Section 202 – Disclosures for commercial financing transactions.

• (1)
  • (a) Before consummating a commercial financing transaction, a provider shall disclose the terms of the commercial financing transaction in accordance with this section and rules made by the commissioner.
  • (b) In addition to the requirements of Subsection (1)(a), for a commercial open-end credit plan, the provider shall make the disclosures described in this section:
    • (i) after any disbursement of funds that occurs after the parties consummate the commercial financing transaction; and
    • (ii) no later than 15 days after the last day of the calendar month in which the disbursement of funds occurs.

• (2) A provider shall disclose the following information in connection with each commercial financing transaction:
  • (a) the total amount of funds provided to the business under the terms of the commercial financing transaction;
  • (b) the total amount of funds disbursed to the business under the terms of the commercial financing transaction, if less than the amount described in Subsection (2)(a);
  • (c) the total amount to be paid to the provider under the terms of the commercial financing transaction;
  • (d) the total dollar cost of the commercial financing transaction, calculated by finding the difference between:
    • (i) the amount described in Subsection (2)(a); and
    • (ii) the amount described in Subsection (2)(c);
  • (e)
    • (i) the manner, frequency, and amount of each payment; or
    • (ii) if the amount of each payment may vary, the manner, frequency, and estimated amount of the initial payment;
  • (f) a statement of whether there are any costs or discounts associated with prepayment under the commercial financing transaction, including a reference to the paragraph in the commercial financing transaction agreement that creates each cost or discount; and
  • (g) any amount of the funds described in Subsection (2)(a) that the provider pays to a broker in connection with the commercial financing transaction.

• (3) The commercial financing transaction agreement shall include a description of the methodology for calculating any variable payment amount and the circumstances that may cause a payment amount to vary.

• (4) The provisions of this section apply to a commercial financing transaction consummated on or after January 1, 2023.

Enacted by Chapter 449, 2022 General Session