In one paragraph
California requires commercial financing providers to disclose an APR and total cost on offers, which makes California term sheets easier to compare than most. Confessions of judgment are generally unenforceable in California courts, but because your contract almost certainly selects New York law, funders sue there instead and then domesticate the judgment in California. Personal guarantees remain fully enforceable.
Disclosure
California’s commercial financing disclosure rules, in force since late 2022, require an APR, total dollar cost, term and payment details on offers under the size threshold, including sales-based financing such as MCAs. A California owner who received no APR has a documented compliance issue.
Confessions of judgment
California courts have long refused to enforce cognovit or confession-of-judgment clauses in most commercial settings. That protection is real but narrow: it stops a funder from using California courts for a COJ. It does not stop the funder from obtaining a New York judgment under the contract’s venue clause.
Enforcement
A New York judgment is registered in California under the Sister State Money Judgments Act, after which a levy on California accounts proceeds under California procedure. Expect two to six weeks between the New York judgment and a local levy, which is your window to negotiate or move to vacate in New York.
Personal guarantees and liens
California enforces commercial guarantees. Homestead protection is meaningful but capped; do not assume your residence is safe. UCC-1 filings against California businesses are routine and searchable through the Secretary of State.
What to do first in California
Check whether your term sheet showed an APR. If not, keep it: it is leverage. Then search the New York court e-filing system for your business name to see whether anything has already been filed.
General legal information as of September 2026, not legal advice, and no attorney-client relationship is created. Statutes and case law change; confirm with a California-licensed attorney before acting. Zogby shares ownership with Delancey Street, a debt relief company it rates.