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1
An act relating to commercial financing product 2
brokers and providers; creating part XIII of ch. 559, 3
F.S., entitled "Florida Commercial Financing 4
Disclosure Law"; creating s. 559.961, F.S.; providing 5
a short title; creating s. 559.9611, F.S.; defining 6
terms; creating s. 559.9612, F.S.; providing 7
applicability; creating s. 559.9613, F.S.; requiring 8
providers that consummate commercial financing 9
transactions to provide specified written disclosures; 10
authorizing providers to provide specified required 11
disclosures when consummating a commercial financing 12
facility which are based on an example of a 13
transaction; specifying that disclosures are not 14
required under certain circumstances; creating s. 15
559.9614, F.S.; prohibiting brokers from taking 16
specified actions; creating s. 559.9615, F.S.; 17
providing exclusive authority of the Attorney General 18
to enforce specified provisions; providing civil 19
penalties; providing construction; providing an 20
effective date. 21
22
Be It Enacted by the Legislature of the State of Florida: 23
24
Section 1. Part XIII of chapter 559, Florida Statutes, 25
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consisting of sections 559.961, 559.9611, 559.9612, 559.9613, 26
559.9614, and 559.9615, Florida Statutes, is created to read: 27
PART XIII 28
FLORIDA COMMERCIAL FINANCING DISCLOSURE LAW 29
559.961 Short title. —This part may be cited as the 30
"Florida Commercial Financing Disclosure Law." 31
559.9611 Definitions. —As used in this part, the term: 32
(1) "Accounts receivable purchase transaction" means a 33
transaction in which a business forwards or otherwise sells to a 34
person all or a portion of the business's accounts or payment 35
intangibles as those terms are defined in s. 679.1021(1) at a 36
discount to the expected value of the account or payment 37
intangibles. For purposes of this part, the provider's 38
characterization of an accounts receivable purchase transaction 39
as a purchase is conclusive that the accounts receivable 40
purchase transaction is not a loan or a transaction for the use, 41
forbearance, or detention of money. 42
(2) "Advance fee" means any consideration that is assessed 43
or collected by a broker before the closing of a commercial 44
financing transaction. 45
(3) "Broker" means a person who, for compensation or the 46
expectation of compensation, arranges a commercial financing 47
transaction or an offer between a third party and a business in 48
this state which would, if executed, be binding upon that third 49
party. The term excludes a provider and any individual or e ntity 50
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whose compensation is not based or dependent upon the terms of 51
the specific commercial financing transaction obtained or 52
offered. 53
(4) "Business" means an individual or a group of 54
individuals, a sole proprietorship, a corporation, a limited 55
liability company, a trust, an estate, a cooperative, an 56
association, or a limited or general partnership engaged in a 57
business activity. 58
(5) "Commercial financing facility" means a provider's 59
plan for purchasing multiple accounts receivable from the 60
recipient over a period of time pursuant to an agreement that 61
sets forth the terms and conditions governing the use of the 62
facility. 63
(6) "Commercial financing transaction" means a commercial 64
loan, an accounts receivable purchase transaction, or a 65
commercial open-end credit plan to the extent the transaction is 66
also a business purpose transaction. As used in this subsection, 67
the term "business purpose transaction" means a transaction the 68
proceeds of which are provided to a business or are intended to 69
be used to carry on a business and not to be used for personal, 70
family, or household purposes. For purposes of determining 71
whether a transaction is a business purpose transaction, the 72
provider may rely on any written statement of intended purpose 73
signed by the business. T he statement may be a separate 74
statement or may be contained in an application, agreement, or 75
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other document signed by the business or the business owner. 76
(7) "Commercial loan" means a loan to a business, whether 77
secured or unsecured. 78
(8) "Commercial open-end credit plan" means commercial 79
financing extended by any provider under a plan in which: 80
(a) The provider reasonably contemplates repeat 81
transactions. 82
(b) The amount of financing that may be extended to the 83
business during the term of the plan, up to any limit set by the 84
provider, is generally made available to the extent that any 85
outstanding balance is repaid. 86
(9) "Depository institution" means a Florida state -87
chartered bank, savings bank, credit union, or trust company, or 88
a federal savings or thrift association, bank, credit union, 89
savings bank, or thrift. 90
(10) "Provider" means a person who consummates more than 91
five commercial financing transactions with a business located 92
in this state in any calendar year. The term also includes a 93
person who enters into a written agreement with a depository 94
institution to arrange a commercial financing transaction 95
between the depository institution and a business via an online 96
lending platform administered by the pers on. The fact that a 97
provider extends a specific offer for a commercial financing 98
transaction on behalf of a depository institution may not be 99
construed to mean that the provider engaged in lending or 100
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financing or originated that loan or financing. 101
559.9612 Scope of this part. —This part applies to any 102
commercial financing transaction consummated on or after January 103
1, 2024. This part does not apply to: 104
(1) A provider that is: 105
(a) A federally insured depository institution or an 106
affiliate or holding com pany of such institution; or 107
(b) A subsidiary or service corporation that is owned and 108
controlled by a federally insured depository institution or 109
under common ownership with such institution. 110
(2) A provider that is a lender regulated under the Farm 111
Credit Act of 1971, 12 U.S.C. ss. 2001 et seq. 112
(3) A commercial financing transaction that is: 113
(a) Secured by real property; 114
(b) A lease; or 115
(c) A purchase money obligation that is incurred as all or 116
part of the price of the collateral or for value g iven to enable 117
