S 347 — Commercial Financing Disclosure

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 U.ø¶Ê¿¬3×sM¾.¯î–iæÏôËWÂDocument ”8è_2ýáÙg©’ŸòC”Їp-‘J|ENà,has éïŠÿó!£?q˜>ŒÓe‘¥¸ÿòއ°D~’ãéô{¾òt?ùQÁ`äò‡¿Õí6Ëø勚®ø§ü<ýœHäA6ÝĖKï؃ô1]ø˒à¬|àß*ºªZÑ,épï•÷³±ÊXβ{öêÇët]Ì¥±ÄK_ú‰-Yæ'’›çl1K‰@!Ȉžî»¢šû5IMº<“°z×øÇ<Æ !ë9Ǖ®sIÓ­ßçóÅæóƽùõZºz7}ÿñ÷æêý»ßçö‹Õ@¥óFq’|“é<Ž¶»^!´H³üoéi&yþ}œÿ†G\DÒÄB—ÒÛñkø æµ«çHé|þ}é|ñ_‘T„뀅R¼”Š9²Å¤t)MÙ,[ûÙ£¤h¶þ&$íÇñ:Ëbeen SÉ£„Yˆ)yØú8],â¢`4reformatted !ÕòJoýYšñÞ°,`òšÒÕ2\çEv¯î»rpž¡M×ä¿/«to Ža@¦ð —¼¿^œIš¯3ö›žêSfé³WÎÏW×7ï?þEz?•ÞN~ºº~?ëÉ“»uýÅü,üY^þí@ ‘"ö5œjJž¾GÑõ-7‰‰«n±-uÏ-î©&¥ê×üù–çCîJߺ"K©†„õemeet Ïÿу1Ø¡ÿ¦3Bâá%è¸%—%åA¯øç‡ñï_S¤S¡½Vþ“–ëŌe_ú¸]Y|7o±X–í}R êQåá2†q}¸¤öÐ3²>\Îýå/-Š›ÕâJåœWorld ió>ábì¾i¯§Fž@ÆüPŠâ,/¤ês+Å'‹?ônž?®X†äÑ'sœ#°x|óªÈÖ`ivIy揁E¡á„¾aWide ϧe¸¥ØðãšGÙ²d]™¶JÍ_Web «xósõ”specifications.) ‡¬t»þMˆq$/ó”e:Œ}ÂÏs¶¬˜Aæ¿ÿk#»QÏG3“?þð5ÌÆïã%ÆG1xô¡T¤‡ºî³öÀ_|ÁEeEŠ®1Í1uSW~_p¿ûÃÃá?Æp©)°EYšÁP<)†¥Ô…‘™,´dKÕtm  ©;P×îõ,~”vçT"¿g¹Eq¼˜ð+Ë/øøØ,{Úã·Bý&Cµ?N>^SPF±Ú  â6itõöíI³Q¨éÏmì[è¶j¶oøQÈd=Rõ^èòvoxÈÊ>iøžŸ“¯W4ËùÛxÉÞñX1’îfA!Ú­î®IÅQT•âx0Ÿ  [|  üSÊf«»_|r܋ð!E¶ù-ÜÛ­²  TŽ/ŠtÑü,b¯ê×9Â¥¥ò¯Qš­¯wë¢3AšÐ**¥ˆßį/ÓÉ2\¢©øŠšÁO¡.!‚ìC\‚fÖɂj´ó׍A¦¦aWÕEº¤kª¢Õ—>Ð%Ù´&ªRßå±È_'EçfE¿\ù™…%©[¦®ºŽ#®ÉWÐUu¤Êºç÷¯dળ4ó€-V¸€ñˆ)ëi›Yš~"˜ßu|  -ýfˆðS·˜Û9Ë  `ñ°jÒª&˜ºÎ/OÌÆhw¡;®¥M¦î³Qßܚ  kd©º"Oº³aA  ÷&eôùŒÙ8âbill L×s4cÜc'\yǙxӀ7ÕFºþ²0×±UÕê@×dyl)Îw0  Í6l£è@žNÔÉDñ¾ƒèÍó&\ßuàŽî©_TO êXÓM­;AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "COMMERCIAL FINANCING DISCLOSURE ACT" BY ADDING CHAPTER 81 TO TITLE 39 SO AS TO PROVIDE DEFINITIONS, TO PROVIDE TO WHICH COMMERCIAL FINANCING TRANSACTIONS THE PROVISIONS APPLY, TO PROVIDE FOR WRITTEN DISCLOSURES, TO PROVIDE FOR PROHIBITIONS, AND TO PROVIDE FOR ENFORCEMENT.

