[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3244 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 3244
To require certain entities to clearly disclose to small business
concerns key information about factoring facility agreements prior to
entering such agreements with such concerns, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 7, 2025
Mr. Lucas introduced the following bill; which was referred to the
Committee on Small Business
_______________________________________________________________________
A BILL
To require certain entities to clearly disclose to small business
concerns key information about factoring facility agreements prior to
entering such agreements with such concerns, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Capital Access for Small Businesses
Harmonization Act'' or the ``CASH Act''.
SEC. 2. DISCLOSURES FOR SMALL BUSINESSES THAT ENTER INTO FACTORING
FACILITY AGREEMENTS.
(a) In General.--Prior to entering into a factoring facility
agreement with a small business concern, the provider for such
agreement shall provide to such small business concern a written
disclosure of the terms of factoring transactions under such agreement
if--
(1) the aggregate dollar amount of factoring transactions
authorized under such agreement, including any fees and other
charges, is less than $500,000; or
(2) such agreement does not specify the aggregate dollar
amount of factoring transactions authorized under such
agreement, such provider and the small business concern
reasonably believe that the aggregate dollar amount of
factoring transactions under such agreement, including any fees
and other charges, will be less than $500,000.
(b) Disclosure Contents.--Each disclosure required under subsection
(a) with respect to a factoring facility agreement shall include the
following:
(1) The amount or percentage, as applicable, of the
difference between the face value of a claim for payment sold
in a factoring transaction and the amount the provider will pay
to small business concern for such claim under such factoring
facility agreement.
(2) A list of any fees that may be charged under such
factoring facility agreement.
(3) The amount and terms of any reserve under such
factoring facility agreement.
(4) The duration of such factoring facility agreement.
(5) An example of a factoring transaction under such
factoring facility agreement for a claim for payment sold in a
factoring transaction with a face value of $10,000 that
demonstrates--
(A) the amount or percentage described in paragraph
(1);
(B) any fees that apply with respect to factoring
transactions under such factoring facility agreement;
(C) the maximum amount of the reserve for such
factoring transactions under such factoring facility
agreement; and
(D) the net amount the provider pays to the small
business concern for such claim in such factoring
transaction.
(c) Rule of Construction.--Nothing in this section shall be
construed to require a provider to provide to a small business concern
the disclosure required under subsection (a) with respect to the
modification of a factoring facility agreement.
SEC. 3. FEDERAL PREEMPTION.
No State or political subdivision of a State may impose a
requirement that is in addition to, or inconsistent with, the
requirements of this Act with respect to requiring providers to make
disclosures to small business concerns regarding the terms of factoring
transactions under a factoring facility agreement.
SEC. 4. DEFINITIONS.
In this Act:
(1) Factoring transaction.--The term ``factoring
transaction'' means an agreement for the sale of accounts
receivable of a small business concern for goods the small
business concern has supplied, or services the small business
concern has rendered, but for which payment has not yet been
made and for which the primary source of repayment to the
provider is payment by the account debtor on the account
receivable being purchased. For purposes of this Act, the
parties' characterization of a transaction as a purchase and
sale of accounts receivable shall be conclusive that the
transaction is a true sale and considered a factoring
transaction. The term factoring transaction excludes a loan or
an advance of money to a small business that is to be repaid by
the small business from the proceeds of future accounts
receivable which are not in existence when the loan or advance
is made.
(2) Factoring facility agreement.--The term ``factoring
facility agreement'' means an agreement between a provider and
another entity that establishes the terms of factoring
transactions between such provider and another entity.
(3) Provider.--The term ``provider'' means an individual or
entity that--
(A) is a purchaser in a factoring transaction; and
(B) is engaged in interstate commerce.
(4) Reserve.--The term ``reserve'' means the portion of any
payment under a factoring transaction that the provider may
withhold from the small business concern with respect to claims
for payment sold under such factoring transaction, or any
portion of such claims, until such claims, or the portion
thereof, are paid.
(5) Small business concern.--The term ``small business
concern'' has the meaning given such term under section 3 of
the Small Business Act (15 U.S.C. 632).
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