the business to acquire rights in or the use of the collateral 118
if the value is in fact so used. 119
(4) A commercial financing transaction in which the 120
recipient is a motor vehicle dealer or an affiliate of such a 121
dealer, or a vehicle rental c ompany or an affiliate of such a 122
company, pursuant to a commercial loan or commercial open -end 123
credit plan of at least $50,000 or a commercial financing 124
transaction offered by a person in connection with the sale or 125
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lease of products or services that such person manufactures, 126
licenses, or distributes, or whose parent company or any of its 127
directly or indirectly owned and controlled subsidiaries 128
manufactures, licenses, or distributes. 129
(5) A provider that is licensed as a money transmitter 130
under chapter 560 or licensed as a money transmitter by any 131
other state, district, territory, or commonwealth of the United 132
States. 133
(6) A provider that consummates no more than five 134
commercial financing transactions in this state in a 12 -month 135
period. 136
(7) A commercial financing transaction of more than 137
$500,000. 138
559.9613 Disclosures. — 139
(1) A provider that consummates a commercial financing 140
transaction shall provide a written disclosure of the terms of 141
the commercial financing transaction as required by subsection 142
(2). The disclosure must be provided at or before consummation 143
of the transaction. Only one disclosure must be provided for 144
each commercial financing transaction, and a disclosure is not 145
required as result of a modification, forbearance, or change to 146
a consummated commercial financing transaction. 147
(2) A provider shall provide a written disclosure of the 148
following information in connection with each commercial 149
financing transaction: 150
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(a) The total amount of funds provided to the business 151
under the terms of t he agreement. 152
(b) The total amount of funds disbursed to the business if 153
less than the amount specified in paragraph (a) as a result of 154
any fees deducted or withheld at disbursement, any amount paid 155
to the provider to satisfy a prior balance, and any amo unt paid 156
to a third party on behalf of the business. 157
(c) The total amount to be paid to the provider under the 158
terms of the agreement. 159
(d) The total dollar cost under the terms of the 160
agreement, calculated by finding the difference between the 161
amount specified in paragraph (a) and the amount specified in 162
paragraph (c). 163
(e)1. The manner, frequency, and amount of each payment; 164
or 165
2. If the amount of the payments may vary, the manner and 166
frequency of the payments, the estimated amount of the initial 167
payment, a description of the methodology for calculating any 168
variable payment, and the circumstances under which payments may 169
vary. 170
(f) Whether there are any costs or discounts associated 171
with prepayment, including a reference to the provision in the 172
agreement which creates the contractual rights of the parties 173
related to prepayment. 174
(3) A provider that consummates a commercial financing 175
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facility may provide disclosures required by subsection (2) 176
which are based on an example of a transaction that coul d occur 177
under the agreement. The example must be based on an account 178
receivable total face amount owed of $10,000. Only one 179
disclosure is required for each commercial financing facility, 180
and a disclosure is not required as result of a modification, 181
forbearance, or change to the facility. A new disclosure is not 182
required each time accounts receivable are purchased under the 183
facility. 184
559.9614 Prohibited acts. —A broker may not do any of the 185
following: 186
(1) Assess, collect, or solicit an advance fee from a 187
business to provide services as a broker. However, this 188
subsection does not preclude a broker from soliciting a business 189
to pay for, or preclude a business from paying for, actual 190
services necessary to apply for a commercial financing 191
transaction, includin g, but not limited to, a credit check or an 192
appraisal of security, if such payment is made by check or money 193
order payable to a party independent of the broker. 194
(2) Make or use any false or misleading representation or 195
omit any material fact in the offer or sale of the services of a 196
broker or engage, directly or indirectly, in any act that 197
operates or would operate as fraud or deception upon any person 198
in connection with the offer or sale of the services of a 199
broker, notwithstanding the absence of relianc e by the business. 200
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(3) Make or use any false or deceptive representation in 201
its business dealings. 202
(4) Offer the services of a broker in any advertisement 203
without disclosing the actual address and telephone number of 204
the business of the broker and the address and telephone number 205
of any forwarding service the broker may use, if any. 206
559.9615 Enforcement. — 207
(1) The Attorney General has exclusive authority to 208
enforce this part. The Attorney General may: 209
(a) Receive and act on complaints. 210
(b) Take action designed to obtain voluntary compliance 211
with this part. 212
(c) Commence administrative or judicial proceedings to 213
enforce compliance with this part. 214
(2)(a) A violation of this part is punishable by a fine of 215
$500 per incident, not to exceed $20,000 for all aggregated 216
violations, arising from the use of the transaction 217
documentation or materials found to be in violation of this 218
part. 219
(b) A violation of this part after receipt of a written 220
notice of a prior violation from the Attorney General is 221
punishable by a fine of $1,000 per incident, not to exceed 222
$50,000 for all aggregated violations, arising from the use of 223
the transaction documentation or materials found to be in 224
violation of this part. 225
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(c) A violation of this part does not affect the 226
enforceability or validity of the underlying commercial 227
financing transaction. 228
(3) This part does not create a private right of action 229
against any person or entity based upon compliance or 230
noncompliance with this part. 231
Section 2. This act shall take effec t July 1, 2023. 232