Connecticut Legislation

As of Tuesday, October 1, 2024 the state of Connecticut requires commercial financing providers to deliver a “Commercial (Sales-Based) Financing Disclosure Form” to small businesses in their state before entering into a revenue-based financing transaction. Because Forward Financing provides this type of product, we must follow this law and have each Connecticut-based customer sign a disclosure form.

Forward Financing is required to obtain a signed disclosure form from customers with a business address in the state of Connecticut. While Forward takes great care to ensure our contract is clear and comprehensive, Connecticut is requiring a separate form for all “sales-based” financing.

• Every small business in Connecticut will receive the disclosure form at the same time they receive their contract (since this is when they’ll first receive an offer that binds Forward). It must be signed by the same party that sign the contract.
• In most cases, whether working with an ISO or directly with Forward, the customer will receive two separate emails simultaneously – one with the disclosure form to e-sign and one with the contract to e-sign.
• If the ISO elects to send the disclosure form and contract for the customer to manually sign, the ISO must obtain signatures from the customer on both documents, and send them to Forward.

Disclosure Requirement

• For any customer in Connecticut, ISOs are now required by state law to obtain the customer’s signature on the separate Connecticut disclosure form – in addition to Forward’s standard customer contract – before funds can be disbursed.
• ISOs should be aware that the Connecticut disclosure form:
  • Cannot be altered and is consistent for all “sales-based” financing in the state of Connecticut;
  • Must be signed by the same party or parties that sign the funding contract;
  • Will be treated like any other stipulation;
  • Cannot be merged with any other document; it must be its own PDF.

Registration Requirement

• The state of Connecticut will require ISOs to be registered as “sales-based financing brokers” to refer Connecticut-based customers for sales-based financing. Learn more at the NMLS website.
• Accordingly, ISOs must provide their Forward Account Manager proof of registration for us to review their CT-based applications submitted after October 1, 2024.

ISOs are encouraged to contact their Account Manager with any questions regarding Forward’s change in processes related to this Connecticut legislation. Further information on the new law can be found here.

Customers working with an ISO and funding with Forward for the first time are encouraged to contact their ISO with questions on any documentation requirements, including this disclosure form. Customers who are working directly with Forward Financing are welcome, as always, to reach out to their Account Executive with any questions or concerns.

While none of us know for sure what legislation will or will not be passed, we can share our steadfast commitment to delivering financial opportunity to small businesses and being transparent and ethical in doing so.

We are involved in these discussions and closely monitoring any legislation that could affect our customers and ISOs. We will keep ISOs informed as decisions are made and will help them navigate any changes to how they work with Forward and the customers we share.