| Disclosure law | In effect (since February 28, 2025); transactions of $500,000 or less; applies to providers that consummate more than 5 commercial financing transactions with Missouri businesses in a calendar year |
|---|---|
| Covers factoring? | Yes, AR purchases included |
| APR in disclosure? | No, dollar figures |
| UCC filing office | Missouri Secretary of State, Uniform Commercial Code Division (Jefferson City) |
| State agencies pay | Generally 30 days after the later of delivery or receipt of a proper invoice; interest is owed if the bill is still unpaid after the 45th day |
| Late-pay interest (state) | Prime rate plus 3 percentage points, retroactive to the 30th day, on unpaid balances after day 45 (state agency purchases). Public construction: 1.5% per month on late payments to subs and suppliers. |
| Lien deadline (private) | Generally within 6 months after the claimant last furnished labor or materials |
| Public payment bond | Public works contracts estimated to exceed $50,000 |
Who uses invoice factoring in Missouri?
Missouri receivables come from a mix of manufacturing, defense, healthcare and agriculture. Boeing's St. Louis defense operations, the Ford Kansas City Assembly Plant in Claycomo and the GM plant in Wentzville pull in a deep tier of parts suppliers, machine shops and freight carriers. The Kansas City National Security Campus, Whiteman Air Force Base and Fort Leonard Wood buy from local contractors and service firms. Large hospital systems such as BJC HealthCare and Mercy, plus headquarters like Centene, Edward Jones and Emerson, create steady work for staffing, IT and facilities vendors. Two big river ports and the I-70 and I-44 corridors make trucking and warehousing a major factoring segment.
Automotive and aerospace suppliers commonly see 45 to 90 day terms from tier 1 buyers, and federal subcontractors wait on prime contractor billing cycles. Agriculture (corn, soybeans, cattle, hogs) and food processing bring seasonal swings around harvest. Construction subcontractors face retainage and the state's 6 month lien window, which is why many factor progress billings.
- Industries that factor most: Automotive and aerospace manufacturing, Trucking, logistics and warehousing, Healthcare services, Agriculture and food processing, Construction.
- Metro areas: Kansas City, St. Louis, Springfield, Columbia.
- Federal installations that buy from local firms: Whiteman Air Force Base, Fort Leonard Wood, Kansas City National Security Campus.
What does Missouri's commercial financing disclosure law require?
Missouri Commercial Financing Disclosure Law, passed as SB 1359 (2024) (RSMo 427.300), has been in effect since February 28, 2025. It requires covered providers to give a written cost disclosure before a business signs. Scope: transactions of $500,000 or less; applies to providers that consummate more than 5 commercial financing transactions with Missouri businesses in a calendar year.
It reaches accounts receivable purchase transactions, which includes invoice factoring.
It does not require an APR. Expect dollar figures instead: amount financed, amount disbursed, total cost and payment terms.
Registration: Commercial financing brokers must register with the Missouri Division of Finance ($100 initial fee, $50 annual renewal due January 31) and keep a $10,000 surety bond on file. Providers themselves do not register.
Exemptions: Depository institutions and their affiliates, Farm Credit lenders, real estate secured deals, leases, licensed money transmitters, providers with 5 or fewer Missouri deals a year, deals over $500,000, certain vehicle dealer and patient injury receivable deals, and (since 2025) premium finance agreements.
Enforcement: Enforced exclusively by the Missouri attorney general; no private right of action. Penalties are $500 per incident (capped at $20,000) and $1,000 per incident (capped at $50,000) after a prior AG notice. A violation does not void the financing contract.
Required disclosures are dollar figures (funds provided, funds disbursed, total of payments, total cost of financing, payment amounts and prepayment terms), not an APR. The statute says a provider's characterization of a receivables deal as a purchase is conclusive that it is not a loan.
Compare offers side by side in the proposal decoder, and see every state's law in our disclosure law tracker.
How do UCC filings work in Missouri?
Where UCC-1s are filed in Missouri: Missouri Secretary of State, Uniform Commercial Code Division (Jefferson City). Filing and searching run through the Secretary of State's Missouri Business Filings system; certified searches can be ordered online.
A factor will search that index on your exact legal name before it funds, and will file its own UCC-1 on your accounts receivable at closing. Anyone already claiming your receivables, such as a bank, an SBA lender or a merchant cash advance provider, must release, subordinate or sign an intercreditor agreement first. Search your own name first at the official Missouri UCC search; old filings from paid-off lenders are common and can take a week or more to terminate. More in UCC liens and intercreditor agreements.
How fast do government payers in Missouri pay?
