House Bill No. [insert bill number] introduced by Representative McFarland aims to establish regulations surrounding revenue-based financing transactions in Louisiana. The bill enacts a new section, R.S. 9:3137.10, which defines a revenue-based financing transaction as an agreement where a commercial enterprise sells or agrees to forward a percentage of its sales, revenue, or income, with payment obligations that fluctuate based on sales volume. Additionally, it clarifies that such transactions do not constitute a loan for the use or forbearance of money.

The bill also stipulates that any amounts charged in these financing transactions, whether categorized as fees, discounts, or otherwise, will not be classified as interest. Consequently, there will be no requirement for the disclosure of interest rates, factor rates, or annual percentage rates associated with these transactions. This legislation seeks to provide clarity and regulatory framework for businesses engaging in revenue-based financing.