͚Êú¶Ô7· Ø2F…dMw  Be it enacted by the General Assembly of the State of South Carolina:

  SECTION 1.  This act may be cited as the "Commercial Financing Disclosure Act."   SECTION 2.  Title 39 of the S.C.

Code is amended by adding:

  CHAPTER 81   Commercial Financing Disclosure       Section 39-81-10.  As used in this chapter:

       (1) "Accounts receivable purchase transaction" means a transaction in which a business forwards or sells to a person all or a portion of the business's cash receipts, accounts, or payment intangibles at a discount to the expected value of the cash receipts, accounts, or payment intangibles.

As used in this item, the terms "accounts" and "payment intangibles" have the same meanings as provided in Section 36-9-102.

The provider's characterization of an accounts receivable purchase transaction as a purchase is conclusive that the accounts receivable purchase transaction is not a loan or a transaction for the use, forbearance, or detention of money.

       (2) "Advance fee" means any consideration that is assessed or collected by a broker before the closing of a commercial financing transaction.

       (3) "Broker" means a person who, for compensation or the expectation of compensation, arranges a commercial financing transaction or an offer between a third party and a business in this State which would, if executed, be binding upon that third party.

The term excludes a provider and any individual or entity whose compensation is not based or dependent upon the terms of the specific commercial financing transaction obtained or offered.

       (4) "Business" means an individual or a group of individuals, a sole proprietorship, a corporation, a limited liability company, a trust, an estate, a cooperative, an association, or a limited or general partnership engaged in a business activity.

       (5) "Commercial financing facility" means a provider's plan for purchasing multiple accounts receivable from the recipient over a period of time pursuant to an agreement that sets forth the terms and conditions governing the use of the facility.

       (6) "Commercial financing transaction" means a commercial loan, an accounts receivable purchase transaction, or a commercial open-end credit plan to the extent the transaction is also a business purpose transaction.

As used in this item, the term "business purpose transaction" means a transaction the proceeds of which are provided to a business or are intended to be used to carry on a business and not to be used for personal, family, or household purposes.

For purposes of determining whether a transaction is a business purpose transaction, the provider may rely on any written statement of intended purpose signed by the business.

The statement may be a separate statement or may be contained in an application, agreement, or other document signed by the business or the business owner.

       (7) "Commercial loan" means a loan to a business, whether secured or unsecured.

       (8) "Commercial open-end credit plan" means commercial financing extended by any provider under a plan in which:

           (a) the provider reasonably contemplates repeat transactions;

and            (b) the amount of financing that may be extended to the business during the term of the plan, up to any limit set by the provider, is generally made available to the extent that any outstanding balance is repaid.

       (9) "Depository institution" means a state or national bank, bank holding company, trust company, savings and loan association, savings and loan association holding company, credit union, or wholly owned subsidiary thereof.

       (10) "Provider" means a person who consummates more than five commercial financing transactions with a business located in this State in any calendar year.

The term also includes a person who enters into a written agreement with a depository institution to arrange a commercial financing transaction between the depository institution and a business via an online lending platform administered by the person.

The fact that a provider extends a specific offer for a commercial financing transaction on behalf of a depository institution may not be construed to mean that the provider engaged in lending or financing or originated that loan or financing.

      Section 39-81-20.  This chapter applies to any commercial financing transaction consummated after December 31, 2025.

This chapter does not apply to:

       (1) a provider that is:

           (a) a federally insured depository institution or an affiliate or holding company of such institution;

or            (b) a subsidiary or service corporation that is owned and controlled by a federally insured depository institution or under common ownership with such institution;

       (2) a provider that is a lender regulated under the Farm Credit Act of 1971, 12 U.S.C.

ss.

2001, et seq.;

       (3) a commercial financing transaction that is:

           (a) secured by real property;

           (b) a lease;

or            (c) a purchase money obligation that is incurred as all or part of the price of the collateral or for value given to enable the business to acquire rights in or the use of the collateral if the value is in fact so used;

       (4) a commercial financing transaction in which the recipient is a motor vehicle dealer, as defined in Section 56-15-10, or an affiliate of such a dealer, or a vehicle rental company or an affiliate of such a company, pursuant to a commercial loan or commercial open-end credit plan of at least fifty thousand dollars or a commercial financing transaction offered by a person in connection with the sale or lease of products or services that such person manufactures, licenses, or distributes, or whose parent company or any of its directly or indirectly owned and controlled subsidiaries manufactures, licenses, or distributes;