Missouri state agency deadline (RSMo 34.055 (state agency purchases); RSMo 34.057 (public construction)): Generally 30 days after the later of delivery or receipt of a proper invoice; interest is owed if the bill is still unpaid after the 45th day. Late interest: Prime rate plus 3 percentage points, retroactive to the 30th day, on unpaid balances after day 45 (state agency purchases). Public construction: 1.5% per month on late payments to subs and suppliers. On public construction, the owner generally pays the contractor within 30 days and the contractor pays subs and suppliers within 15 days of receiving payment. Good faith withholding is excused.
Federal agencies follow the Prompt Payment Act: generally 30 days after a proper invoice, with interest at the Treasury rate (4.75% for July 1, 2026 to December 31, 2026) when they pay late. To factor federal invoices, the funder usually needs an assignment of claims acknowledged by the contracting officer, which adds a week or two to setup. See factoring for government contractors and the prompt payment interest calculator.
What do Missouri lien and prompt pay rules mean for construction factoring?
Funders that factor construction receivables check lien and bond rights before they advance on a pay application, because those rights are what get an unpaid sub paid. Described generally:
- Mechanics lien deadline (private work, RSMo 429.005 et seq.): Generally within 6 months after the claimant last furnished labor or materials. To enforce: Suit generally within 6 months after the lien is filed.
- Preliminary notice: Original contractors must give the owner a written Notice to Owner before receiving payment. Subcontractors and suppliers must send a Notice of Intent to Lien at least 10 days before filing. On owner-occupied residential projects of 4 units or less, subs and suppliers need the owner's signed consent.
- Private prompt pay (RSMo 431.180): owner to contractor: per the contract's payment schedule; the statute sets no fixed number of days; contractor to sub: per the contract's payment schedule; the statute sets no fixed number of days; late interest: court may award up to 1.5% per month from the date payment was due, plus attorney fees to the prevailing party.
- Public projects (RSMo 107.170): you cannot lien public property, so payment bonds take its place. Bond required: Public works contracts estimated to exceed $50,000. Claim notice: Remote suppliers must give the contractor written notice of nonpayment within 90 days of their last delivery; other claimants follow the bond's terms.
- Read every lien waiver before you sign it, and ask counsel how a waiver signed before payment affects your rights. More in factoring for construction subcontractors.
What else should a Missouri business know?
- Commercial financing brokers who arrange factoring for Missouri businesses for a fee must be registered with the Division of Finance and bonded before acting as a broker.
Questions people ask
Is invoice factoring legal in Missouri?
Yes. Missouri law treats a sale of receivables at a discount as an accounts receivable purchase transaction, and RSMo 427.300 says a provider's characterization of the deal as a purchase is conclusive that it is not a loan. Factoring is regulated mainly through the state's disclosure law, which applies to deals of $500,000 or less from providers doing more than 5 Missouri deals a year. Banks and their affiliates are exempt.
Does Missouri require a disclosure for factoring deals?
Yes, for most deals of $500,000 or less. Under RSMo 427.300, the provider must disclose the total funds provided, funds disbursed, total of payments, total dollar cost of financing, payment amounts and prepayment terms at or before signing. An APR is not required. The attorney general enforces the law, and there is no private right of action.
Where do I search for UCC liens in Missouri?
Search the Missouri Secretary of State's UCC Division records through the Missouri Business Filings system at bsd.sos.mo.gov. Search by your exact legal business name to see whether a lender or factor already has a filing against your receivables. Certified searches can also be ordered online, which many factors ask for before funding.
How fast do Missouri state agencies pay vendors?
Under RSMo 34.055, a state agency that has not paid within 45 days of the later of delivery or invoice approval owes interest back to day 30, at 3 points above the prime rate. In practice, vendors to state agencies and public construction projects often plan for 30 to 60 days, which is why government contractors in Missouri use factoring to cover payroll in the gap.
How fast can a Missouri business get funded by factoring?
With a clean file (current AR aging, invoices, a clear UCC search and creditworthy customers), first funding commonly takes about one to three weeks, and later invoices usually fund within a day or two of verification. Federal receivables take longer because of the assignment of claims.
Sources
- Revisor of Missouri, RSMo 427.300 (Commercial Financing Disclosure Law)
- Husch Blackwell, Missouri enacts new commercial finance disclosure law
- Missouri Secretary of State, Uniform Commercial Code
- Revisor of Missouri, RSMo 34.055 (state agency payment)
- Revisor of Missouri, RSMo 431.180 (private construction payment)
- Revisor of Missouri, RSMo 107.170 (public works bonds)
- Levelset, Missouri mechanics lien FAQs
- Levelset, Missouri prompt payment FAQs
- Levelset, Missouri bond claim FAQs
General information, not legal advice. Statutes and deadlines change and have exceptions; check the source or ask counsel before relying on one. Spot an error? Tell us and we will fix it.