The bill, titled "Commercial Sales-Based Financing," introduces a new chapter to the Texas Finance Code, specifically Chapter 398, which establishes regulations for commercial sales-based financing transactions and the registration of brokers involved in such transactions. Key definitions are provided, including terms like "commercial sales-based financing," "provider," and "recipient." The bill mandates that providers disclose specific information to recipients when extending financing offers exceeding $500,000, including the total financing amount, disbursement amount, finance charges, and repayment terms. Additionally, it outlines exemptions for certain financial institutions and transactions, as well as the administration and enforcement responsibilities of the Texas Department of Banking.

Furthermore, the bill requires commercial sales-based financing brokers to register with the Texas Department of Banking before conducting business, with a registration fee established by the Finance Commission of Texas. It also imposes civil penalties for violations of the chapter, categorizing such violations as deceptive trade practices. The act is set to take effect on September 1, 2025, with provisions for existing brokers to register by January 1, 2026, and for the Finance Commission to adopt necessary rules by December 1, 2025.

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