The General Assembly Raised Bill No. 5211 seeks to amend existing laws on commercial financing by redefining key terms and updating disclosure requirements. A significant change is the removal of the previous cap of $250,000 on sales-based financing, which expands the potential for such transactions. The bill introduces new definitions, including "sales-based financing," defined as transactions repaid as a percentage of sales or revenue, and "specific offer," which details the binding terms of financing based on recipient information. It also clarifies the roles of various parties involved in commercial financing, such as providers and brokers, while exempting certain entities like banks and credit unions from these regulations.

Additionally, the bill mandates that providers disclose critical information to recipients when extending a specific offer for sales-based financing, including the total financing amount, disbursement amount, finance charge, and a newly required estimated annual percentage rate (APR). The APR must be calculated based on projected sales or revenue, using either a historical or opt-in method, with providers required to notify the Banking Commissioner of the chosen method. Effective October 1, 2026, the bill also prohibits certain contract provisions that waive recipients' rights to notice or judicial hearings and mandates a cancellation option within seven business days of contract execution. These changes aim to enhance transparency and consumer protection in commercial financing transactions.

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