H.B. No. 700 introduces new regulations for commercial sales-based financing transactions in Texas by adding Chapter 398 to the Finance Code. This chapter defines key terms such as "commercial sales-based financing," "provider," "recipient," and "finance charge," and clarifies that these transactions are not considered account purchase transactions under existing law. The bill mandates comprehensive disclosure requirements for financing offers under $1 million, requiring providers to detail the total financing amount, disbursement amount, finance charges, repayment amounts, and any additional fees, with the recipient's signature needed before finalizing the transaction. It also establishes a registration process for providers and brokers with the Office of Consumer Credit Commissioner, including registration fees and civil penalties for non-compliance.

Additionally, the bill specifies that any commercial sales-based financing contract with a confession of judgment provision is void and unenforceable. It prohibits automatic debits from a recipient's deposit account unless a validly perfected security interest exists. Violations can incur a civil penalty of $10,000 per violation, and the bill clarifies that it does not create a private right of action for individuals. Existing brokers and providers are required to register by December 31, 2026, and the act will take effect on September 1, 2025.

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