Bill > SB754

This bill establishes the Commercial Financing - Small Business Truth in Lending Act, which creates comprehensive disclosure requirements for various types of commercial financing transactions in Maryland. The bill defines several types of commercial financing, including sales-based financing, closed-end financing, open-end financing, and factoring transactions, and mandates that providers disclose key financial details to recipients before finalizing a financing offer. These disclosures must include the total financing amount, disbursement amount, finance charge, annual percentage rate (APR), total repayment amount, payment terms, and potential additional fees. Providers must calculate APRs using specific methods, such as using historical sales volumes or an opt-in method for sales-based financing. The bill exempts certain types of financial institutions and transactions, such as those involving banks, credit unions, transactions over $2.5 million, and transactions secured by real property. Providers who violate the disclosure requirements may face civil penalties up to $2,000 per violation or $10,000 for willful violations, and the Commissioner of Financial Regulation is authorized to investigate complaints and impose additional relief. The law is set to take effect on October 1, 2025, and is modeled substantially after similar regulations in New York State.

Budget and Finance, Business and Industry

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/SB0754?ys=2025RS