A bill introduced last week in the Texas Senate aims to limit the amount that sales-based financing transactions can charge to 18% APR. This is a very important bill to watch as it would have a major impact on business done in Texas if it passes through to become law. But there is a long way to go. The legislature session goes until May. There will be public debate about it in the coming weeks.
Senate Bill 2677 was introduced by GOP Sen Charles Perry. It is backed by billionaires and a major trade association called the AFA. The bill removes an exemption from usury law that SBF transactions had, allowing them to charge the factor rates they currently do.
The bill has other disclosures that have become typical of recently passed commercial financing laws as well as a requirement for brokers to register with the state and penalties ranging up to $10k for violations or $100k for a series of violations.
If you want to know more about the ongoing status of this bill you should stay in touch with the Revenue Based Finance Coalition for more information but we will keep you updated as well.
