Bill > HB470

This bill establishes a legal framework for revenue-based financing transactions in Louisiana, defining such transactions as agreements where a commercial enterprise sells a percentage of its sales, revenue, or income with payment obligations that fluctuate based on business performance. The bill clarifies that these transactions are not considered traditional loans or interest-bearing agreements, and mandates specific written disclosures to protect businesses engaging in such financing. The required disclosures must include detailed information such as the total funds provided, the actual amount disbursed after any fees or deductions, the total amount to be repaid, the total dollar cost of the transaction, payment terms and methodology (including potential variations), and any prepayment conditions or associated costs. By creating this statutory definition and disclosure requirements, the bill aims to provide transparency and legal clarity for a relatively new form of business financing that differs from conventional loans, helping businesses understand the exact financial terms and obligations of revenue-based financing agreements.

Business and Industry

https://www.legis.la.gov/legis/BillInfo.aspx?s=25rs&b=HB470&sbi=y