Bill > SB0260

This bill creates the Small Business Financing Transparency Act, which establishes a comprehensive regulatory framework for commercial financing providers in Illinois. The bill requires providers of commercial financing (such as sales-based financing, closed-end financing, and factoring transactions) to register with the Department of Financial and Professional Regulation and provide detailed, standardized disclosures to recipients about financing offers. Providers must disclose key information including the total financing amount, finance charges, estimated annual percentage rate, total repayment amount, payment terms, and potential additional fees. The bill establishes a commercial financing database where providers must report transaction details, with strict confidentiality protections for recipient information. Providers must pay a $2,500 annual registration fee and can face significant penalties for non-compliance, including civil monetary penalties up to $10,000 per offense. The law applies to most commercial financing providers but exempts certain entities like banks, credit unions, and transactions under specific thresholds. The registration and disclosure requirements will begin no earlier than January 1, 2026, giving businesses time to prepare for the new regulations. The bill aims to increase transparency and protect small businesses by providing clear, comprehensive information about commercial financing offers.

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=260&GAID=18&DocTypeID=SB&SessionID=114&GA=104