Best business debt settlement companies in Texas2026 rankings, scored against the new Chapter 398

Getting out of a merchant cash advance in Texas: what Chapter 398 changed, what you were owed in writing, and what it settles for

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For years the advice written for Texas business owners was borrowed from New York, and it did not travel. There is no criminal usury rate here for a business advance. There is no forfeiture remedy. The argument that anchors MCA defense in Manhattan does almost nothing in Amarillo. Owners who called firms working from that script got a lot of confident language and very little movement on the number.

That changed on September 1, 2025. Finance Code Chapter 398, enacted by H.B. 700, is now the statute that describes your contract, and it did three things that matter to anyone trying to get out of one. It took away the label the industry relied on. It killed the confession of judgment. And it put conditions on the daily debit itself. Texas advances settle near 52 cents on the dollar, and the paperwork that produces that number is different now than it was two years ago.

What Chapter 398 changed for Texas business owners

Start with the label, because for two decades the label decided everything.

Finance Code § 306.103(b) said that the parties’ characterization of an account purchase transaction as a purchase is conclusive that the transaction is not one for the use, forbearance or detention of money. Written as a purchase of receivables, it was a purchase. Full stop. That single subsection is why usury arguments against Texas advances went nowhere.

Section 398.004 now says a sales-based financing transaction is not a form of account purchase transaction for purposes of § 306.103, regardless of the principal amount of the advance. The label stops being conclusive. What the deal actually is becomes a question again.

Section 398.055 makes a commercial sales-based financing contract containing a confession of judgment provision, or any similar provision, void and unenforceable. Section 398.056 bars a provider or broker from establishing an automatic debit mechanism unless it holds a validly perfected first priority security interest in that deposit account.

H.B. 700 took effect September 1, 2025 and contains no savings clause for advances already outstanding. Whether these sections reach an older contract is unresolved, and no opened decision answers it.

The written disclosure Texas now requires, and what to check for

If your advance was funded on or after September 1, 2025 and the offer was under $1 million, you were owed a piece of paper. Pull it out and see whether you got it.

Sections 398.051 and 398.052 require an itemized written disclosure on a specific offer, including the finance charge, the total repayment amount, prepayment charges and broker compensation, and they require your signature on those disclosures before the application is finalized.

Broker compensation is the line most owners have never seen. The broker who called you the week your first draw appeared in a data feed was paid, and the amount was supposed to be on the page you signed. If that number is absent from your file, that is a fact worth writing down.

This is not a lawsuit waiting to happen. Chapter 398 creates no private right of action, and § 398.102 sets a $10,000 civil penalty per violation enforced by the state. What a missing disclosure gives you is a question the funder has to answer to a regulator instead of to you, at a moment when it would rather be closing your file.

Is the funder registered with the OCCC?

Chapter 398 put this product under a regulator for the first time. The Office of Consumer Credit Commissioner is it.

Section 398.053 requires providers and brokers to register. Under H.B. 700, a person already in business must register not later than December 31, 2026, and initial rules and registration fees were due by September 1, 2026. The OCCC has said registration applications open through NMLS beginning September 1, 2026, and it identifies commercial sales-based financing as the product also known as a merchant cash advance.

The OCCC publishes its enforcement actions, closed FY 2022 through FY 2026 and current through July 31, 2026. Reviewed on August 25, 2026, no action under Chapter 398 or against a sales-based financing provider appears on that list.

Read that honestly. The regime is new, the registration window is still open, and the enforcement record is empty so far. Anyone telling you that the OCCC is about to solve your problem is guessing. Anyone telling you the statute is meaningless has not read § 398.055.

Why the interest rate argument is not your lever in Texas

The legislature declined to price this product. Section 398.005(d) provides that the Finance Commission may not adopt a maximum annual percentage rate, finance charge or fee for these transactions. Disclosure, yes. A ceiling, no.

Ordinary usury is a discount here, not a kill shot. The ceiling on business, commercial and investment credit is 28 percent a year under § 303.009(c), and with no agreed ceiling it falls to 10 percent under § 302.001(b) and article XVI, section 11 of the Texas Constitution. Interest is spread across the stated term under § 306.004 before anyone compares it to that ceiling.

Break the ceiling and the funder owes three times the excess interest under § 305.001(a-1), plus your attorney’s fees under § 305.005. It does not owe you the principal: § 305.002(b) confines the forfeit-everything remedy to consumer transactions, and § 305.007 says the Chapter 305 penalties are the only ones. There is no criminal usury rate for a business advance at all, because § 305.008 reaches only personal, family or household transactions.

So the number on the contract is not the argument. The mechanism is.

What 52 cents means across five different Texas economies

The statewide average settlement is 52 cents on the dollar and the average advance is $23,000, but Texas is not one market and those figures hide the spread.

Permian Basin service companies take large advances against a commodity cycle and default in cohorts when the cycle turns. Dallas and Fort Worth run on freight, staffing and wholesale, where a single customer going 90 days creates the gap the advance was taken to bridge. Houston concentrates energy, medicine and port logistics. San Antonio stacks, at an average advance of $34,000. The Rio Grande Valley runs thinner tickets and faster cycles.

Five months is the statewide average road to settlement. A single advance handled by an attorney-led firm closes in 2 to 8 weeks. A stack of three to five runs 3 to 12 months. When a firm quotes you one number for both, it has told you it treats your file as an enrollment balance rather than as a set of contracts.

The funding date matters more than the region. Sort every advance you hold into before and after September 1, 2025.

How to choose a settlement firm in Texas

Ask four questions, and listen for what is missing rather than for what sounds confident.

First: what is your fee charged on, enrolled debt or the settled amount, and is anything due before a settlement closes. Second: does the firm ask for the funding date on each advance before quoting anything. Third: what does it say about the confession of judgment clause in your contract. Fourth: what happens if it concludes settlement is the wrong answer for you.

That fourth question is the one that sorts the field. Settlement assumes a business worth saving. If revenue has stopped, if guarantee exposure exceeds what the business could ever produce, or if a judgment has already been enforced against your accounts, the honest conversation is about restructuring, bankruptcy or an orderly wind-down. Forgiven debt can also be taxable, so any settlement gets reviewed with your accountant.

None of the three firms on this page is a law firm. Delancey Street is attorney-founded and commercial only. The other two are consumer settlement operations with no attorneys at all.