, any collateral required, and what the broker is paid. If the new money pays off an old balance, the disclosure must show how much of it goes to the old funder's charges rather than to you.
Two further provisions matter to a Texas owner. Confession of judgment clauses are void and unenforceable in these contracts. And a funder may only debit your account by ACH once it holds a first priority interest in that account, which ends the practice of three funders drawing from the same balance. Providers and brokers must register with the Office of Consumer Credit Commissioner by the end of 2026.
The Texas market
Texas has more small businesses than any state except California and adds them faster than anywhere. Trucking out of Laredo, Houston and Dallas; construction and roofing across every growing suburb; oilfield services in the Permian and the Eagle Ford; restaurants and retail in cities adding a thousand people a week. Lenders of every kind compete for Texas files, and a Texas business with clean statements is in a buyer's market.
Three Texas specifics. There is no state income tax, so a business tax return shows federal figures only, which makes the bank statements carry more weight with lenders. Oilfield service companies have revenue that follows the rig count, and lenders who know the sector read a Permian file differently from a lender who does not; placing it with the right one is most of the work. And Texas homestead protections limit what a personal guarantee can reach, which some lenders price for.
Which structures fit which Texas trades
Trucking: factoring for the receivables, equipment loans for tractors and trailers, a small line for repairs. Construction and roofing: a line of credit sized to the largest job, equipment financing for anything with an engine, and a hard rule against daily debit advances on ninety day pay cycles. Oilfield services: lines of credit and equipment financing from lenders who understand the cycle, with factoring where the operators are investment grade. Restaurants and retail: equipment financing for the build out, a seasonal line, SBA for the second location.
What Texas lenders look at
Three months of statements, as everywhere. For trucking, the MC number, insurance and the equipment list. For construction, a list of current jobs and the generals you work for. For oilfield, which operators you serve and the terms they pay on. Texas lenders are used to large swings in deposits between months in seasonal and cyclical trades, and judge a file on the trend across the year rather than one weak month.
The plain recommendation for a Texas business
Insist on the Chapter 398 disclosure on any advance offer, read the disbursement line against the total financing line, and look for the broker compensation figure; if it is missing, the provider is not complying. Use the market: a Texas file with two years of history should be shown to a bank or SBA lender before it is shown to an advance funder. Let the equipment carry its own note. And for the cyclical trades, arrange the line of credit in the good quarter, not the bad one.